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Supply chain issues related to the pandemic have dramatically increased used vehicle prices in recent years. According to CarGurus.com, used car prices have increased an average of 44% since 2019.
What To Know When Selling A Car Privately
Among used vehicles at the lower end of the price scale, the impact of supply chain issues is even greater.
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“It’s harder to find good stuff now and the prices are much, much higher,” says Mark Scroggs, an independent dealer in Phoenix who buys 10 to 15 cars a week. “Watching a junk roll through an auction with 150,000 miles fetching three grand. Once the dealer fixes the car, it will cost $5,000 or more.”
Every additional $1,000 in your budget allows you to get a newer car with fewer miles on it.
Phong Ly, CEO of used car website iSeeCars, says shopping is much easier if you take the time to do some online research before physically inspecting the car.
The search filter on iSeeCars, for example, can customize results not only by make and model, but also by the age of the listing or by vehicles with a recent price drop. Other car buying apps and websites allow you to filter out cars with salvage titles or cars from online-only dealers.
How To Sell Your Car: Trade In Or Private Sale?
On a tight budget, you’re looking at cars that are at least 10 years old and have at least 100,000 miles on them. While that sounds like a lot of miles, Scroggs says that in the past, if “a car had 100,000 miles on it, it was done. You don’t change spark plugs for 100,000 miles now.”
Still, with a car of this age and wear and tear, chances are you’ll be the ultimate owner. The car’s resale value is less important than its history. With that in mind, try these filters on your favorite car buying app:
Your goal is the lowest mileage, accident free, single owner car you can afford. If it has a vehicle history report with maintenance records, so much the better.
The cars that show up may not be stylish, efficient or shiny, and they may not be exactly the type of car you want – but someone kept them running and saw no reason to throw them away.
Selling Your Car
You can find what you want by carefully filtering your searches through the dealers’ used car listings. Vehicle history reports, such as CarFax reports, are increasingly included on dealer websites as well as in car-buying apps.
Craigslist and Facebook Marketplace are solid options for finding cheap local cars — but they’re also exempt from many of the laws and safeguards that govern dealer sales. It’s unlikely that the record will include, for example, a vehicle history report or even provide the 17-digit Vehicle Identification Number or VIN that you need to run. There is also a small penalty if you are cheated.
In addition, cars sold by private parties have not been inspected or refurbished. A dealer can throw new (but cheap) tires on an older car; a private seller does not have to. If you plan to buy from a private party, allow $100 to $200 for inspection.
Mark Holthoff, manager of Klipnik.com, a community website for used car enthusiasts, says your money will go further if you look for a vehicle with minor cosmetic flaws, such as faded paint, which lowers the price but doesn’t affect mechanical performance. .
Top Tips For Selling Your Car Privately
But Scroggs warns of a “Toyota or Honda tax” – a premium placed on these high-end Japanese brands because of their reputation – distorting the value proposition when buying a cheap car.
Be open to more affordable Japanese brands such as Mazda, Nissan or Mitsubishi, or even an American car. Scroggs says his experience at auctions has shown him that the same money will buy an American car five years newer, with fewer miles, than a comparable Honda or Toyota.
After a decade, it matters more who owned the car than who made it. Title deeds, as well as a personal inspection, will reveal a lot. “If there are hamburger wrappers all over the interior, they probably haven’t changed the oil,” says Scroggs.
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Sign up and we’ll send you Nerdy articles on the money topics that matter most to you, along with other ways to help you get more out of your money. Whether you’re looking to trade in your car or offload another one to take advantage of increased used car values, selling your vehicle privately can get you more money than trading it in to a dealer. However, the financial gain comes with some trade-offs. You will need to devote more time and effort to the sales process, and there are additional risks involved in vetting potential buyers, test driving and accepting payments. Learn how to navigate each step of the process to ensure the extra effort pays off.
Many factors affect the value of a car. Vehicle age, mileage and condition are important, but external variables including market conditions, fuel prices and brand appeal also play a role. For example, the lack of inventory has caused used car values to skyrocket, especially for older vehicles: Among dealers, the median price for a 10-year-old used car (2012 model year) as of July 2022 was $16,331. By comparison, the median price for a 10-year-old vehicle (2010 model year) was just $8,995 in July 2020. To determine a vehicle’s value, check comparable used car listings or have the vehicle appraised by a dealer or used car chain like CarMax.
Should I Trade My Car In Or Sell It Privately?
Next, you will need to advertise your vehicle to potential buyers. First, take a photo of the car and create an ad using online tools like Sell Yourself. Once you’ve highlighted your car’s strengths in your ad, you’ll need to communicate with potential buyers via email and phone calls. Take this opportunity to screen buyers and be on the lookout for any red flags, such as a buyer who only wants to communicate via email or text and refuses to speak on the phone. You’ll want to show off your vehicle’s best features while being honest about its condition – buyers don’t expect a used car to be in perfect condition, but they do expect it to match the description.
A private sale requires more forethought when it comes to paperwork than a deal with a dealer who can usually handle this step. You will need all the key documents, including the vehicle title and the bill of sale, which serves as confirmation of the transaction; bill of sale is recommended for private car sales and may be required in select states. If you still owe money on the vehicle and the title is in lieu of possession, you will need to contact your lender to get the payment amount and instructions to complete the transaction.
Although not mandatory, gathering additional documents such as a vehicle history report, maintenance records and extended warranty details can make the vehicle more desirable, helping you get the most money for it or sell it faster.
Selling a car privately also involves more uncertainty than trading with or selling to a dealer. From meeting strangers on test drives to transferring ownership and receiving payment for the vehicle, you’ll want to prioritize your own safety and security as well as the safety of the vehicle.
How To Prepare A Car For Sale
When setting up a test drive, talk to the potential buyer on the phone, arrange to meet in a public place, and if possible, bring a friend along. If the buyer insists on the test drive himself, be sure to take a photo of his driver’s license information before handing over the keys.
Once you have an acceptable offer on the table, you will need to transfer ownership and securely accept payment. Let the buyer know your preferred method of payment – cashier’s check or cash is best, as personal checks carry more risk. Never accept a check that is higher than the asking price for the vehicle. A common scam involves the buyer sending a check for more than the purchase price and asking the seller to refund the difference (these checks are usually fake). Do not transfer ownership of the vehicle until full payment is received in cash or the buyer’s check clears.
Some private sale scenarios require several additional steps to complete the transaction. For an out-of-town buyer, you’ll need to arrange for the vehicle to be picked up or consider using a delivery service to transport it. Prices vary depending on the length of transport and
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