How to Sell a Car
So you’ve decided to step into the wonderful world of used car sales and sell your old clunker to the first sucker that will show up with a fat roll of cash? Car Talk experts are here to help.
First things first, you've got to look the part. You’re gonna need a cheap cigar smoked to about half the way down, a well-worn tweed jacket, and if you can manage a five o’clock shadow and a paunch you will be really styling.
Kidding aside, selling your car is a big step. Other than your home, it may well be the most expensive thing you sell in your lifetime. You want to get the most money for your car possible, do it safely, and do it with the least amount of hassles. There are a few ways to get the car sold. Let us walk you through how to do it right, regardless of which option you choose.
How to sell your car in 2024
There are really four main ways to sell your car in this crazy inventory-starved environment. Our first suggestion is one you won’t read at other advice sites - keep that car in your family. Due to a shortage of everything from rare earth minerals to commonplace glass, automakers are unable to produce enough cars to meet the market’s demand. Therefore, used cars are in short supply and great demand.
If you have a car that is safe and reliable, Car Talk suggests being darn sure that nobody in your family needs a car before you let it go. If they do, your best bet is to sell it to them and keep that valuable “asset” in the family. Your author’s 2006 Honda Accord has been owned by three generations so far, and it is still reliably and safely getting one of us around. Each time we passed it to a family member we saved 6.25% of its value in state sales tax as well as the dealer markup on a new(er) car.
OK, so your family is all set and you need to sell a car. The remaining ways are as follows. First, private party - meaning you sell it to a person or a car dealer without also buying a new car from that dealer. Second, you trade the car into a dealer you will be buying a car from, be it used or new. And last, a new option called instant cash offer (ICO). Let’s walk through the basics of each scenario and save the details for later in the story.
Private party selling
Selling your car to a person or to a dealer of any kind is called selling your car “private party.” When you do this, you simply advertise the car, take calls from buyers, set up a meeting for buyers to see it, take their money, then give them the car and the title for it.
It sounds simple, and it really can be. Your author sold a Honda Fit in under 90 minutes start to finish once using Craigslist. However, you may want to budget a bit more time if your car is worth a lot of money and you want to get top dollar.
If you have more cars than you need, private selling is a no brainer. Dealers will offer you cash and handle all the paperwork if you have an outstanding loan. Don’t worry about attracting buyers. Finding folks to come take away your car has never been easier. Just be forewarned that if you sell a car, and then immediately buy a new one, there can be sales tax penalties. You should look into your state’s policy on vehicle sales taxes. Start at your state’s DMV website.
Dealer trade in
Of all the ways to sell a car, trading it in when you buy a new car is by far the easiest. Dealers will give you the lowest amount of money for your trade-in, but in states with sales taxes, you may benefit by being able to offset the sales tax on your new ride using the value of your trade. Let’s face it, time is money. For many of us, letting the dealer do their thing is the most pain free and least time consuming way to move on from an old car.
Read more on Selling Your Car to a Dealer here.
Instant cash offer (ICO)
A new way to sell your car is by using instant cash offers. Groups working with car dealers now offer to give you a valuation using just the internet. You fill in some facts about your car, they then spit you back a cash offer. No questions asked - sort of.
The groups that do this (Edmunds, CarGurus, Consumer Reports, KBB, and others) get a commission from the car dealers that will ultimately be buying your car. These deals are generally “pending inspection,” and those dealers are going to look over your car before they pay you that cash offer. So don’t be surprised if they meet with you and tell you the tires were dirty, so they can only offer you a lot less.
Dealers send owners ICOs in the mail. You may have gotten one. It sounds something like, “Hey Brenda, we at Cheetham Car Giant really need your car! We have none to sell, and only you can save us all from going out of business. Your 2018 RAV4 LE with 42,000 miles is worth $15,832 to us if you can please let us buy it from you.”
Dealers also employ call centers to bug you at home, and even hire attractive humans to walk around their service area waiting rooms to convince you to sell your car. Dealers make money on every transaction, so this should be no surprise.
ICOs are always helpful when you are starting the process of selling a car. Consider any ICO a lowball offer. Assume you will be asked to sell it for lower after the inspection.
Read more on Selling Your Car with an ICO here.
What is needed to sell your car
If you have been keeping your service records, it will now pay off. Having an organized folder, or heck, even a glove box full of receipts, is a big plus. It shows the buyer that the car has been serviced. It may even enable them to obtain an extended warranty. As we all know, extended warranty companies require proof or maintenance in order to pay out a claim.
