Instead of trading in your used vehicle at a dealership — where you are likely to get less than the retail price — you can sell it yourself to a private party. While you may be rewarded with a more lucrative sale, it will also require more effort. Here are some of the most important steps you’ll need to take:
Advertise
Advertising is arguably the most time-consuming aspect of making a private vehicle sale. To attract as many potential buyers as possible, you should first clean and detail the vehicle before taking lots of pictures. “Be sure to take multiple shots from different angles and choose the best of your selection when you create your ad,” the DMV recommends.
There are many ways to create an ad. One of the most effective means is to use online listing services like Craigslist or CarGurus. You can also pay to feature advertisements on websites like Cars.com or Autotrader. “Some advertising methods are more effective than others, and cost can vary from free to quite expensive,” says Consumer Reports. “Use your imagination and go with what you think will work.”
Gather paperwork
At a dealership, most of the paperwork is handled for you. When selling privately, you need to maintain a paper trail yourself. The DMV says it’s better to do this early on. “If you wait to do this step toward the end of the process, you find yourself scrambling for all the necessary documents,” it explains. Each state has different requirements for paperwork when selling a car, so make sure to get acquainted with your local regulations. However, the DMV says there are a few things you’ll generally need no matter the state: the vehicle title, a bill of sale, warranty documents, maintenance records, a release of liability form, and as-is documentation. As per federal law, you’ll also need to provide an odometer disclosure at the time of sale or transfer of ownership.
Price competitively
Before you put your vehicle up for sale, you need to determine its worth and set a competitive price. There are many resources that can help you do this, including Kelley Blue Book, Autotrader, and Consumer Reports. You can also check prices at your local dealership if they have a car similar to the one you are selling. Consumer Reports recommends pricing your vehicle slightly higher than you are willing to take, but being careful not to go too high. “That way, the buyer can negotiate for a slightly lower price and feel good about it,” it says. “Don’t be greedy, though. You could scare off potential buyers who don’t think they have a chance to negotiate.”
Screen potential buyers
Depending on the success of your advertisements, you may be overwhelmed with inquiries and offers. To save time, you should only set up test drives for serious buyers. Additionally, you should watch out for scams and fraud. One way to ensure a safe transaction is to refuse any unusual requests, avoid selling to people out of state, refuse monthly payments, and stick to legitimate forms of payment like Zelle or Venmo (clarify what forms you’ll accept ahead of time). “Due to safety reasons, be sure not to do test drives that begin and end at your home,” Kelley Blue Book adds.
Privately selling your own vehicle is an involved process, one that could leave you with more money in your pocket than if you had traded in at the dealership. That said, it’s advisable to factor in the cost (in money as well as in time) of all that work before deciding to sell privately. You may ultimately find trading in to be more worthwhile.