Category: Cars

It has been a little while since I wrote my last post. Life has been crazy… because Lauren and I are expecting baby #3! Yes, we will be officially outnumbered at some point in the next couple weeks. Yikes!

But in addition to the craziness this new kid threw another curve ball our way: The logistics of transporting 3 kids in car seats is a lot different than just 2.

At first I entered into denial and being the frugal thinker that I am I started looking into how you can fit 3 car seats across in a sedan or small SUV. (It is possible and is absolutely something you can do if needed) But, Lauren is a little more practical in this area and I was told we needed a bigger vehicle.

I slowly came around and agreed with her that we had to get a…… VAN.

A used one of course. (Buying a new car is a crazy bad idea)

But before that, I needed to sell my car.

I really like my car. It’s a 2012 Ford Fusion, so it’s not fancy but it drives nice and is comfortable inside. I have kept it super clean too. Plus, I bought it with cash 2 years ago. So selling it feels like a financial loss to me. But sometimes doing the practical thing in life might not be the perfect thing financially.

That is okay as long as it makes sense and the practical decision does not derail your financial goals.

The point of this post is to share my experience selling my car as a private seller vs trading it to a dealer. Hopefully some of what I learned may help you the next time you are looking to change vehicles.

Everyone knows that trading a car to a dealer is generally a terrible deal. It rarely ever makes sense to do it and yet it happens all the time. I think the biggest reason is that selling a car takes work and in many cases we don’t want to do the work.

But let’s look at some math. A dealer valued my 2012 Ford Fusion at a trade in value of $5,000-$6,000. Private sales for vehicles similar to mine were around $7,500-$8,500.

That is a $2,500 difference!

I don’t know how much you make per hour but selling my car probably took me 10 hours of my time, meaning I saved about $250 per hour in the time I invested. That is a worthwhile investment. I could have traded my car in for a couple grand less but instead I dealt with the hassle of selling for 10 hours and kept that money.

That probably makes sense to most everyone reading this. But the biggest challenge for me, and I imagine for most people, is that I really didn’t know how to sell a car privately. Because of this a lot of the work I put in was simply doing research.

In order to help speed up the process for you here are the steps I followed in successfully selling my used car.

1. Do Your Homework

Search several different car sale sites for cars comparable to yours. Note the listing prices. Also look at sites like Kelley Blue Book to get a range they feel your car may be worth in a private sale.

Remember that list prices are not the final sale price. They are a starting point. If most cars like yours list for $10,000 they likely sell for closer to $9,000.

Also keep in mind that you will likely overvalue your vehicle. You will think that it is cleaner and nicer than the potential buyers will. It’s not your fault. It is human nature to overvalue what we own, but it is important to be aware of that bias when you pick a price to list your car at.

While you do your homework make note of the listings that really stand out in a good way. How are they worded? How do the pictures look? What makes them standout. Keep this in mind for later.

2. Clean Your Car

I spent 2-3 hours detailing the heck out of my car. I removed EVERYTHING and cleaned every square inch.

I invested in a soft drill brush and some upholstery/carpet cleaning spray. Together they cost around $15. The drill brush will save you when cleaning the upholstery and it was well worth the investment.

When cleaning think of every place a prospective buyer might look, inside and out, and make sure it is impeccable. Act like a buyer and go through your car as if you are assessing it for a purchase.

3. Take Awesome Pictures

I cannot stress this point enough. There are so many poorly framed, poorly lit, and poorly angled photos of items that people are trying to sell online.

Bad photos will cost you money and time. Make sure to get your car in good lighting and take pictures that are properly framed. Capture all the critical areas a buyer would want to see.

Refer back to when you did homework on other listings. Think of the best ads. The ones that really caught your eye. Take pictures that are similar to what they used in those ads and make sure that you get one great cover photo of your car.

4. Get A Vehicle History Report

I used Carfax because it seems to be the most trusted and universal history report out there. It cost me $40. Carfax is not the cheapest report out there, but I wanted something reputable that I could show to the buyer.

Every single serious prospect that called me wanted to see a vehicle history report. Most asked for a Carfax report by name.