You are also going to need your title. A title is a government controlled document that helps clarify who exactly owns a vehicle. If you own your vehicle outright, your local DMV should have provided it to you when you purchased and registered the car, or after you paid off your loan. The title is needed to transfer ownership. If you don’t have the title and you do own the car outright, your DMV can help you get a copy or explain how your state handles ownership transfers and titles.
If you are selling a car that was owned and registered by a deceased loved one, our condolences. We did this recently, and the DMV was very helpful and it was a smooth process.
If you still have a loan outstanding, call the loan provider first. Ask them to explain exactly how you sell a car that they technically own and which they hold the title to. They get these calls a lot, so they should be able to walk you through the process. If you have the cash and are not in a hurry, consider paying the car off and simplifying things. If not, don’t panic. It’s just a few more forms to fill out. The lender needs to be paid off before you can sell the car to a new owner. Hopefully, you have more in equity than you owe on the loan.
Read more on the topic of Auto Loans here.
Getting the car ready to sell
If you have ever sold a house, you know that some money that you can put into the home to make it presentable is worth spending and some is not. However, most projects that you think may be important don’t get you back what they cost to do. Cars are no different.
In many states, you must either sell the car “as is,” meaning it's a junker, or it will need to pass your state’s safety and emissions inspection. We suggest asking your trusted mechanic to check out the car to see if it will pass, or simply have it inspected. It’s usually a nominal fee. If it passes the inspection, your car's value is now a bit more concrete. Keep that inspection report handy.
To pass many state inspections, tires must be free of damage and have a certain level of tread remaining. If your car passes the inspection and the tires are not a problem, do not buy new ones. That will be a waste of money on your part. However, if they are unsafe, or worn past their wear bars, you should change them unless it is a junker you are selling “as is.” Don’t buy anything unusual. The safe bet is to buy the same brand and model tire that came with the car when it was new. No shopper wants a 2018 Corvette SS with new bottom-dollar tires called the “Motor Smile Roundies.”
If your vehicle is mechanically sound and will pass your state’s inspection, the best $200 you can spend on an older vehicle you plan to sell private party is as follows:
- Spend $30 and a half hour of your time making your cloudy headlights clear again.
- Spend $100 on a “Wash, wax, vac special” at your local detailer or car wash.
- Spend $70 on an oil change.
The three things above cover a lot of your buyer’s negotiation points. The car will look its best inside and out, and nice clear headlights will be a feature, rather than a way for your buyer to beat you up on price. By changing the oil, you get to tell the buyer that the “service is already done.”
We don’t have to tell you that at a minimum you will need a clean car with all of your personal belongings removed. But we just did. If you are going to sell your car online using a marketplace app like CraigsList, that app will likely have some great tips on what images work best. You will be taking some simple photos, so figure out which is the car’s best side and use that. If you want to alert buyers to some dings and scratches, take those images, but hold them back until asked. What you consider a blemish may not be a problem for some. Why highlight normal wear and tear?
Setting a price for your car
It’s now 2024, and cars a few years old are still selling at prices higher than the same model new. That is GREAT news for you. However, it does make setting a realistic price a bit of a challenge. The good news is there are endless valuation sites you can turn to. Both Edmunds and KBB are the two go-to standards in the industry. Just follow along their instructions and you will get a suggested price range. They will tell you the price if you sell pirate party (highest) or trade it in (lowest). Their tools also allow you to consider the condition, color, mileage, and features of the vehicle. They will also throw an ICO at you. Likely a lowball offer.
Now that you have something to work from, use shopping sites to compare your car to others like it for sale in your area. This is a good reality check. They may be advertised a bit higher than the ones you got from the valuation websites. That is because smart sellers don’t underprice cars. You can always lower the price later.
Once you know what your price will be, consider a few things. First, your list or asking price. That is what you will advertise. Next, your lowest acceptable offer. This is the price for the dealer who phones you three minutes after you list the vehicle online and says, “I can be in your driveway in 15 minutes with a cashier's check or cash if you will take $XXXX.” Convenience may be worth a bit of money to you. Or you may decide to wait and ask that the person call you back in three days to see if the car is still for sale. This is not a theory. We have had this happen and we took the easy path.
