When Selling Your Car Yourself is Not a Good Idea
November 10th, 2017
If you’ve been thinking about whether or not selling your car yourself makes sense, there are lots of arguments for it and against it. We’ve approached this question in two different ways: One way is to consider when it is a good idea and the other way is to consider when it is not a good idea. You can read about the first way in our article about when it is a good idea to sell your car yourself. But if you want to know when selling your car yourself is not a good idea, then this is the article for you. We’ll cover ten different tips that will help you decide right now if you should sell your car yourself privately.
1. If the Most Important Thing is Selling Fast, Selling Your Car Yourself may not be the Best Approach
When it comes to letting go of your car, sometimes the most important thing is to sell your car fast. But the industry average for selling a used car is 60 days. Knowing that piece of information, you then have to ask yourself this question: Are you going to be able to significantly beat the industry average established by professionals who know all the ins and outs of moving cars as quickly as possible? Maybe you’ve got the time, skills and expertise to make it happen. And yes, you might even get lucky and sell your car in a matter of hours or days. But if time really is of the essence to you, do you want to leave it to chance? It could end up taking you 4-8 weeks to sell your car.
There are various reasons why selling your car as quickly as possible becomes the primary goal. The one we see the most is when a person is moving a long distance, such as to a different region where they need a different kind of car, or are moving out of the country. Another reason is when you realize you’ve bought a car you cannot afford. The general rule of thumb is that all your monthly car expenses, including loan payments, maintenance and auto insurance shouldn’t exceed 15-18% of your monthly income. When you bought your current vehicle, maybe you were just within that range, but then something changed. Maybe you were just laid off. Maybe you had to switch jobs and your new job pays less. Maybe you’ve had a health crisis and are facing significant medical bills. Whatever the reason, when life intervenes and you can no longer afford your car, you need to sell it as quickly as possible.
The problem, however, is that people tend to have overly optimistic expectations about how long it’s going to take them to sell a car. This is just part of being human – we tend to downplay potential negative outcomes in favor of hoping for positive outcomes. When you don’t get lucky and the time it takes to sell your car yourself drags on and on, it can be a very frustrating and stressful experience.
If you bought the car new from a dealership, you can back and see if they will let you exchange it for a less expensive model. But if you’re “upside down” on the car loan, meaning the car is worth less than you owe on it, you’ll still have to pay the dealer the difference. New cars depreciate very quickly in the first year or two, and a car you bought for $25,000 might only be worth $18,000 now, but you still owe a lot more than that on it. Selling your car to a dealership is always much faster than selling your car yourself, but it might not make financial sense.
If the speed of selling your car is not important, you might want to put the time and effort into selling it yourself. Next up, you have to think about the money aspect of the decision.
2. When You’re Less Concerned About the Money You Get
If speed is more of concern, you probably don’t want to take the chance of a slow sale by trying to sell your car yourself privately. And hopefully the amount of money you get for the car is less of a concern because trading it in or selling it to a dealership both tend to result in less money in your pocket than selling privately. To confirm this, all you have to do is go online and look at what your car is worth by using the Kelly Blue Book Value or the Edmunds True Market Value. These sites allow you to put in key information about your vehicle and will then give you a range of what your car could fetch in your area if you sell it privately or trade it in at a dealership. The trade-in option will typically be the low end of the range, and a private sale on the high end of the range, although there’s still no guarantee you’ll get the price you want when selling your car yourself. There are, however, things you can do to increase what you get. If this is your primary concern, see our guide on how to get more money for your car in 5 easy steps.
While speed and price are important aspects of the decision to sell your car yourself or not, there are many other factors to consider, such as whether or not your car is paid off.
3. When Your Car is not Paid Off
Selling your car yourself privately becomes significantly more complex and time-consuming if you’re still making car payments. The more you still owe on your vehicle, the harder it’s going to be to sell your car privately in a reasonable amount of time.
If you still owe a substantial amount on your car, this means you won’t have the title. The lender holds onto the title as long as you still have payments to make. For many private buyers, this in and of itself is enough of a red flag that many won’t be interested in taking a closer look at your vehicle, which means the time it takes to sell your car yourself might take a lot longer than you’re willing to wait.
The other issue is that if private buyers are interested in your car but they need to get a car loan themselves to be able to buy it, many lenders won’t approve their loan application unless the title is held by you, the current owner, “free and clear.” Once again it just complicates the entire process and makes it take longer.
The mistake many people make when trying to sell a car privately that they still owe money on is to assume they should set the price of the car based on the outstanding balance that they owe on it. It seems logical, right? After all, you want to get enough money for the car to pay off that outstanding balance. But that outstanding balance on the car loan actually has nothing to do with what your car is worth. If you owe more money than the car is worth, setting the price based on the outstanding balance of the loan means you’ll be setting a price that is too high, and people won’t be interested in buying your car. We’ve also seen people put a price on a car that’s too low in this scenario, but that is far less common.
If you are still making payments for your car and your goal is to sell your car yourself, check out our guide on how to sell your car if it is not paid off.
