|Selling a Vehicle Privately
|Selling a vehicle privately can be profitable, but there are some potential pitfalls. Asking yourself the following questions can help you to decide whether to go that route and how to maximize your chances for success:
1) HOW SALEABLE IS MY VEHICLE?- Certain vehicles work well for consumer-to-consumer sales, others don’t. Make and model, mileage, and price range are the important factors to consider in determining the likelihood of a successful sale.
Make and model: In general, the more popular the make and model, the more response you will get. It is a lot easier to sell a Honda privately than it is a Saab.
Mileage: It is much easier to sell a higher mileage vehicle if it is a popular make and model AND in a lower price range. There are many more buyers for an '04 Honda with 80,000 miles than an '08 Honda with 80,000 miles.
Price range: Lower price range vehicles tend to work better in private sales. Financing and warranty issues are less relevant. There is less competition from dealers selling new and late-model used vehicles. There are many more consumers searching newspaper ad's for an '04 Honda for $7500 than for an '08 Honda for $17,500.
Consider how your vehicle’s combination of make, model, mileage, and price range lends itself to a private sale when making your decision to sell privately or not.
2) HOW SHOULD I PREPARE MY VEHICLE? – When trading-in a vehicle, our advice is to spend minimal time and money preparing a vehicle. In a private sale, the opposite tends to be true. The vehicle for sale should be clean in and out, mechanically sound, accessories functional, brakes sound, tires up. The fewer excuses, the better your chances for a successful sale.
3) HOW SHOULD I PRICE MY VEHICLE? – Nothing sabotages private sales more than over-pricing a vehicle. People purchasing a vehicle privately are looking to save money. If you can't save them enough money to offset the level of comfort they would feel when buying a vehicle from a dealer, you are wasting your time. Dealers are in a position to offer warranties, financing, recourse should something go wrong, and a certain level of "good will" if necessary. Private sellers cannot offer these "extras". In general, pricing a vehicle mid-way between our values and dealers' advertised prices for similar vehicles in your area is a good rule-of-thumb.
4) WHAT EXPENSES WILL I INCUR SELLING MY VEHICLE PRIVATELY? – You need to be realistic about the expenses involved in selling a vehicle privately. Advertising in the newspaper can be relatively expensive, both for the initial ad and potential repeat ads. There are some less expensive alternatives available through the Internet and alternative auto publications. Calculate what you will spend making the vehicle attractive and sound. Remember that if you reside in a state with a sales tax (see: How Trading Your Vehicle May Save You Hundreds!), you may forfeit a tax credit by NOT trading the vehicle in, and you need to think of that as an expense. Maintaining insurance on the vehicle while it is for sale is an additional expense you should consider.
5) WHAT SHOULD I ACCEPT IN PAYMENT? – We recommend accepting only cash or a bank check in a private sale. Make sure that if you accept some other form of payment you do not release either the vehicle or the title before funds have cleared.
6) WHAT ARE SOME LESS OBVIOUS CONSIDERATIONS? – Selling privately can take up a good deal of time and energy with phone calls and appointments. If and when potential buyers show up and look at the car, they will often want to take the vehicle to a mechanic and you may have to accompany them. You will have strangers coming to your home. Although you might have no further legal responsibility once a sale is consummated, there can be repercussions if a mechanical difficulty arises soon afterwards.
These are some of the important things to consider before selling a vehicle privately. Should you decide to go this route, we suggest using the Galves value as your starting point in pricing your vehicle correctly.
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