It’s worth the cost to have it ready. It shows that you are a serious seller and not just a scammer.

Another benefit of having the report is now you have leverage in the negotiation. If your car has a great history and it is well taken care of you can highlight that in your ad and it will help you with determining the list price.

5. List Your Vehicle Online

There are several sites that you can utilize. Some are free and some cost a little. I used craigslist ($5 per listing) and Facebook marketplace. I have heard of people successfully using Offer up as well.

Refer back to your notes and write an awesome description of your vehicle. Make sure to include the make, model, year, mileage and price in the headline. Then in the body of the ad you can include all the details and features.

Don’t leave out any of the great features your car has. You can search for your vehicle and trim level online to get a full list if needed.

Also list things that you like about the car that may be relevant. For me I specifically noted the large trunk and that I can fit 2+ sets of golf clubs in there.

Make sure to note if the car is smoking or non smoking, has had or not had pets in it, and if kids ride in the car. Those things can make a big difference for perspective buyers so it’s important to note them and to price accordingly. If your car has any damage outside of normal wear and tear make sure to note that as well.

My car had a small superficial crack in the front plastic bumper. I had a close up photo of it and noted it in the body of my ad. I didn’t highlight it, but I was open and honest about it. It’s better to be honest up front then to meet someone face to face and have them feeling misled by your ad.

Relist your ad

You will likely not sell your car immediately. It will probably take a few weeks even if it is priced properly. You want your car to show up at the top of search results so relist it every 10 days or so.

I relisted mine 2 times before it sold.

To be fair I originally priced my car at $8500 which was the top of fair value. I knew it was a long shot but I figured why not try?

I gave it 10 days and then relisted it at $7950.

6. Handling Calls & Emails Inquiring About Your Ad

I won’t sugar coat it, this was the worst part of the process. You will get a bunch of spamy messages and maybe even calls. Some are scams.

Most of these came within 48 hours of listing my ad and most were obviously sales pitches or scams.

I simply did not respond to them.

I did have one person who acted interested and even set an appointment, but then they asked me to get a vehicle history report and they sent me a link for where I should get it.

That was a red flag for me, so I did a little research and quickly found that to be a scam.

BUT, if you use some common sense there is nothing to worry about and after a couple days the spam dropped off.

Next came the real calls. Some of them were individuals simply looking for a crazy good deal. They usually asked a few questions and then immediately started asking for me to give them a bargain price.

Honestly if I had been in a desperate spot and needed to sell fast I could have gotten about $1000 more than trade in by selling to one of those prospective buyers. I was not desperate, so I waited and kindly turned them down.

I had other calls where we discussed the car and the list price and it wasn’t the right fit for the possible buyer.

I probably took 6 or so “real” calls before I found the eventual buyer.

7. The Negotiation

In my case the negotiation took place over the phone and not in person. This could go either way, but in most cases a buyer doesn’t want to commit to driving out to see your car unless they know they can get a price that is reasonable.

I went into the call with a plan. (Make sure you have a plan in place before you start getting calls. Know your bottom line price.) I knew my bottom line price was $7500. My car has a crack in the bumper but otherwise it was clean. $7500 was the low end of the range that my car generally sells for, but given the bumper crack I knew I would possibly end up near that price.

The prospective buyer asked about the vehicle history, if anyone had smoked in the car, and why I was selling it. I was prepared for each of those questions. She asked for a Carfax report and I quickly sent it over for her to reference.

She said that they liked the vehicle a lot and wanted to buy it but the price was a little high for them. I told her that I was comfortable coming to an agreement on price.

She offered $7000.

Negotiation tip: Always try to get the other person to give you their price first. This way you know if they are serious, but also it puts you in the driver’s seat of the negotiation.

Many buyers are savvy negotiators and they will ask you for your best price before they tell you what they will offer. They want you to lower the price so that when they put a value on the table they have already worked your price down.

Try not to fall into that trap. When asked for my best price I simply said that based on the vehicle condition and comparable sales I felt that the list price was fair, but that I was comfortable negotiating if they had a different price in mind.

Okay, so she offered $7000 which is much lower than my ask. So I went back to highlighting why the car was a great value at my list price.

