Advertisement
Advertisement

What to Know About Selling Your Car In a Private Transaction

When you decide to sell your car, you have a few options. You can sell your car to a company that offers you cash almost instantaneously. Most people find this is the best option for them because it’s fast and easy.

You can also trade your car in at the dealership if you’re going to buy a new one through that dealer.

The third option is to sell your car in a private party transaction.

Below, we explore everything you should know before you try to sell your car in a private transaction.

Selling a Car Yourself vs. Trading It In

If you’re going to sell your current car, trading it in may be the first thing that comes to your mind. It’s not optimal, but it is easy. When you trade your car in at the dealership, it typically simplifies the process to go ahead and get a new one. You take your old vehicle to the dealer, the dealer makes an offer, and then the money you earn goes toward the purchase of your new car.

You pay the difference or finance it and head home in a new car.

The easiest way isn’t always the best way, however. You can save time finding a buyer or dealing with paperwork, but it’s almost a guarantee you’ll get less money than if you sell it yourself. A dealer has to make a profit from your old car, and they want to maximize that as much as possible.

The upside aside from how easy it is to sell to a dealer is that you may only have to pay taxes on the difference after the trade-in in most states. For example, if you get $15,000 for your trade-in and spend $30,000 on a new car, you pay taxes on the $15,000 difference rather than the entire $30,000.

The money you can save probably won’t be more than what you lose on not selling your car outside the dealership, but it is something to consider.

If you don’t care as much about the money and your primary concern is convenience, you may go through the dealership.

Then, there’s the option to sell it yourself. To get the most money, you might go with this option, but it also requires the most work from you. Used cars are selling for a premium right now due to the global chip shortage, so your used car is probably going to bring in a reasonable price if you sell it on your own as opposed to trading it in.

If you’re going to do a private sale, you can list the car online. For example, there are sites like Autotrader that you can use. Many of these sites will provide a free vehicle history report and other perks.

There’s no guarantee you’re going to get the price you want in a private sale or that you’ll sell your vehicle at all. You also have no timeline as to when it might sell.

For people who want convenience and the best price, the better alternative, as discussed above, is working with a company that buys cars in cash. These companies offer the simplicity of working with a dealership but often pay more for vehicles. You can get the deal done quickly and have cash in your pocket.

If you want to try selling a car on your own before you go to a company, the following are some things you need to know to facilitate it.

Getting Your Car Ready to Sell

When you go through a car buying company, you don’t have to get it ready to sell. The company will take care of things for you.

If you’re selling it on your own, you will have to get it ready to appeal to buyers and encourage them to pay top-dollar.

You should start by assessing the general condition of your vehicle. Take it to an experienced mechanic for an inspection. If there are any particular issues you have, ask the mechanic to take a look and, if necessary fix them.

If you don’t want to pay to fix any problems the mechanic finds, you will have to be upfront with potential buyers and likely accept a lower selling price.

It’s at this point you might consider whether, based on the condition of your vehicle, you would earn more selling it privately or going with a company or dealership.

You should take your car to a dealer to find out a general idea of what it might be worth and do your own research as well.

If the following situations occur, it’s better to cut your losses and trade your car in or go through a car buying company:

  • The mechanic tells you the cost of repairs out-of-pocket would put your net earnings below what you might make on a trade-in.
  • Your car’s fair, private party value without you making the repairs is less than the trade-in value without repairs.
  • If your main goal is selling fast, you probably don’t want to wait on repairs, nor do you want to go through the process of a private sale.
  • If the private party value of your car is pretty similar to the trade-in value, it’s unlikely the process is worth it. A car buying company may give you more than the trade-in value, though, so you do need to check all options.

If you’ve gone through what we talked about above and still want to sell your car privately, do the following:

  • Get a Carfax report. You’ll need that report, and it will show buyers key facts about your vehicle. The Carfax report is something you’ll be able to produce quickly when buyers have questions, so you can hopefully speed things up. It will include the number of previous owners, repair and service history, accident history and odometer readings.
  • Go ahead and proactively get a copy of your title. If you don’t have a copy of the title, you can order one from the motor vehicle registry in your state. If you’re still paying off your car’s loan, if possible, you should pay it off before you list your vehicle. Most buyers prefer to buy a vehicle with a clear title.

Cleaning Your Vehicle

If you’re selling your car to a company, you don’t have to worry about cleaning it or getting it in pristine condition—the company will take care of that.

Otherwise, you’ll need to do a thorough cleaning and consider getting it professionally detailed. Go through every part of your car to ensure there’s no dirt and that you’ve removed your personal items.

You should deep clean your upholstery, and you should also thoroughly clean all the hard surfaces.

Again, professional detailing will include flooring, upholstery, and the exterior.

Once you get your car cleaned up, change the oil, even if it’s not time yet.

Gather Your Records

If you’ve kept your car in good condition during the time you’ve had it, that means you should have records of all the services and maintenance. If you’ve had services and maintenance done but you don’t have the records, your mechanic should be able to give them to you.

When you can provide a possible buyer with proof of how well you’ve taken care of the car, it’s going to help you sell it and likely for a higher price.

Creating a Listing

When you use an online car marketplace or classifieds, they’ll have a space for you to add a gallery of photos. You need to get pictures of the car from a lot of different angles. If there are interior features worth highlighting, zoom in on those for some of the photos.

Determining a Price

At this point, if you’ve done all the steps above, you should be able to use your research to set a reasonable price. You can use something like Kelley Blue Book to figure out what the fair value of your car is.

You’ll need your VIN to come to a final value. You can go up or down from what the valuation platform tells you, but the faster you want to sell, the closer you want to be to that number.

Finally, another hurdle of selling your car privately is that you have to deal with potential buyers on your own, and many of those people will ultimately waste your time.

Be prepared to respond to calls, emails, and texts quickly because people lose interest fast.

You need to be mindful of the potential for scams too. For example, if someone tells you they don’t need to meet in person and they’ll buy the car by wire transfer, it’s highly likely they’re a scammer.

Finally, if you’re able to find a legitimate buyer and you’ve negotiated to come to an agreed-upon price, confirm that payment will come in the form of a cashier’s check, money order or cash. It’s best to refuse a personal check, but if you do accept it, you should hold the car until it clears.

- Advertisment -