Whether your car is paid off or not, another major factor affecting your decision to try selling your car yourself is what kind of vehicle you have to begin with.
4. When Nobody is Interested in Your Kind of Car
When you’re trying to decide if it’s a good idea to sell your car yourself, it helps to know if you have a high-demand make/model or a car nobody’s interested in. For example, nobody wants your Saturn since the company went out of business, making parts and repairs increasingly difficult as time goes on. Saab and Jaguar are often avoided because people think they’re expensive to maintain and repair over time. Not surprisingly, the all-wheel-drive Subaru Outback doesn’t do well in San Diego but is the most popular car in the Northwest (Washington and Oregon), where people have to deal with snow.
Taking a look at what makes/models are hot is interesting. Check out this map from Business Insider of The best-selling vehicle in every US state. As most people know, the Ford F-150 dominates much of the country, especially the middle states. In California, Honda is the hot make and the Civic is the hot model. This does change over time. Just a few years back, it was the Honda Accord that was on top in California (it’s now second). As far as cars in California, following Honda are three from Toyota: Corolla, Camry, and Prius, in that order by how many were registered last year. The hottest makes and models of new vehicles is important information to know because they also usually end up being the best-selling used cars as well.
While the make and model play a key role in how easy or hard it’s going to be to sell your car yourself, the condition of your vehicle is also very important.
5. When Your Car is in Poor Condition
Take a long, hard look at your car. What kind of shape is it in? Does it have major problems, whether mechanical or cosmetic or both? Be honest. If it turns out what you’ve got is essentially a piece of junk, you might have to give up on the idea of selling it altogether, whether privately or to a dealer. The one exception to this is the occasional dealership offer to give you a flat fee for your trade-in ($4,000 seems to be the popular amount these days) whether you “push it, pull it or tow it” to their lot. Then again, there are many who say these deals cannot be trusted. The caveat they don’t tell you about is that you do have to buy your next car from them, and they will not let you negotiate on the price. It often turns out that the price of the new car is significantly marked up – enough to basically erase that guaranteed trade-in amount they offered. It’s very sneaky, right? This is one way that less-than-scrupulous dealerships reel in uninformed buyers – and it’s totally legal. Any offer from a dealership that includes words like “purchase price is non-negotiable” is a huge red flag. Investigate these kinds of deals carefully before accepting!
If your car is in truly bad shape, you might be better off just “unloading” it rather than trying to sell it. You could donate it to a charity that accepts car donations for a small tax write-off, or you could sell it to a junkyard that buys old cars for scrap metal. There are a limited number of potential private buyers who might be interested in the vehicle for parts, but you have to ask yourself if the private selling process is worth the time and effort it takes.
Given what you’ve read so far, you might be wondering why anyone ever does a trade-in when they’re looking to sell a car. There are some instances in which it makes sense.
6. When a Trade-in is Your Better Option
Because most people who are selling a car want to get the most money as possible for it, trading it in rarely makes sense. If you have the time and fortitude to try selling your car yourself privately, you might pocket significantly more money. And if you do still need to buy another car, you’ve got more to put towards it than you would probably get from most dealerships.
This is not always the case, though. One potential exception is when you have one of those best-selling makes/models of cars mentioned above. If you’ve got a hot model that’s in great shape, has been kept clean, and has low mileage, some dealerships will want the car badly enough that they will offer you a lot more on a trade-in than you would have thought. In these cases, a good dealership might even give you as much as you could get from a private buyer. If you’ve got a “best-seller” and are planning on getting another vehicle, it might make sense to check in at a few dealerships to see what they would offer you for a trade-in value.
Whether you’re going to sell your car yourself or trade it in at a dealership, there are a number of things any potential buyer wants to see that you should track down and have on hand.
7. When You’re Lacking Certain Items Private Buyers Want
When private buyers are looking through car ads online, many of them adopt a practice of looking for what’s missing as a way of quickly eliminating cars. The savvy private buyer wants to see that you have certain items before they will even consider taking a closer look at your car. The items you really want to have readily available include the following:
All Keys. Buyers want to know that you have the spare set of keys, or a valet key if there was one, and any remotes and things like that. Missing keys is a red flag for most buyers.
Owners Manual. The more original documentation you have from when the car was new, the better. At a minimum you should have the owner’s manual. Buyers don’t like it when this basic documentation is missing.
Maintenance Records. Buyers want to know if the vehicle was regularly serviced and what kinds of other repairs have been made on it. When these records are spotty or completely absent, buyers get nervous because they don’t know for sure what they’re getting. It is totally worth your while to track down as much of this documentation as possible.
Vehicle History Report. A good vehicle history report from Carfax or AutoCheck will cost $25-$40, but the peace of mind it gives buyers is very much worth the small investment. As with missing maintenance and repair records, the lack of a vehicle history report makes buyers nervous.
Smog Check. A car that is less than four years old and is already registered in California doesn’t need a smog check. Otherwise, getting one done makes buyers happy.