I talked about the clean title history, the fact that I owned the car outright so there was no lien to deal with, and the comparable sales research I had done. I highlighted that the car was smoke and pet free and super clean inside.

I didn’t drone on with details, but I succinctly highlighted all of the best things about the car.

I told her that I was happy to reach an agreed price but that she would need to be much closer to the list price.

She countered at $7200 and at that point I said that we were likely too far away in price to reach a deal. I explained that the car was already a great value at the list price and if she changed her mind to let me know.

She was clearly disappointed but she said the list price was too much.

I made sure to highlight that I was happy to work with her on price but it would need to be closer to my list price and we ended the call.

Sometimes its okay to not reach a deal. Sometimes you will never hear from them again. BUT SOMETIMES…

They call back a few hours later.

That is when I knew she really wanted the car.

She then told me the absolute best she could do was $7400. She had a loan for $7000 and she was scraping together the rest and she could pay me in cash. Honestly I don’t know if all of that was true but I think it was.

I said that the lowest I would take is $7600. At this point I knew she was a very serious buyer and I wanted to make sure that we closed on a deal if at all possible.

She said that she couldn’t do it and we almost ended the call again because I held firm. Right before the call ended she said she could find $100 more if it would complete the sale.

I agreed to sell the car for $7500 which was my bottom line price.

I could have held out for more from another buyer but I don’t know for sure if that would have worked out. I could have pushed her for another couple hundred dollars and she might have made it happen. But in the end it felt like a fair deal. Both parties gave up a little.

The big takeaways I want to convey is that before you take any calls: have a plan, be confident in your pricing, always circle back to what makes your car a good buy, and do what you can to let the other party put values on the table before you do.

No negotiation is perfect, but knowing how you want to approach it before hand gives you a big advantage and takes off a lot of the stress.

8. The Sale

This part was probably the most stressful for me. I have never signed over a title to another party or filled out a bill of sale. I did all the research on it to make sure I did it right, but it was still a little intimidating.

One thing I did that I would do differently is that I went to the sale alone.

Having a friend or family member there would be great. If nothing else then to have a second set of eyes and someone for morale support.

In this case the buyer sent her son and a friend to complete the sale. I gave them the address to a local coffee shop where we met.

I was very intent on not meeting at my home. This is a personal preference thing, but from a safety perspective I didn’t want to make a large cash transaction with a stranger in my driveway.

The location worked out great. The buyer was very friendly. He looked over the car, checked the engine, and took it for a spin around the block.

Another personal safety preference, but I did not ride with him while he test drove it.

It might sound crazy but I prefer not to be kidnapped and if the guy stole my car… well insurance would have paid me for it and I was standing next to his friend/car so I would have easily been able to report him to the cops.

Once he was done he was ready to buy. We had both printed out a bill of sale form from our state DMV website. We both filled out the form and a copy and then took pictures of it and validated the other person’s photo id.

That might have been overkill but I wanted to feel 100% confident in the sale.

I then signed the title over to him and he gave me the cash.

My sale was cash which is preferable. Based on what I have read you do not want to accept cashiers checks because so many are fake. Had the deal not been in cash I would have insisted that we do it at a bank. That way they could have assisted in ensuring that the financials were all valid.

Doing the sale at a bank may also be needed if there are liens or loans to work through.

After the sale I reported everything online to my state DMV. They also recommended removing the plates before finalizing the sale, but I forgot to do that. It hasn’t seemed to be an issue at this point.

Conclusion

Hopefully my experience helps you all when you are ready to sell a car. Like I shared it was my first time attempting it and it was a bit intimidating to tackle at first. But I did all the research up front and for about $2500 more than the trade in price it was well worth it.

For me doing the research and feeling confident in my process was key. It took the stress out of a lot of it.

The bottom line is that you can save yourself a few thousand dollars in many cases by selling privately. Those types of values are worth the inconvenience. Take those extra steps and gain the confidence to try it.

I am glad I did it and I would do it again, but hopefully my current cars will run well for a very long time so that I won’t have to.

Time to go enjoy my van. Haha.

