This is the first installment of a 4-part series about my recent experience in selling my used, ahem, pre-owned car. The other posts in the series are:
- Selling a Used Car, Part 2: Placing an Ad
- Selling a Used Car, Part 3: Test Drive and Negotiation
- Selling a Used Car, Part 4: Closing the Deal
I wanted to replace my car. I’ve owned it for seven years and driven it for 90,000 miles. It has given me good service but because I often drive to remote places for backpacking and skiing in the mountains, I’d like to have a more reliable vehicle. I checked with a few dealerships about trading in the car when I buy a new car, but the most they offered me was the the Kelley Blue Book Trade-In Value, which was about $6,000. Meanwhile the Kelley Blue Book Private Party Value is about $8,000 and the Kelley Blue Book Suggested Retail Value is over $10,000. This means the dealership would buy my car for $6,000, clean it up and sell it for close to $10,000. That’s a much larger profit on a used car than what they make on selling a new car. With the encouragement from a few co-workers who sold their cars privately, I decided to split the difference with the buyer. The Blue Book Private Party Value sits in the middle between trade-in and retail. I get a higher price than trade-in and the buyer gets a lower price than what the dealerships charge. A true win-win.
Prepare the Car for Sale
The biggest question mark for any buyer when they buy a used car is whether they are buying someone else’s problems. Nobody wants to take over a car that have hidden problems and will require major work soon after they purchase it. That’s why the car dealerships offer “certified pre-owned” vehicles and charge a premium for it. When I sell my car privately, I want to create my own certified pre-owned program, giving my buyer the confidence they are not getting into a troubled car.
If the car has minor problems, fix it before you try to sell it. Replace burned lights or squeaking brakes. Fix that Check Engine Soon light. Buyers are unlikely to buy your car if it has apparent problems, which indicate to them that you haven’t maintained the car well. My car doesn’t have any problems, so I didn’t have to fix anything.
Clean up the car. Remove junks from the interior. Give it a wash. Wipe it clean. Vacuum the seats and carpet. Good appearance sells better. Some suggested getting a detailing job. I didn’t bother but it may be worth it if you are selling a newer car.
Get a smog check (if required). My state requires that the seller provides a valid smog check certificate to the buyer. A smog check is valid for 90 days in my state. Get it done and make it another confidence booster.
Get a visual inspection report from an auto service shop. AAA in some areas do it for free for members. So do many oil change places when you change your oil there. The visual inspection report will show to your potential buyers that the car has no problems.
Gather your maintenance records. Showing the maintenance records will give the buyers the confidence that you have maintained the car well.
Get a CARFAX Vehicle History Report. A CARFAX report is like a credit report for a car. It shows the title history and some maintenance history. Some used cars on the market were involved in serious accidents, sold by insurance companies as “totaled” on auction, and later reconstructed. These cars have so-called salvaged title. Buyers will want to avoid these cars because they had structural damage. Showing the buyers a clean title will again help eliminate their fear of buying into hidden problems. Being able to show that the car is a 1-owner car also adds value. A CARFAX report costs $20 for one vehicle or $25 for unlimited vehicles in 30 days. Save the report to PDF and link to it in your ad.
Here’s my own certified pre-owned program:
- No problem at test drive time
- Clean interior and exterior
- Valid smog check certificate
- Visual inspection report from an auto service shop showing no problems
- Maintenance records
- CARFAX report showing clean title and 1 owner
If I were a buyer, having seen all of the above, I think I would be comfortable buying the car if it’s the model I wanted and the price is right. The next step for me as the seller is how to let the buyers know and come see the car. To be continued.