Title. If you’re supposed to have the title and you can’t find it, Apply for a Duplicate California Certificate of Title.
Paperwork. In the State of California, you need two forms to sell your car yourself: One is a combined Bill of Sale, odometer disclosure and power of attorney called Vehicle/Vessel Transfer and Reassignment Form REG 262, which you have to get from the DMV because it has to be printed on security paper due to federal regulations. The other form is the Notice of Transfer and Release of Liability, which you can fill out online.
Although missing one or a few of the above items doesn’t mean you’ll never be able to sell your car yourself privately, lacking them means the selling process might take longer as lots of buyers will pass you over. The timing of when you try selling your car yourself is also important.
8. When the Time of Year is All Wrong
This is either a major or minor aspect of trying to sell your car yourself privately depending on where you’re at in the country and what you are offering. It would obviously be a bad idea to try and sell a convertible during the winter if you live in a place that gets major amounts of snow. In San Diego, seasonal weather isn’t really a factor. Visitors to San Diego are always surprised how little time the local news stations give to the weather, but it just doesn’t take long to say “Sunny and 70s yet again.”
There are times of the year that are better to sell a car than others. Good times to sell are when people are getting their tax refunds, or when parents are looking to buy something for a child who is graduating from school. In general, car prices rise during the spring and summer and fall a bit during the fall and winter. For whatever reason, a lot of people trade up to newer models in March and September, which means there is more competition in the used car markets as their old vehicles come into the market. These concerns about the time of year, however, are minor in comparison to the other factors we cover in this article.
Another thing that should prevent you from trying to sell your car yourself is if you’re simply not able to write a killer ad.
9. When You Have No Idea How to Write a Great Ad
One of the most important aspects of successfully selling your car yourself privately is crafting an ad that will help catch the eye of potential buyers. If you can’t write a great ad, you shouldn’t bother trying to sell your car yourself because you’ll just end up frustrated at how long it is taking. Writing a good ad takes a little bit of skill, a bit more time, and patience to get it right. Here’s an example of an ad from the San Diego Craigslist website that is not going to help sell the car in question:
Title: 03 HONDA CIVIC 1 OWNER LOW MILES
03 CIVIC, CLEAN TITLE, SMOGGED, 143K. RUNS EXCELLENT. A/C COLD, NO ISSUES
There are aspects of this ad that seem good at first, but that don’t hold up when you think about it. The first big mistake in this ad is USING ALL CAPS. It’s very annoying, and many buyers won’t even look at an ad with a title in all caps – it makes people feel like they’re being yelled at, and nobody likes that. In a craigslist ad, you have 70 characters (with spaces) available for you title, but this one only uses 33. However, if you use all 70 and put it in all caps, the full title will not display. People need to be smarter about this. The title does not include the trim style, which it should. The best way to do this is following this format: Year, Make, Model, Trim, other information: 2003 Honda Civic EX. What you add after that might be particular options or other unique selling points.
This seller chose to highlight that it is a one-owner car, which is a great choice. But then the title mentions low miles. The car has 143,000 miles on it. I don’t know of many buyers who would consider that low mileage. The body of the ad is also in all caps, which is just a big no-no. It does mention a few good things – clean title, current smog check, runs excellent, cold a/c. But then it says NO ISSUES. Really? This is a 14-year-old car, so that’s a little hard to believe. Maybe if it were backed up by more good information not in all caps, buyers might be more willing to believe it. There were 10 photos included, and they were pretty good, but more would have been better, especially considering the age of this car. While this isn’t the worst car ad I’ve seen, it’s still pretty bad. If you can’t do better than this, you should probably rethink your desire to sell your car privately.
The final factor you need to consider is how nervous you are about getting scammed.
10. When You’re Nervous About Getting Scammed
It’s disturbing to see all the various ways criminal posing as legitimate buyers try to scam people out of their car without paying for it. The oldest tricks in the book are handing over fake payments, whether that is in the form of counterfeit cash, a bad personal check, or a fake cashier’s check (surprisingly easy to do). Then there are those who will set up a test-drive appointment and either convince you to let them drive solo, or just shove you out of the car and take off, never to be seen again. Then there are the offers that come from overseas. A buyer will offer you more than your asking price if you’ll ship the car and accept a money order from their country. Then there are those who are from outside your region and offer to wire the money or use PayPal, only to cancel the transfer after taking your vehicle. And that’s not to mention the more sinister types who will attack you and hurt you. It’s a tangled web these scammers weave, but there are things you can do to protect yourself. See our article on how to limit your risk when selling your car privately for important tips to stay away from scams.
There is a Better Way!
If reading this article has helped you realize that selling your car yourself is not a good idea, you’ve got options, and you don’t have to settle for a low trade-in value from a dealership, either. Sell your car to Driveo! Our goal is to get you the most cash for your car without the stress of selling it yourself. You can fill out a short form on our website with information about your car and get a quote in minutes that is good for 30 days. If you like what you see, you can cruise in and cash out in very little time because we handle all the paperwork for you. We’ll even give you a ride to anywhere in San Diego County!