Sell Your Car: Everything You Need to Know

October 28, 2019 in Sell Your Car

If you need to sell your car but you’re not sure where to start, don't worry. Many people feel anxious and intimidated when they begin the process of selling a car. The good news is most of that anxiety is probably unnecessary. 

Can you realistically sell your car yourself? The short answer is yes. 

While the selling process can be daunting, with a little research, you can learn the ins and outs in no time. If you simply don’t know where to start, we can help! This is our crash course on how to sell your car - guaranteed to get you on the road to a successful selling experience. 

First, Get Your Paperwork in Order

Before you start, keep in mind that your final outcome will reflect your level of effort. So don’t slack off on this step. Actually, don’t slack off on any of these steps! Take it from us, there is nothing worse than losing a committed buyer because you didn’t do your homework ahead of time. 

The first thing you need to do is gather up all of the following documents and records. Getting your paperwork in order will make this entire experience much easier. 

Each state has its own paperwork requirements, but for our purposes, we’ll just go over the standard items you’re most likely to need. 

Here’s a list of the items you should have ready:

  • Photocopy of your government-issued photo ID 
  • Photocopy of a government-issued ID matching the name on the title (if it’s not you) 
  • Current registration 
  • Bill of sale
  • Release of liability form
  • Warranty documentation or As-is documentation 
  • State-specific odometer disclosure
  • Maintenance records (all of them) 
  • Printed copy of vehicle history report (VHR) 

If you have a loan on the vehicle, you’ll also need your lien information and a 15-day payoff amount. 

If you’ve already paid your car note in full, you’ll need to locate your title. If you don’t have your title, you’ll need to get a replacement from your DMV or other state office. 

Next, Make a Checklist

After you have your documents and records ready, we recommend making a checklist to aid in the selling process. A good checklist is a helpful tool for every sale, whether it’s your first time or you’re an experienced seller. 

On your list, you should include everything that needs to be done prior to the sale. This might include cleaning and detailing, updating any neglected maintenance issues, resolving any minor mechanical or aesthetic issues, and replacing any missing parts or pieces. 

You’ll also want to add “to do” tasks such as making signs, writing ads, screening interested buyers, arranging test drives, and deciding your terms for accepting payment. 

Option #1: For Sale By Owner

Now that you’re all organized and ready to go, it’s time to sell your car! There are several different ways to sell your, and the first one we’ll look at is selling the car outright to another private party. 

A private party sale is typically the way to get the most money for your car. However, this approach will require some effort. You’re definitely going to earn that money. 

First, you’ll need to establish your asking price for the car. This can actually be pretty tricky, and there’s a whole section about this down below. Most of the “book value” tools you’ll find online will give you a wide range of estimates, rather than the exact value you’re looking for. Nevertheless, they’re a good starting point. 

Another approach is to canvas local dealerships and classified ads to see what similar cars are selling for in your area. Be careful to keep a close eye on the trim levels and options of the cars you use for reference. The next trim level up or down from yours could be a difference of thousands of dollars, so you want to make sure you’re always comparing apples to apples. 

You can save yourself a lot of time by getting a quote from an independent third-party appraiser. You’ll get a solid number this way, but the cost will depend on what services are available in your area. 

Advertising: Window Sign or Online Marketplace

In the past, the window sign was the tried and true method of selling a car on your own. The biggest downside of using a window sign is the time that’s required. It’s not uncommon to go months without attracting any interest. 

Today, online marketplaces Craigslist and Facebook Marketplace allow you to put your car in front of a much wider audience immediately. Of course, with any online advertising forum, it’s important to maintain your safety. Always exercise good judgement when you’re responding to inquiries and meeting strangers. Better safe than sorry! 

In addition to the general online marketplaces, there are many websites dedicated to online used car sales. You can use these sites to narrow your audience to people who are specifically shopping for used cars, but it’s important to note that you’ll also experience much tougher competition here. 

Car buyers perusing online car sites can, and will, compare your car against every similar car in your region. As a result, your car’s condition and options can have a big impact on the offers you’ll receive. 

Handling the Test Drive

Whether you choose to advertise your car with a window sign or an online listing, or both, you’re going to have to interact with random strangers in order to make a sale.

Obviously, potential buyers will want to take your car for a spin to make sure it runs well and matches the description in your advertisements. 

Here are some tips to help you navigate what many people consider to be the sketchiest part of selling a car on your own: the test drive.

