Avoid These Car Selling Pitfalls
By Tom Catuosco
Selling a used car can be an intimidating process for a first timer. While it’s not rocket science, there are some things you have to be careful about if you want the sale of your car to go smoothly and you want to get a fair price. Here are 9 common mistakes to avoid when selling a used car.
Wrong Pricing - This is the number one thing to consider. If you sell a car, you have to know how much money you want for it. So, how do you establish what to ask? Setting your price unrealistically high will scare off buyers. A price that’s too low will needlessly cost you money. While used car values are not set in stone, there are a few different resources you can use to determine what’s a good asking price for your car.
Used car price guides, such as Kelley Blue Book, can be useful to get pricing ideas. Keep in mind, these guides may be useful, but they’re not infallible. Accurate pricing depends on various factors such as mileage, age, condition, options, color, etc… When using price guides, always try to account for all those variables to get as accurate a price as possible. It’s good to use a few different guides, as they can sometimes give different estimates. You can average out the different estimates to help set your price.
Online auction sites, such as eBay, can also give you an idea. Try to find auctions for cars similar to yours that have already ended to see what the final sale price was. Don’t simply look at ones currently for sale, as some sellers ask unrealistic prices.
If you're selling something a little out of the ordinary, such as a classic car or sports car, you may want to join an internet forum dedicated to that make/model to get opinions. Enthusiast car forums have their fingers on the pulse of the current market for these special cars.
Once you’ve done research and determined a fair price that you want to get, set your price a little higher. If you want to get at least $6,000 from the sale, price it a little under $7000. Most used car buyers will want to negotiate the price down. This will allow you room to give them a “deal” and still get the price you want. For high priced luxury or sports cars, you’ll need to set the price even higher to allow more space for negotiation.
Wrong Time to Sell - Certain times of the year can be better to sell a car than others. People are more likely to buy a convertible or sports car in the spring & summer when the weather is nice and they can enjoy it - not so much in the winter when it’s sleeting outside. Economic conditions can also factor into when you should sell. When the economy isn’t doing well, people have less money to spend. If you sell during bad times, you’ll generally get less than you want for your car. This is especially true if you’re selling a luxury or sports car. Even in bad times, people need vehicles to get around, but they’re less likely to spend money on a car they consider a toy, when times are bad. If you’re not under pressure to sell your car right away, you should hold off until the right conditions exist to get the best price out of your sale.
Poor Advertising - Effective advertising is important to selling a used car. People can’t buy it if they don’t know it’s for sale. There are a few different avenues to help you advertise, just don’t spend too much money on them. Newspaper ads are basically a waste of money. Less and less people read the newspaper everyday. Online is the way to go.
When you advertise online, try not to spend too much money. Some sites charge a lot of money for posting a car ad. Before you pay for one of those sites, do research online to see if people have any success selling through them. Any significant money spent marketing your car should only be spent if it will likely get you a higher price, otherwise, it’s just money out of your pocket. There are plenty of free sites where you can advertise your car. You should take advantage of them. The more exposure, the better chance of a sale. Just make sure any websites you post on will reach your intended audience. Some websites get most of their website traffic from foreign countries. You're more likely to be contacted by online scammers than legitimate car buyers in such cases.
As with pricing research, make/model specific enthusiast websites and discussion forums can be a great place to advertise if you're selling a car that’s a little out of the ordinary. While many of these sites require you to join as a paying member before allowing you to post your car for sale, it can be worth it. Enthusiast car websites will have the exact people you’re looking to target - people interested in your type of car.
When you post any online ad selling your car, make sure the ad includes a well written, honest description of the vehicle’s condition, the price, some form of contact information, and LOTS OF PICTURES. Many people won’t even consider reading a car for sale ad if it doesn’t include photos.
Oh, and one last thing...don’t forget to put the good old “FOR SALE” sign in your car window. It’s cheap, easy, and you never know who might see it.
Dirty Car - Before you take pictures of your car for advertising purposes or show it to a prospective buyer, make sure you clean the car. First impressions are everything. If you show a dirty or cluttered car, many buyers will look elsewhere. Showing a dirty car gives the impression that you don’t take care of your things. People don’t want to buy a car from a slob who didn’t take care of it. Cleaning your car is one of the easiest and cheapest things you can do to ensure the highest possible sale price. A couple hours of time, some car wash, wax, Armor All, and a vacuum will get the job done.
Repairs Not Made - People don’t like to spend money on things that are broken. You’ll have an easier time selling a used car where everything works correctly. If there are any problems with your car, get them repaired before you sell...BUT, only if it will increase the sale price of the car at least as much as as the repair bill. There’s no point spending money on a repair if you won’t get a return on investment. If there are major issues not worth repairing, simply price the car accordingly and disclose them to potential buyers.
Pushy Sales Pitch - Nobody likes a pushy salesman. You want to sell your car, but don’t go overboard with the sales pitch. When showing the car, be sure to accentuate all the positives of the vehicle. Make sure you’re thoroughly educated on the car so you can knowledgeably answer questions. Be honest about any issues the car has. Just don’t come off as a pushy, shifty creep. Using an approach that’s too pushy will make you seem dishonest. Dishonest people lie, and people don’t want to buy cars from liars.
If you have a buyer checking out the car and there are other buyers interested in the car, by all means, let the buyer know there are other interested parties. Just don’t be so pushy by saying, “Better buy it right now, this second! I got ten other guys all coming today willing to pay full price! Hey, you’ll never find a better deal.” That’s just too obvious a sales ploy. Also, be sure not to use the phrase “I wouldn’t lie to you” when selling a car. A buyer will translate that as “I’m totally going to screw you!”
Many buyers may wish to have a PPI, or pre-purchase inspection, performed on your car by a mechanic before they commit to buying. As long as the buyer is willing to pick up the cost of the inspection, you should allow it. It will put the buyer’s mind at ease that you aren’t hiding anything.
Handshake Agreement - When you and the buyer do agree on a price and sale terms, make sure you draw up a written sales agreement for both parties to sign. Handshake agreements can lead to “he said, she said” conflicts after the sale is complete which can cause major aggravation. Get everything in writing so there’s no confusion. Make sure to note in the agreement the car is being sold “as is”. Unless you’re in the car dealing business, you don’t need the hassle of dealing with problems once the sale is complete. The agreement should make it clear that any problems arising with the car after the sale are completely the buyer’s responsibility. Depending on the complexity of the agreement you reach with the buyer, you may wish to have a lawyer look it over before signing. The sales agreement is a binding legal document. Once you sign it, your on the hook for any of the stipulations in it...even if you don’t understand them.
Giving The Keys Before Payment - Do not give the car keys to a buyer until full payment has been made for the car. If they want to test drive the car, make sure you accompany them. You wouldn’t let a stranger into your house without you being present, and you should not let somebody you don’t know drive off with your car before they’ve bought it.
Unverified Funds - Tied in with not giving the keys before getting payment is verifying the payment is legitimate. If the buyer is paying with a check, make 100% certain the funds have cleared and are in your bank account before giving the keys. There are plenty of scammers out there who will pay with bogus checks or money orders that look legitimate. If you find out the payment is bogus after you’ve handed over the car, there is little chance of getting your car back. The scammer will be long gone.
Selling a used car can be a big hassle, but it doesn’t need to be. Be sure to avoid the used car selling mistakes listed, and your car sale can be a painless experience.