Selling your used car can be stressful. On the one hand, you can write an ad, invite strangers to your home and lose weeks of time trying to sell the car. On the other hand, you can visit a dealership and sit through hours of haggling and high-pressure sales tactics, wondering whether you are being taken advantage of.
The market is responding to these stresses, however. Wholesale dealers, such as CarMax, will make written offers. And car owners can acquire accurate knowledge about a car's true worth online, reducing the need for haggling with a dealer. If you follow these simple steps, the stress of selling a used car can be dramatically reduced.
Joe Lescota, director of dealer development for the National Independent Auto Dealers Association, says: "Prior to the Internet, to get information on the value of their car, consumers were pretty much forced to go to the dealership. This created a sense of animosity or an adversary role between the dealer and the consumer."
With the rise of online pricing guides that can be updated at the speed of light, car owners can increase their knowledge and, with it, their power. Lescota says: "Now the consumer has as much information as the dealer does. The playing field is being equalized. It's about education, not combativeness."
Philip Reed, senior consumer advice editor at Edmunds.com, says: "Consumers have a tendency to mistake the true value of their car. People throw out a figure based on what they bought it for years ago that may not have any relationship to the market." Therefore, the first thing car owners should do is go online to determine the condition and value of their used car.
As the value of a car can drop about $1,500 per condition level, it is important to make an honest determination. For example, Alec Gutierrez, senior market analyst for automotive insights at Kelley Blue Book, says only 3 to 4 percent of cars qualify as "excellent." Although the details may vary by guide, car owners should take the time to study several guides to get a sense of their car's worth.
Only after determining your car's worth should you approach a wholesaler such as CarMax or a company such as AutoTrader. Wholesalers are a great option for a seller looking to get rid of his car quickly and conveniently. After an inspection of your car, a place like CarMax will make a written offer good for seven days with no haggling.
Similarly, Gutierrez says AutoTrader will give you a guaranteed offer that will be met by a number of dealers across the country. Or, Reed says, "you can then ask if a dealer can meet or beat that offer. It's a way to push aside many of the ways a (dealer) may attempt to work the customer."
And trading in a used car to a dealer might be a great option for two reasons. First, doing a trade-in can create financial benefits. "Depending on where you live, in many states, a trade-in will reduce (your) tax burden on the purchase of a new car," Lescota says. Instead of paying the tax on the price of your new car, some states allow you to pay sales tax only on the difference between the price of a new car and the value of the trade-in, creating "substantial tax relief" that will also have positive effects when it comes to loan structuring.
Secondly, now is a particularly good time to trade in a used car to a dealer because there is a dearth of used cars. Not only are cars lasting longer, Lescota says, but also during the recent recession fewer people bought new cars and fewer people traded in used cars. People who own relatively new cars in good condition might see a bump in the offers a dealer will make for a used car.
"It used to be that people would assess their tolerance for pain when deciding how to get rid of a used car," Gutierrez says. But thanks to the rise of online resources, customers have never been in a better position to decide how to sell their used cars, to whom and for how much. With less haggling and quicker sales, the customer is in control. And nothing eases stress like control.