Most of us believe car payments are a necessity. The logic goes something like, “Well I need safe transportation to get to work and to transport my family and it’s impossible to save up for a good reliable car”. Then we justify purchasing a car with a loan at 5% if it’s a new car and almost double that for a used car. (Check out my previous post about why you should never buy a new car.)

This thought process is so ingrained we have racked up over $1.1 TRILLION dollars in current auto loan debt as a society. And this equates to us paying on average somewhere between $350 – $515 per month in payments per car. If you are a two-car household you are now talking about $700 – $1030 in car payments every month! Wow!

A good chunk of that payment is interest. (I am going to make some assumptions here to paint the picture) We are talking over $3000 in interest over the course of a 5 year loan for a middle tier used car purchase. Again, we need to double this if the house has 2 cars, that so it’s actually $6000. (I’m not even counting 3+ car households, Boats, RVs etc.) And that’s if you bought middle tier used cars and only borrow for 5 years. Lots of us spring for the bigger better car and longer loan terms.

So every 5 years all of us 2 car families are likely willfully giving up at least $6000 dollars just for the pleasure of borrowing to buy a car/suv/truck. SIX GRAND! That’s a lot of money and it’s a lot of stress to make the payments each month.

I can hear some of you now saying that you got 0% interest on your loan and you will have it all paid off before the cutoff date. Dealers don’t give out 0% loans because they like us, they do it because they know most of us won’t pay it off early and we will get gouged on the back end of that deal. The statistics and lender profit margins back this up. There is a better way.

When Lauren and I got married we were lucky enough to have 2 cars from our parents. Now they weren’t the coolest cars… Mine may have been a 1996 Ford Taurus, that was purple, and leaked oil. But it was free and I learned a lot about fixing cars. We took great care of them and drove them until they literally couldn’t start anymore.

While we were driving our out of date old cars we were putting away a “car payment” each month. This payment did not require interest, in fact it was deposited into a high yield account so we got paid interest. When our cars died we went to get a car, took money out of the car account and paid CASH. No loan, no interest, no stress, just a paid for we fully own it car. If we could figure this out and make it happen You can too.

If you have paid for cars or you are close start doing this right now: Take $250 or whatever amount you want to spend each month and put it into a high yield saving account like a money market. Set it up to automatically withdraw from your checking and factor it into your budget. Several online banks have no fee, no minimum accounts that pay 2% or so where you can deposit the money. (This is super easy to set up online so don’t use that as an excuse.) In 5 years if you put in $250 per month you will have almost $16,000. And roughly $1000 of that will be interest paid to you. $16,000 can buy a very nice used car/suv and if you want more bump up the savings per month.

Instead of you paying $3000 in interest per car every 5 years you are now saving that and getting $1000 in interest paid to you. $3000 saved plus $1000 earned equals $4000 that you are better off. And once again if you are a two-car family that is an $8000 difference every 5 years. Also, did you catch it??? Your car payment per car is in this example is $250 per month NOT the sometimes $500 we talked about earlier. So you have a: Smaller car payment, an $8000 turnaround, and Cash to buy your next car. Seems like a no brainer.

Maybe you are reading this and saying, “But I just bought a new car on a loan… or I already have a big loan that is more than my car is worth.” It’s okay, there is a plan. The best is to go after the loan with everything you have. (Check out the post on the debt snowball if you haven’t already) Get that paid off as fast as possible and then start this saving method for your next car. Drive your current car as long as you can while it is paid off to get the best result. In some cases you could sell your current car and “downsize” into a paid for car. That isn’t always an option because you could be upside down on your loan, but in some cases it works.

My goal today is to show you that car loans aren’t a necessity. That by taking out car loans we are trading thousands of dollars  to a bank for the ability to buy on a loan. If you want to win with your money car purchases and loans are a really good place to start in terms of changing philosophy/strategy. Most of the people I have worked with who are really struggling financially are struggling the most with credit cards and car loans. There is a better way, choose to do things differently and go after it.

If you are struggling and need help in this area reach out to me via messenger or in the comments. Who out there has turned their financial lives around by buying cars with cash? How did you break the cycle? Or how did you stop the cycle from ever starting in the first place?