  • Set the Stage for Success - Remove all valuables from your car. Agree on a well-lit neutral meeting place. Never invite a stranger to your home, and never visit a stranger’s home. Never meet in a secluded location or meet after dark. 

  • Never Go It Alone - Always tell someone where you will be and who you will be meeting with. If possible, bring a friend with you. 

  • Dictate the Details - Clearly define a time limit for the test drive. Suggest a safe route that will demonstrate your car’s performance both in town and on the open road. 

  • Cover Your Back - Check your insurance coverage limitations for drivers other than yourself. Ask your potential buyer to bring a photocopy of their driver’s license in case of attempted theft, and don’t let them drive your car without it. 

  • Play It Safe - Resist the urge to accompany the potential buyer on their test drive in order to “close the sale.” Obviously, you should never get into a car with a stranger. There will be plenty of time for you to sell your car when the test drive is over. 

Option #2: Trade Your Car In

If you’re in the market to purchase a new car, trading your old car in may be a better solution for you. 

While you will probably receive a higher price if you sell your car yourself, the trade-off in time and effort easily outweighs the dollar amount for many people. Trading your car is fast and easy compared to selling it yourself. 

Better yet, trading in comes with a tax incentive. In many states, you will only pay tax on the difference between your new car price and your trade-in value. That tax break can be hundreds or thousands of dollars, and it might even outweigh the higher price you would have gotten through a private sale. 

Option #3: Third Party Services

Another alternative is to use a third party service to sell your car. There are lots of  third party services available on the internet today. We’ll break them down into categories and look at the pros and cons of each. 

Algorithms, or “Instant Offers”

Plug in your car’s year, model, and mileage and get an instant offer from an algorithm. These services are very fast and very convenient, but the price you get will likely be very low. 

The offer you receive is generated by a computer, without any real people ever laying eyes on your car. The problem here is that two different cars can have the exact same year, model, and mileage - yet have wildly different values based on their condition and history. 

To account for this, the algorithm assigns every car a “safe” value based on the lowest common denominator. 

“We Buy Any Car” Websites

Have you ever been driving down the road and seen a sign advertising “We Buy Any House?” Of course you have, those signs are everywhere. Well, there are several similar services online that will buy any car. 

Are these services a viable option for you? Of course they are, they’ll buy any car. Will you get top dollar for your car? Of course not. 

Some people view these services as a last resort. If you’ve already driven around with the window sign, advertised your car on the online marketplaces, and taken it in to a local dealership or two - then you might start considering one of these services. 

Appraise and Buy Services

Appraise and buy services are a good option for most car owners. You won’t get quite as much money as you’d get from a private party sale. But the process will be much quicker and easier. 

The most difficult parts of the selling process are managed by the service. They have professional appraisers calculate the value of your unique car, so you’ll probably get a higher offer than you’d get from an algorithm “Instant Offer.” And they have an administrative staff to manage the title transfer and payment details. 

There are some really big and well-known companies that offer local appraise and buy services - and they might, or might not, have an office that’s close to your home. 

Now that we’ve launched The Appraisal Lane, you can access “appraise and buy” services from the comfort of home on your computer or mobile device. Upload photos of your car and complete our simple questionnaire, and our team of appraisers will make an offer on your vehicle while you relax on the couch. 

We combine the convenience of the “Instant Offer” with the accuracy of the “Appraise and Buy” service. The whole process takes less than 30 minutes, and you can redeem our offer for cash at a dealership near you. 

Finding Your Car’s Value 

After selling a car, most people agree that determining their car’s true value was one of the hardest parts of the process. We touched on this briefly above, and now we’ll dive down for a little more detail. 

Here are four resources that are available to help you find the value of your car. You can find a value using any one of these, but you’ll find the most accurate value by combining them together.  

Online Calculators (aka Algorithms)

To get the most out of online price calculators, you need to understand their limitations. There are hundreds of variables that can impact your car’s value. Algorithms only take a handful of these factors into consideration. 

Algorithms don’t have eyes. Because they don’t have eyes, they can’t look at your vehicle. And because they can’t look at your vehicle, that can’t see any of the dings, dents, or scratches. They can’t see pet hair, or stains on your seats, or cigarette burns in your upholstery. 

As a result, algorithms are good at narrowing down the value of your vehicle to a certain range based on year, model, and mileage. But they’re not so good at zeroing in on your exact value within that range. 

Algorithms are a good starting point, but when you’re trying to sell your car, you need to get more precise information. 

