When it’s time for a new set of wheels, your instinct may be to head to a dealership. Trading in your car is simple and usually fairly straightforward, and you can use the money as a down payment for a new vehicle. But convenience comes at a price, since the dealer is only going to offer you the wholesale value for your car. To get the most money out of your used car, you’ll want to sell it yourself.
Selling a car on your own isn’t terribly complicated, but it does require more work than a traditional trade-in. You’ll need to advertise the car for sale, communicate with potential buyers, set up test drives, and handle the paperwork. You also need to determine whether a private sale makes sense financially. If you live somewhere where sales tax is charged, you won’t pay tax on the value of your trade-in when you buy through a dealer. If the sales tax in your area is 7% and your car has a trade-in value of $10,000, you’ll save $700 on sales tax. If you sell it on your own, you’ll want to get more than $10,700 to make up for the sales tax savings you’ll lose out on.
Given the steps involved with selling a car, it’s all too easy for novice sellers to make a mistake that either makes it hard to find a buyer or results in a lower-than-expected selling price. From pricing errors to falling for scams, here are five of the biggest mistakes you can make when trying to sell your car.
1. Pricing it wrong
Pricing your used car is a tricky task. Go too high, and you could find it difficult to attract buyers. Go too low, and you’ll cheat yourself financially. You can start by checking the value for your vehicle on Kelley Blue Book and Edmunds. When researching value, make sure you have a realistic sense of your car’s condition, Car Talk advised. You might think your used Honda Civic is in excellent shape, but there’s a good chance there are some issues you’re overlooking.
Once you have an idea of your car’s book value, you need to figure out what similar vehicles are actually selling for. Depending on demand in your area, you may be able to sell a car for more than the blue book estimate; in some cases, the value will actually be lower. Certain extras, like an unexpired warranty or desirable upgrades, could also boost your car’s selling price. (More personal modifications can hurt your car’s value; many buyers won’t want huge speakers or a noisy aftermarket exhaust system.) Your asking price should include a little room for negotiation, and also reflect how quickly you want to get rid of the vehicle. If you need to sell your car right away, you may need to accept a lower price.
2. Not getting the ad right
Before you can sell your car, you need to advertise it. Bungling this part of the process could mean you’ll have trouble finding interested buyers. Start by choosing where to list your car. A free ad on Craigslist is economical, but paid ads on sites like AutoTrader.com and Cars.com may get in front of more people.
When creating your ad, detail is key. Not only does providing a lot of information enhance your credibility, it also saves you and buyers time, since people can quickly tell if a car isn’t right for them. Among the must-haves to include in your ad are the make, model, and body type; VIN number; warranty information; gas mileage; modifications; and, of course, the asking price. You should also explain why you’re selling the car, any maintenance issues, and your negotiating terms (firm, best offer, etc.) Finally, take lots of pictures. Ads with photos get double the response of those that don’t have pictures, according to Kelley Blue Book. Images should be in-focus and show detail.
3. Not cleaning it
Presentation is everything. You can increase your chances of making a sale (or getting the price you want) if you take the time to make your vehicle look spic-and-span. Ideally, you’ve been detailing your car regularly since you first brought it home. A well-maintained exterior and interior makes it easier to sell the car for top dollar. But even if you’ve been lax with the upkeep, you’ll still want to thoroughly clean your car – and we don’t just mean a trip through the automatic car wash.
Now might be the time to spring for professional detailing, especially if you’re trying to sell a higher-end vehicle. But if you can’t afford that, a DIY job will do. In addition to washing the outside of your car, clean the inside and outside of your vehicle’s windows, vacuum and spot clean the upholstery, and get rid of all your junk. And if you tend to make a lot of trips through the drive-thru or have a dog, make sure to do something about any lingering odors, which are sure to turn off buyers.
4. Not having maintenance records
Now is the time to pull out your carefully organized file of car maintenance records. (You do have that, right?) Understandably, buyers want to know what kind of work has been done on the car and when. If you can’t produce service records, expect some people to either walk away or try to haggle you down on price. A recent maintenance inspection can also put a buyer’s mind at ease.
“When it comes to re-selling any vehicle that requires an expensive major service, any expensive major service, simply getting the service isn’t enough,” Jalopnik’s Dough DeMuro wrote. “If you ever plan to re-sell the vehicle, possessing the records that prove you got the service is almost as important as actually having the service done at all.”
5. Falling for a scam
Usually, it’s buyers who are worried about falling for a used car scam, but sellers also need to be cautious. Buyers may try to pass bad checks. Or they might try a more elaborate scam, such as giving you a cashier’s check for more than the agreed-upon selling price. Then, they’ll ask you to wire them the difference after the sale is complete. But the check is fake, and once your bank figures it out, you’re the one left holding the bag. Buyers may also try to use fake escrow services or suggest a payment plan they have no intention of honoring.
When selling your car, take a few basic steps to protect yourself. Don’t sign over a car’s title until the payment clears or you have cash in hand. If a buyer wants to pay with a check, you can complete the transaction at his bank so you know the funds are available. Conduct test drives in public areas and don’t leave the would-be buyer alone with the car. When handing over maintenance records and other paperwork, block out personal information to prevent identity theft. Also, make sure you complete a release of liability form so you won’t be on the hook for future tickets. As always, trust your instincts when selling your used car – if something sounds suspicious, it probably is.