Tips

Selling Your Car

November 22, 2016

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Red Sedan Car

If the time has come to sell your car, you’ll typically have a number of options open to you in terms of sales channels.

Each of these will have its own characteristics and some may be more suitable for your particular situation that others.  As your exact circumstances aren’t known, do please remember that what follows is just a very general list of observations and not a recommendation.

Selling privately

You can advertise your car on the internet or in classified ads, targeting the private buyer.

The big advantage here is that, typically, the price you finally get may be higher than what a dealer would pay for it.  On the downside:

  • you may have some delays in finding a buyer and need to take out a number of advertisements;
  • unless you’re a business, you probably won’t be able to accept plastic by way of payment. You should be exceptionally cautious about cheques (even so-called “banker’s drafts”) and never part with your vehicle until your bank confirms that the cheque has irrevocably cleared. That may lead to delays;
  • you may have little alternative other than to deal in cash but remember that can be dangerous too. Never exchange your car for cash in quiet locations;
  • remember, when meeting a potential buyer, to attend to your personal security. This is particularly important for unaccompanied females. Also, don’t allow someone to ‘borrow’ your car for a test drive unless you and a friend of some stature accompany them.

Selling to a dealer

This has a number of attractions.

Most dealers will be trustworthy and some of the above need for caution won’t apply. It might also be relatively fast to find an offer.

Against that, you’ll need to anticipate a very probably poor final price. Dealers will be looking to make a profit on your car via re-sale. So, if your vehicle has a realistic market price of say ‘X’, expect to get dealer offers that are ‘X’ minus a substantial percentage.

Part exchange

A slight variation on the dealer route is part exchange or as it’s sometimes called;   “p/x”.

This involves a dealer offering you a price for your existing car, which is then deducted from the price of another vehicle you’re about to purchase from them.

Once again, it has the advantage of speed and security. It’s less pleasing aspects through potentially are:

  • it assumes you want to buy another car – and from the dealer such as a Honda Civic.
  • the chances are, elements of the price you’re being offered will be ‘recovered’ via an increase in the price of the car you’re buying.

Car auctions

This might involve you selling your car to the highest bidder, be they a private individual or a dealer.

The format should be familiar to many. It basically involves you putting your car up for inspection by anyone who so wishes, then they’ll decide if and how much they wish to bid for it. You can protect your interests by using things such as reserves and minimum start prices.

Vehicles sold like this can move quickly but you’ll need to offer an ‘incentive’ to bidders. That usually involves starting the bidding on your car at a level below its market value to get people interested. Remember, professional buyers buy at auctions because they’re looking for ‘bargains’ and not the same prices they can find elsewhere.

That’s also a risk because auction prices are typically low and remember, if you’re using an auction company, they will take a percentage of your sales price.

So, this can be good for a quick and secure sale but less so if you’re hoping for the best price possible.

Summary

If you’re looking to sell your car to help fund the purchase a new (or newer) one, your highest income probability is likely to be through the personal sales route.

If the risk of potential delays there are a worry, you could speak with a car finance broker who might be able to set up car finance for your new purchase without the need for a deposit.

That might enable you to take the time to sell your old vehicle for the price you really think it’s worth.