Advertising your car
Selling your car has never been easier. The internet is great for a handful of things. At the top of that short list is advertising stuff you want to sell to a massive audience of interested buyers. The classic used car advertising site for private party sales is Craigslist. Others include Autotrader, eBay Autos, Car.com, CarGurus, Facebook Marketplace, and TrueCar. If you are selling a classic or a restored antique car, consider Hemmings. If your car isn’t running and needs to be repaired or restored by the buyer, Bring a Trailer is a popular site.
If you have a specialty car you can also use online fan clubs and groups as a place to advertise if the rules allow for it (and they often do). Let’s say you own a Subaru WRX with some modifications. The fan clubs for that model may be a good place to see if you can get a top-dollar offer from a fellow enthusiast who will view the muffler delete, engine modifications, and the ironing board welded to the trunk as good things.
Writing an advertisement for a car is as much art as science. Our suggestion is to read how the ads on the site you plan to use are worded and follow the format. Be truthful, but put the car’s strengths up front. “Lovingly maintained, perfectly-running, fully serviced,” and such are the words your buyer wants to hear. Resist the urge to detail every specification. Provide the year, make, model, odometer reading, and full trim. Describe the colors inside and out, and list any options the car has. “Never been in an accident” is always a plus if it is factual. If you have recently done important high-cost service, list the work. Such as “Timing belt done at 90K, new tires at 95K.”
If you have a warranty on your vehicle that is transferable, lead with that. Know the facts about how the transfer works, but any buyer of a used vehicle will be thrilled to hear it includes a warranty that is either paid for, or that might be transferable to them. Your car might still be under the new car warranty, might have a Certified Pre-Owned Vehicle warranty that can be transferred, or you may have an aftermarket extended warranty. Do your homework. Know what you can offer.
How to safely show your car
Safety when selling anything online is always an important consideration. After some sellers were harmed by folks they connected with online, a new safety culture emerged. The basic premise is to do the transaction in a safe environment. Have the buyers come to you in a place you are safe. If you need a safe place, your local police may have a designated area for such transactions, or you can simply meet the buyer at the police station parking lot or the local bank. Both will be monitored by security cameras. We suggest not having a prospective buyer come to your house, under any circumstances.
The safest way to sell your car is to your dealer or via an ICO. However, you should not feel as if advertising your car online is a deathtrap. Use common sense and follow the suggestions of the app you use. Here are a few suggestions we make:
- Only meet buyers in a safe place. Don’t go alone if you can find a companion to join you.
- Always tell someone where you are going and have a check-in-safe time.
- Advise the buyer to bring identification. When you first meet, ask your buyer for identification, and take a cell phone picture of the ID and their car’s license plate. Email or text it immediately to a person you have asked to accept the safety email. If the buyer refuses, leave.
- Do not leave the title or any valuables in the car.
Test drives are often a requirement. Before you allow a buyer to take a test drive, you need to establish some ground rules. First, the person needs to show you a valid driver’s license. All parties wearing seat belts, no smoking, no texting, and obeying all traffic rules are good mandates. Talk about the duration of the test drive and the route before you leave with a buyer. If you are comfortable letting someone drive your car solo, do so. Set a specific time for the car to be back.
Before setting out, show the buyer the controls and how they work. Agree that the audio and infotainment will be sampled while parked. It’s safer, and better for both parties anyway. If you feel that taking test drives with a buyer or letting them drive your car solo doesn't work for you, sell your car ICO or to a dealer. Letting a professional car dealer drive your car solo is always OK.
Read more on Selling Your Car to a Dealer here.
What is needed to sell the car
Your state may have rules regarding a state inspection as a contingency for a sale. Most do not. As we stated above, we feel that any vehicle being sold should pass a state safety inspection.
At Car Talk we have always suggested that you have your trusted mechanic look over a used car you may be buying whenever possible. We’d be hypocrites if we now told you not to let the car you are selling be inspected by a buyer’s mechanic. Establish ground rules. Only allow an inspection after a deal is agreed to. Set an appointment and agree that the money and title will change hands following the inspection.
If your car has a warranty that is still in effect and will be transferred to the buyer, it is reasonable to decline an independent inspection.
How to get the best price for your car
There is no real secret to getting the most money for your car. Clean your car up, have it inspected ahead of time, have all of your maintenance records neatly organized, and have the car paid off in advance of your sale. Then, sell it private party.
You should be prepared to negotiate. Negotiating is not a part-time skill. If you don’t frequently buy and sell things of value, and are not adept at the basics of negotiating, don’t do it. Set a price you will be happy with and be firm. If you need a few tips, always let the buyer make an offer if it is anything but your asking price. Listen more than you talk. Leave the handshake out. One classic negotiating tactic is for a buyer (or seller) to make a final offer with an outstretched hand that is not as good as you’d like. The handshake is an instinct in our culture, and your impulse is to reach back and accept. Just don’t.