Local Dealerships 

Your local dealership is probably the closest place where you can get a real person to take a look at your car and give you an informative opinion about what it’s worth. It’s great to have a real person to answer your questions and share their insights. 

Of course, if you go to the dealership to find out what your car is worth, you can bet that they will try to sell you a car while you’re there. That is their business, after all. 

You should also be aware that your car is likely worth more to the right dealer than it is to the wrong dealer. If you’re selling a full-size pickup truck, a dealer that specializes in subcompact electric cars probably isn’t the best place to get an appraisal. 

Market Price Comparisons

One of the best ways to find the real value of your car is to research the prices of similar cars. Be careful, though, because it’s easy to make a mistake if you don’t pay attention to the details when you’re researching. 

Be sure that you’re comparing vehicles that have the same trim level and options as the car you’re trying to sell. Different trim packages can change the value of a vehicle by thousands of dollars - so be sure to look at cars that are an exact match to yours. 

Also be careful to stay within your local area when you’re researching prices. Your make and model might have a much different value in another city or state. 

Finally, get a good idea of the number of similar vehicles that are already on the market in your area. The law of supply and demand applies here and if there are many cars just like yours on the market, that competition can drive your price down. 

Professional Appraisers

Just like selling a house, when you need to sell your car, the best way to determine its value is to consult a professional appraiser. A simple search may yield plenty of results in your area, but if you live in a rural location you might need to travel to the appraiser. 

With a legitimate appraiser, you will receive an accurate and exact price. But, you will also receive a bill for an additional $100 to $500, on average. Consider the cost, and then decide if getting a professional appraisal is the right choice for you. 

Market Considerations

Before you sell your car, there are a couple of market considerations you should be aware of. The subtleties of seasonal and regional market fluctuations are something most drivers don’t think about. But if you play your cards wrong with these two factors, you could cost yourself hundreds of dollars or more. 

Sell Your Car in the Right Season

Depending on your local climate and the type of car you need to sell, there can be a significant difference in value depending on the season. 

You might have a very nice convertible that’s worth a lot of money. But if you try to sell it in New England in November, you’re going to be facing a “buyer’s market,” and you probably won’t get as much as the car is worth. 

You might consider waiting a few months and selling your car next May when spring fever is in the air. You’ll likely get much better offers than you would have gotten in the fall. This is an extreme example, but it illustrates an important point. 

Location. Location. Location.

The three rules of real estate also apply to car sales. If you’re moving from Billings to Brooklyn, sell your full-size truck before you hit the road. You’ll find more potential buyers out in Big Sky Country, and your truck will be worth more there too. 

Options like tinted windows and light-colored interiors will bring a higher price in warmer climates. All wheel drive and heated seats are more important up north. 

Weigh Your Options Before You Sell Your Car

Now that you’ve had some time to think about the work that will be required to sell your car, it’s time to start making some decisions. 

Remember that your car is a depreciating asset, which means that it loses a little bit of value with every passing day. 

Which approach is right for you? Only you can make that call. Here’s a quick recap of the two most popular options, along with a third option that we haven’t discussed yet. Hint: we saved the best for last! 

For Sale By Owner

The most difficult way to sell your car is also the option that will bring the highest price. Think about the time and effort required, and decide if the extra money is worth the trade-off. 

If you choose a private party sale, you will do all the footwork yourself. You’ll be responsible for getting the vehicle ready for sale, including any necessary repairs. You’ll be responsible for all of the paperwork required by your state, county, and municipal governments. You’ll need to screen potential buyers, safely arrange test drives, and manage the payment yourself. 

Perhaps most importantly, if something goes wrong with the vehicle after the sale, you could potentially face some legal liability. 

Trading In

If you’re in the market for a new car, trading your old car in is a very attractive option. You will get less money than you would have gotten through a private sale, but the difference will likely be made up by the tax savings on your new purchase. 

Trading in is fast and easy. You might spend a little time negotiating your trade-in value with the dealer, but compared to the work required for a private sale, trading in is a walk in the park. 

The Appraisal Lane

The Appraisal Lane combines the quick convenience of online “Instant Offer” tools with the reliable valuation of professional appraisers. Skip the hassle and get a guaranteed offer in 30 minutes or less. 

You simply upload photos of your car and complete a simple questionnaire. Our team of live appraisers will give you an offer you can redeem for cash or trade-in value at a dealership near you. Sell your car the easy way. No ranges. No estimates. No negotiations. And best of all, our service is completely free.