5/13/2008

How To: Sell A Used Car: Episode 1


You've decided to take the plunge. You're going to do it. You're going to sell your car outright. No haggling over trade-in value with some slime-ball dealer. It's time to get the real value out of your car. This is the first part of our series on buying and selling used cars. We're starting with selling as we are going to assume that you already have a car, and will need to get rid of it before buying another. Because you are going to buy someone else's used car, right? And pay for it in cash, right? (this is where you nod your head in agreement)


Many financial pundits as well as PF bloggers will tell you that you can save a ton of money (and headache) by buying used cars and selling yours outright. And they are right. Dealers know the value of your car, despite offering you 10-20% less than that. It's called 'retail'. They have to buy your car below value, in hope of reselling it at or close to value. They make their money on the buy, not the sale. There is also a huge hit in value that you avoid when buying used instead of new. This is not a trivial amount of money either - thousands of dollars. Some PF bloggers will post articles on how smart they were for buying new, and how all that crap about 'buying used is smart' is just a myth. They'll talk about what a great deal they got, how much more reliable their new car is, that they bought it below 'dealer invoice' (as if the dealer lost money on the deal), that their loan was at such a good rate and thus qualifies as 'good debt' (as if there is such a thing), and try to weasel their way into showing how none of the good sense of buying used applies to their situation. Give me a break. I've read these posts (too many of them), and they amount to little more than justification for making a deal that they knew was bad to get a car that they wanted, simply to satisfy their inner child. This isn't one of those posts.

There are plenty of posts telling you to buy and sell used, and showing all of the financial justification in favor of this method. This isn't one of those posts either.

This is an 'in the trenches' view of how to make this actually happen. Hopefully you are already aware of the what and why, otherwise you would have stopped reading already.


Research
You have a lot of this to do. Not only do you need to know what your car is worth, but also what they are actually selling for in your area. You also need to get some documentation in order.
  • Do you have the title (is it payed for or do you still owe on it)? If you still owe money on the vehicle, then you will need to discuss your situation with the lien holder and either work out an arrangement for the difference if you are upside down, or release the title if you have an offer equal to or more than the value.
  • Do you have the repair history documented Oil change receipts? Scheduled maintenance log?
  • Do you have the original window sticker? This great for showing exactly what features it does have going for it.
  • Do you have the owner's manual?
  • Get the 'Private Party' value of your vehicle. Kelly Blue Book and Edmunds are great places to do this. Steer clear of NADA (National Auto Dealers Association) as they tend to overvalue cars just a tad, possibly to the dealer's advantage (in our opinion).
  • Does your vehicle have a valid warranty? This is a great selling point, but you'll need to look into transferring that after the sale. It's usually just a matter of a form to fill out and fax back.
  • Pull the Carfax report on your car. It is worth it to get a 30-day subscription if you are planning to buy another used car in the near future. If you don't have this, then it is just another hurdle for the buyer.
Do whatever you can to be upfront and honest about what you are selling. If it has a ding, then it has a ding. If the rubber is getting thin, then it will likely need new tires soon. It is what it is. the more you try to hide, the less comfortable buyers will be.

From a legal standpoint, you need to understand your state's and/or county's requirements for selling a vehicle.
  • Be sure to look up your area's sales tax laws. Do you pay it, or the buyer? How is it calculated? Who do you pay it to?
  • You'll need a bill of sale specific to your state. These are usually free, and well worth the little effort. Sometimes unnecessary, but I'd rather have it than not.
  • Does the odometer mileage need to be verified?
  • How is the title transferred? How long does it take, and how much will it cost?
  • Do you keep the plates or do they stay with the vehicle?
  • Can you stop the insurance after the sale with just a phone call, or will they need documentation? This is very important to do immediately after the sale, by the way. That Bill of Sale may come in quite handy for actually verifying the time and day of the sale in a dispute.
You're state and/or county's web site should have most of this stuff readily available. Some focused googling should yield results. Otherwise, go straight to your state or county website and search there. It helps to be knowledgeable about both buying and selling as your buyers will likely be less informed than you. Assume that they have never done this before, and haven't got a clue. The more questions that you have answers to, the better. Even if you answer is, "I would recommend you contact in the county so-and-so's office."