If you want to learn to negotiate, there are many online resources. One classic is a book called You Can Negotiate Anything by Herb Cohen. Read it, and you will quickly realize just how little you know about negotiating. And remember, if your buyer is actually Herb, you are not coming out ahead.
If you want to see a professional at work buying and selling cars, try the TV series, Wheeler Dealers. Mike Brewer is a used car professional who knows how to get a car deal done. Watch how he plays with a buyer or seller’s emotions and can easily reduce the price when he buys, or get the highest price when he sells. Like many things, negotiating a car deal is often done best by those with a lot of practice.
Getting paperwork in line for selling
The first step in selling your car is to deal with your lender if you have one. Start with a phone call or the online help desk to see exactly how you will obtain a title to sell the vehicle. If you already own the vehicle, you need to find or get your title ready.
Your state’s DMV is a great resource when you opt to sell a car. Each state has its own rules and expectations, so go to the state’s website and read how the process works in your state. When you sell the vehicle you “sign the title” over to the buyer. At that point it is their property. If you don’t have the title, your DMV can help you get a copy. It is not a same-day thing in most cases, so plan ahead.
Your paperwork will also include the maintenance records of the vehicle, your manuals, and any other papers that you plan to give to the buyer. Look them over. If your personal info like your social security number, home phone, credit card info, or any other such data is included, remove it.
Closing the deal and getting payment
Once the deal is done, you need to be paid. The simplest way to ensure that you get the money agreed upon is to complete the transaction at your local bank. If your buyer has cash or a cashier’s check, your local bank where you hold an account can assist you in ensuring that the funds will be immediately available to you ahead of the sale. Call your local bank for tips. They may also be available to arrange a cashier's check for your seller if they need to do so. Car Talk does not recommend accepting a personal check.
If you opt for some form of online payment, such as PayPal, be certain you know how that app works. There is no better substitute to having the cash in the bank the minute the transaction is completed. If your buyer has a story about needing to pay off another vehicle, and is suggesting anything other than you accepting immediate and full payment, find another buyer. Right now it is an historically strong sellers market. You need not compromise on best practices to get your car sold.
Dealers can provide you with a check to take to the bank. They can also help you complete the sale if you owe money to a lender. By “dealers” we mean franchised vehicle branded dealers. Do business with small, used car dealers at your own risk.
Follow your state’s DMV instructions on license plates. Do not allow the buyer to borrow them.
In some cases, a seller and a buyer will use an escrow service to conduct a vehicle sale. The escrow provider is like a third party that holds the buyer’s money temporarily until you provide the car and title. The money is then transferred to you, the seller. Our advice is to always be the one who selects and sets up the escrow account if you opt to use one. The escrow system typically works when the sale is done remotely. In 2024, the strongest seller’s market in modern history, why are you bothering? Are there no local buyers? Can’t you do the transaction at a bank? Just be sure you know how an escrow account is helping you if you opt to use one.
Cancel every subscription
The deal is done! Your buyer just drove off listening to "Super Hits Of the Seventies" on satellite radio - That you are paying for. Before you sell the car, make a note of all the subscriptions you have associated with the car and the account numbers. Once the sale is complete, cancel everything. Don’t forget your telematics system. You may be paying annually for that subscription and may be due a refund. If you have an extended warranty you are not transferring, be sure that you cancel and get a refund if the policy allows for it. Last, cancel your insurance and follow your DMV’s instructions on canceling your registration and plates.
Hey, before you go, consider donating your car instead of selling
If you own a vehicle outright and want to sell it, don’t let Car Talk talk you out of it. However there is one other option we should include in this story. You can donate your car to a charity or non-profit group. If you do, you will receive an income tax credit, help a local charitable group or nonprofit, and help someone out who needs a car.
Organizations that accept cars for donation make them safe and roadworthy and then sell them. They use the proceeds to fund their operations. One group who can help you with a donated car is Car Talk. We support NPR, our long-time partner for the classic Click and Clack radio broadcast and today’s ongoing podcast that preserves the Tom and Ray legacy. Your Local NPR station will receive the proceeds and use them to create broadcasting you can enjoy. If this is a path you wish to explore further, start with getting the estimated value of your car and then speaking to your tax professional. You can find our simple car donation instructions right here.
