Buying a car is almost inevitable in America today. Sure some city slickers can get by with public transportation, but for the majority that isn’t the case. If you are buying a car, then that means someone is selling a car. This week, we filled the shoes of the seller as we looked to send our 15 year old sedan out to pasture (or maybe it was to the slaughterhouse).
Trade, Private Sale, Donate, or Scrap
There are four common ways folks “sell” their used cars.
The first is to trade it in to a dealership for either cash or collateral towards a new purchase. The pros of trading a car is that it is fast, dealerships are ‘safe’ in the meaning that you won’t be literally robbed, and it requires the least amount of leg work. The con of trading a car is that you as the seller pay for the convenience. You will not get as much money because the dealer wants to make a profit on the trade.
Dealerships will take that trade in and either list it on their lot or sell it at auction (especially if it is a make and model that they do not specialize in).
Another route that some people choose (one of my brothers included) is to donate their used car. Often times, donated cars are past their prime and have little value left in them. Depending on the organization that it is donated to, you may be able to write off some of the value of the car from your taxes. If you have a charity budget, you might be able to lump it into your charitable giving and ‘convert’ it into cash value that way.
This option is for cars that are dead. They do not run or cost too much to get into running order. Junkyards may be willing to pay a few hundred bucks to be able to pick over the carcass of this once majestic beast. End of the line, if you are scrapping a car, it has hit rock bottom.
Finally, there is the private sale. In a private sale, you the owner act as your own 1 man or 1 woman dealership. You advertise the vehicle, find a buyer, take care of paperwork, and hopefully make a sale! The pro of a private sale is that you will likely make more money. The cons include more work, some degree of risk, and a longer time table.
We knew pretty early on that we wanted to do a private sale.
Step #1 – Do Your Homework
Before you list a car for sale, you need to know a couple of things.
- Where is the title? Who is listed on the title? Are there any liens on the title?
- What condition is the car in?
- What is the car worth? What are similar cars going for in the area?
#1 was easy for us. The title was in our safety deposit box, and we were the sole owners of the car.
#2 we knew that the car was in rough but working condition. The whole point of deciding to sell the car was because we were tired of sinking money into repairs.
#3 The fastest way to get a starting number for this is to go to Kelly Blue Book. This also highlighted the discrepancy between trading and private sale.
A “Fair” condition trade in vs “Fair” condition private sale
and here is the “good” condition trade in vs “good” private
There is almost a $1000 difference between trading in and selling it yourself for this particular car!
Step #2 – Clean!
Americans live in their cars. Long commutes, constant errands around town, and a deluge of pet hair, kids snacks, and shoe debris build up a strata of crud over the ownership of a car. New owners want a new car smell, not mashed cheerio paste. We started by emptying out the car of all our personal belongings and giving it a thorough cleaning. Start on the inside and wipe down all of the glass, vacuum out all of the crevices, and remove all of those old window decals. Once the inside it properly clean, take it to a car wash and get the fanciest wash possible. A super duper unicorn tear wash set us back only $12 but made the car really spiffy and shiny. Immediately after the car wash, stop and take pictures of those shiny wheels. Here is our advertisement picture showing off the tire tread of the wheel. The picture was taken 20 feet from the car wash. That leads us into step 3.
Step #3 – Lights, Camera, Action
Now that the car is at its cleanest, it is time to take pictures. Find a picturesque location (not your driveway) and take some glamour photos. Follow good photographer rules of thumb. Shoot with the sun behind you, frame the car nicely, and use plenty of natural light.
Now that’s a car that stands out!
Include lots of photos. If you aren’t sure what should be photographed, take a look at a dealership’s website and see what they take photos of. Try and mimic a dealership. Take more photos than you need so you can pick out the best ones later. I ended up posting 19 photos with my ad.
Step #4 – Craft The Ad
Once upon a time, people use to stick a “For Sale” sign in the window of a car along with a phone number and wait. Folks still do that today, but there are better ways of getting the message out. We chose to utilize Craigslist and a similar private classified that is limited to Shae’s workplace (we’ll call it XYZ). The bulk of what people look at on a listing are the pictures and if we did a good job on the previous step, then they may be interested in what the text of the actual ad says. It is here that you should list all of the great features of the car while sneaking in any of the standout issues that it may be having.
Here is our ad text:
Have a young driver heading back to school soon? This sports edition altima is the car for them!
• 142000 miles (below average)
• Leather seats
• Tires have good tread
• Gas sipping commuter (24/31 MPG)
• Aftermarket stereo, plug & play w/ phones
• New front suspension
• Fun to drive!
This car has been well maintained with synthetic oil changes every 6 months for the past 5 years. It has a brand new battery, front suspension, tie rods, wheel hub, and a recent alignment. The AC does not work and the rear brakes are nearing their service date. Front brakes are good and it has plenty of stopping power. Spark plugs have another 40-60k miles to go, tires have another 20k. New air filter, premium wiper blades, and all fluids have been topped off.
• Cruise Control
• Driver & passenger air bags
• Alloy wheels
• All around disk brakes
• Power windows
• Power driver seat
• Power mirrors
• 60/40 fold down back seat (you can fit a lot in this car!)
• Full sized spare
• Very little rust or fading
• Car alarm
• USB port in stereo
• Non smoking
• Clean & ready to roll!
Title is in hand just waiting to be signed over. Cash or cashier’s check. Call, text or email to see it and take it home!
Notice how it is succinct but still gives plenty of information. Prospective buyers will appreciate that you are upfront about problem areas and will likely tunnel vision onto those instead of examining other parts of the car. Color me skeptical when I read listings for 15 year old cars that state it is in perfect running condition. Sure it is buddy, whatever you say.
In general, I find the oreo style of writing to be very easy and effective. Sandwich any negative bits in-between good ones. A prospective buyers attitude will be positive after reading the first good bit and that will help carry them through the negative bit before finally washing that away with a final good bit again.
It is important that you list contact details so prospective buyers can get a hold of you if they are interested. From the time we posted the ad on Monday to when we took it down on Thursday night, we had 11 individuals contact us.
As expected, Craigslist generated more hits than the private classifieds.
The best offer, and the one we accepted, started with an email from one of the XYZ hits. In fact, of the three offers that we ended up receiving, each one originated from an email contact.
Step #5 – Sell the Car
Answer emails, texts, and phone calls from prospective buyers. Arrange to meet them in a safe place such as a mall parking lot so they can see the car in person. Ride along for test drives and be prepared for low ball offers. If you did your homework at the beginning you should have a good idea of how much the car is worth.
After a little negotiating we ended up selling the car for $1800, $36 above KBB value. The new owner will have to put some money into repairs, but they also are saving quite a bit by buying from those “sketchy” folks in the parking lot versus going to a car lot. I looked up the same year, make, and model car at dealerships around us and found one with similar mileage listed for $3800. Sure that could probably be haggled down a bit, but the buyers saved a boatload by doing their own legwork and dealing with us. We earned money by selling instead of trading. Everyone wins! Yay capitalism.
Step #6 – Tie up loose ends
Make sure all paperwork is filled out properly when you exchange keys and money with the buyer. We filled out a simple bill of sale, a notice of sale, and the title. After the sale is done, mail the notice of sale to your secretary of state and notify your insurance company to stop coverage on the car.
We cleaned the car on Sunday, listed it on Monday, and had cash in hand on Thursday night. It is fun to take on new challenges with your spouse and I find that those challenges usually help strengthen a relationship. If we can sell a car, then you can too!