Posting the ad
You're just itching to post this thing for sale. Wait. Lets get this done right - the first time. First, what is the best method for your area? We've bought and sold vehicles on Craigslist, but in some areas of the country, that forum sees little activity. Round up all the methods you can find. Sign in the window, ebay, local newspaper, local used car publications (Deals on Wheels, Auto trader...), online forums.... Now it's time to take some pictures.
  • Clean your car. Wash AND wax it, thoroughly. No wax left behind, no streaks on the windows. Don't forget the wheels, tires, and wheel wells. Vac out the inside. Attempt to remove any stains on the carpet or upholstery. Dust the dash and clean up any random globs of ketchup or Coka-Cola on the interior. Don't give the buyer a reason to discount your vehicle. Clean out all of the trash. Get all of the crap out of the cupholders. Clean out the trunk. Be sure to get all of the grime off of the steering wheel, shifter and arm rests - there's more on there than you think. You want that same halo-effect that the dealers get when someone looks at a new vehicle.
  • Contain clutter. There are some things that are good to keep in the car - tire pressure gage, jumper cables, rain poncho. Don't feel like you must go without these things, just keep them in a small container. Car registration and proof of insurance should also be kept together (if they aren't already) and ready to go. It will look clean and organized, plus if you sell the car, then you just need to grab it and go. Anything that is staying with the car should also be organized - proof of maintenance log, receipts, warranty info for replaced tires, brakes or mufflers.
  • Pick a nice day and take you car to an open area. Don't photograph it in front of your house. There is too much noise in the background. Not to be paranoid, but it's best to maintain an arms length between you (as well as your family) and whoever is looking at your car. Schools are a good place to do this. Maybe a quiet country road? Give it some visual interest. If you are selling a truck, photograph it out at a farm. Photograph your Jeep Wrangler in an open lot of green grass.
  • You don't need a fancy camera to take some nice pics. Use your resources - if you have a friend or relative who has a flair for photography, then ask them to give you a hand. Otherwise, charge up you point-and-shoot. Ambient light is best so that you don't have one side in shadow. Get down low and take some dramatic shots. Somebody, somewhere, at some-point in time designed the heck out of this thing. Pick some angles that show off the form and features. Photograph it like you have a clue. Get all of the angles, interior too. If you are up-charging for something like chrome wheels, be sure to get some good shots of them. Take lots and lots of pictures. you might end up with a few good ones.
  • Cover up your license plate. Either before with paper or afterwards in photoshop. But don't doctor-up the images. This is not your chance to fix that scratch or ding.
Once you have this done, you are ready to start crafting your ads. Gather up all of your info and start thinking about what you want to say. If you are struggling here, then go ahead and go car shopping on Craigslist. Find some ads that resonate well with you and your target consumer. Like their wording, their way of listing features, the way they bait you to respond and come see the car? Then use it as your guide. Besides the standard email response option, also list a phone number. It's OK to say the area or town you live in, but I wouldn't give out an address until you have a serious buyer.

We started with the free or low cost methods - Craigslist and a couple 'For Sale' signs in the windows. Those signs may seem tacky, but we've had friends find buyers while they were at work or grocery shopping. Where ever you are, park it prominently so that people driving by will see the signs.

After a week of no sale, but some traffic, we stepped up to some some local ads. Our local newspaper had printed ads and online ads. The printed ads allow very little verbiage unless you are willing to shell out big bucks, but yet allow you to reach the non-internet-savvy crowd. The paper's online ads, on the other hand were quite nice. In the end we had several people come to look at the car. And a few test drove it.

Coming up...
Now you should have your clean and beautiful car posted for sale and ready for buyers. In Episode 2, we'll talk about showing the car, and closing the deal.

2 comments:

Anonymous said...

Some experts recommend photographing the flaws, as well. A potential buyer will notice a worn stick shift cover, for example, so it's better to be upfront. Also, use as many photos as the site allows.

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