Thursday, January 7, 2010

Volume 3, Number 23: Used Car Sales Tips

(Note: I originally posted this entry on July 29, 2008, on my Yahoo! GeoCities blog.)
As you know, I recently bought a 2002 Pontiac Grand Prix (and am very happy with it, thank you). I found that car on Craigslist; in fact, I had been checking the local Craigslist used car listings every day. I still do, from time to time, just out of curiosity (just to see the deals that would have been available to me if the problems I had with the Ford hadn't occurred until now). However, I find that some sellers just don't follow a few important rules (note: thankfully, the guy who sold me the Pontiac did):
  1. Spelling and grammar matter. It turns me off when someone uses "breaks" instead of "brakes," or "transmition" for "transmission." If the seller can't use proper spelling and grammar, how would I know if they're smart enough to handle their end of the transaction? This also applies to misspellings of certain car models (for example, I've seen "Cavalier" spelled as "Cavilier", and "Brougham" spelled as "Broham"--darnit, you've been driving the car for so long, you should know how it's spelled).
  2. Don't hold any important details back--even negative details such as high mileage or mechanical problems. When I see a newer car being sold at what a price I find reasonable, and I check the listing and it doesn't mention the mileage, I scoff, "Must have a lot of miles on it" and move on to the next listing that interests me. Or when someone says, "The body and interior are in great shape," but doesn't mention anything about the car's mechanical condition, I might imagine it that car to be a "mechanic's special" (read: needs lots of mechanical repair). Even something as seemingly minor as the trim level (the two or three letters that usually come after the name of the car) can affect the sales price (for example, a 2007 Chevy Cobalt LT has more standard equipment than a Cobalt LS, so all other things considered equal, the LT should sell for a higher price). Another thing--list the options that came with the car. Each option is a minor selling point (as long as you don't use them to overinflate the car's price; for more details, see point 3, "Price your car reasonably").
  3. Price your car reasonably. I know it sounds obvious, but there are some people in this world who seem to think they can sell a car for more than it's worth. For example, as I write this, some yutz on Craigslist is trying to sell a '94 Ford Thunderbird with 136,000 miles on it for $2,800. Just to clarify things, a few different pricing experts, such as Kelley Blue Book and Edmunds, use three different values for pricing cars. An explanation of each value follows:

Trade-in value: What you should expect a dealer to pay you if you were to trade your car in to that dealer for another car
Private party value: What you should expect to get if you're an individual selling your car to another individual, or what you should expect to pay if you're an individual buying one from another individual
Dealer retail value: What you should expect to pay a dealer if you were to buy a car from that dealer

Now. The whole idea behind "private party" transactions--allowing individuals to sell used cars--to other individuals is eliminating "the middleman"--the dealer. In an ideal "private party" transaction, the seller would make more money in a "private party" transaction than they would by trading it in to the dealer; the buyer would save money compared to buying the same car from a dealer.

Therefore, if you're an individual looking to sell to another individual, you should always check the "private party" value and set the sales price for around that value, maybe a little higher (to compensate for the time you spend dealing with all those potential buyers). But if you're trying to sell an older car for $3000 and my research on says it's not even worth $2000, you won't get my attention--at least not until you lower the darn price. Going back to that '94 T-Bird--even if the seller was a dealer and the T-Bird had every option available, it wouldn't fetch more than $1700; thing is, the seller is not a dealer and shouldn't even expect $1000 for it.

One more thing--even before listing the car, I hope that you, as the seller, have a clear title. I realize that this is true in almost all cases. But nine years ago, I came across one seller who still owed money on the car (I talked about it in more detail in this 2007 blog entry). He had this idea where I'd give him the money, he'd clear the title, and he'd send me the title in the mail. However, in that scenario, he could have then turned around and reported the car stolen.

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