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If you do not want to keep a vehicle you
already own, you have four options – selling to an individual,
selling to a dealership, trading in or donating to charity.
Selling To An Individual
Of your options, selling your vehicle to an
individual may take the most effort. You must:
- Advertise your vehicle.
- Show the vehicle to potential buyers.
- Answer potential buyers’ questions.
- Negotiate the sale and arrange for payment.
- Collect and complete the appropriate paperwork.
If you sell your vehicle to an individual,
you can get a better price for it than you
can expect if you sell it to a dealership or trade it in.
- Determine the price you want. Check used-vehicle pricing guides
such as the N.A.D.A. Official Used Car Guide or Kelley Blue Book
to determine your vehicle’s retail value. Low mileage and
additional options can increase the price. High mileage and certain
options and features not typically found on the model can lower it.
Be honest about the vehicle’s condition as you review these
guides. Look at the classified ads in your area for prices
of vehicles like yours; price your vehicle competitively.
No one will pay a premium price for a vehicle with obvious
flaws. Remember that the price you ask and the price you
accept may be different. Leave room for your buyer to negotiate.
- Gather paperwork. Locate your title or pink slip, the registration
and your owner’s manual. Obtain the necessary information about
how to transfer the title, registration and license plates so
the sale will go smoothly.
- Collect maintenance records. A serious buyer will consider
how well you have maintained your vehicle. Receipts from
past maintenance will also help you prove mileage. Keep
service stickers updated and change the oil just before
you advertise. A tune-up will also ensure that buyers
get a smooth test drive. But major repairs are probably
not worth the cost. More than likely, you cannot raise
your price enough to compensate for expensive repairs.
- Make sure your vehicle passes all mandatory safety or smog
tests. Otherwise, you must market your vehicle only to buyers
who are willing to take the vehicle “as is” and who want to
pay a lower price than you want.
- Detail your vehicle and take care of small mechanical problems.
Buyers want to know that you care about your vehicle.
- Make sure your insurance covers prospective buyers who
test drive your vehicle. As the owner, you share the
liability for any accidents. Be sure a potential buyer
can safely operate your vehicle.
- Be cautious of vehicle thieves. Insist that you ride
along during a test drive or mechanic’s inspection.
If you are concerned for your safety, ask a friend
to accompany you.
- Be honest about your vehicle. Most buyers understand
that a used vehicle is not a perfect product. If the
vehicle is in fair condition, do not describe it as
“mint condition.” If you neglect to mention a known
defect or problem, you will lose credibility and
possibly the sale. Worse, if the sale takes place
and the buyer believes the facts have been misrepresented,
you could be subject to claims for deceptive trade
practices acts in most states.
- Complete the legal documents. Contact your financial
institution or other lender and clear the title if
you have an existing vehicle loan. Supervise the
transfer of the title in person at your local
Department of Motor Vehicles (DMV).
If you live in a state where the license plate goes
with the vehicle, the vehicle is your responsibility
until the pink slip, registration, fees, smog
certificates and other documents, such as an
odometer statement, required in your locality
are received by the DMV and transferred to the buyer.
Sign the title over to the buyer as soon as
you receive full payment. Make sure the buyer
applies for a new title in the buyer’s name.
The buyer must also pay sales tax on the
vehicle when the state issues a new title.
You may also want to sign an affidavit of
sale that states the buyer’s name and the
sales price. In some cases, the state requires
this affidavit. Even if it is not required by
your state, you may want to complete an affidavit
to ensure that your sale is completely documented.
- Cancel your insurance coverage on the vehicle you have
sold after you transfer the title. Otherwise, the new
owner will be driving under your insurance coverage.
Selling To A Dealership
If you sell your vehicle to a dealership, you may not
get the best price. The dealership must spend money
to repair and refurbish your vehicle to sell it at a
profit. Communicate your vehicle’s value to dealerships
who appreciate its value.
Trading In
Trading in your vehicle when you buy a new or used
vehicle at a dealership may be the easiest and fastest
way to dispose of it. Unless your vehicle is extremely
old or in poor condition, most dealerships will offer
something for your trade-in to make a sale.
Some states allow you to deduct the price of your
trade vehicle from the price of the new vehicle,
then pay sales tax only on the difference instead
of the full value of the new vehicle. This saves
you money and helps you realize more value out of
your used trade-in vehicle.
Unfortunately, what you get for a trade-in may
not be much. Even so, it may be the best option
if you do not have the time to sell your own vehicle.
Donating To Charity
You can get some value from your vehicle by
donating it to one of several charitable organizations
that accept used vehicles. For your donation, you
will receive a federal income tax deduction for a
non-cash charitable contribution in the amount that
the charity receives for your vehicle when it is sold at auction.
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