Paycheck Chronicles

Get The Most When Selling Your Car


Military folks often sell cars:  a cross-country PCS move where you don't want to drive two cars, a move overseas, a move back to the US from oversea, or just the usual, we need a different car for some reason, sales.

Selling a car can be more complicated that it appears, and most of us want to get the highest possible sales price.  In their article, 6 Ways to Get More Cash For Your Car, USAA identifies some key ways to increase your sales price.  I've had a little bit of experience in car selling, so I've got some thoughts, too.

Make It Look Great

USAA says:
To make your vehicle more attractive to potential buyers, spiff it up.  Automotive expert Lauren Fix, known as The Car Coach®, compares the process to staging a home for the real estate market. People often clear countertops, clean closets and rearrange furniture to showcase their homes. "Stage your car as well," Fix says. "Clean the floor mats, the stains on the cushions and the engine." Many car wash centers offer detailing services that can make gently used cars look practically new, inside and out.
This seems pretty obvious to me, except for the engine part.  Do people really want a clean engine?  Maybe it is a guy thing... A thorough cleaning is particularly important if you have pets, as most of us can't smell the pet odors in our house or car.

 Only Fix What Makes Financial Sense

USAA says:
As you evaluate the car's condition, think about:
  • Easy cosmetic changes, such as touching up paint, repairing dents and fixing windshield chips or cracks. For hail damage and other minor dings, so-called "painless dent repair" services can be far less expensive than replacing complete parts.
  • Mechanical tuneups. Have a certified mechanic inspect the vehicle for must-do fixes. It may be worth replacing an aging brake system to attract a buyer, for example, but don't sink so much into repairs that it eats into the profit you're seeking.
If you do have significant repairs made, keep the records to show potential buyers that certain parts of the car are running like new.
Keep in mind that the expectations for maintenance are going to be dramatically different based upon your price point.  If you've got an upscale, newer car, most buyers are going to be looking for near-perfection.  That overseas beater?  I wouldn't put one cent into repairs unless they involve the safe operation of the vehicle.

This is a constant struggle for me.  My current vehicle is a 2004 Prius with over 160,000 miles on it.  I paid around $3,000 USD for the car, and I've driven it hard for the last few years.  It is my thought that there is little value in fixing that little scrape on my rear quarter panel.  My local body shop quoted me about $900 for a full, proper repair.  I'm not sure whether I'm right, but I do know that it is about balance.

Know What It's Really Worth

USAA says:
To price your car correctly, find out its current value and be realistic about its condition. Sites such as Kelly (sic) Blue and the National Automobile Dealers Association help you calculate your car's market value to dealers and individual buyers. The more quality sources you use, the better you can feel about how much you trade-in or sell your vehicle for, says Steven Thompson, vice president at USAA Bank

When using these sites, be sure to factor in the vehicle's mileage, options, interior condition and any exterior damage. This will help you get a more accurate estimate of its worth.

This is definitely good information when you are selling a vehicle within the United States.  You also have to consider factors such as your time, energy, and whether you are still paying interest (and insurance) on the vehicle.  If you have a large loan balance, you might be paying $100 a month in interest, plus another $100 month in insurance.  Be sure to factor these carrying costs into your calculations; you can still lose money with a higher sales price if the car has been in your driveway for six months.  (And you know how life can be.  Six months can blow by pretty quickly if you're not focused.)

If you're selling at an overseas duty station, the Kelley Blue Book and others valuation guides won't be much help.  Selling within a small market, supply and demand are crucial.  This is especially true if tax considerations or language barriers mean that you are marketing just to the other Americans.  You're often also dealing with more limited time constraints.  Some lemon lot market research will help you know prices for your area, and if you plan ahead, you can keep an eye on which vehicles are selling at which prices.  Don't forget to ask around!  We're all in this together, and your friends probably have some idea what they'd be willing to pay for your vehicle.

Decide Whether to Trade or Sell It

From USAA:
 "It's generally known that you're likely going to get more for a used car if you sell it to an individual buyer rather than to a dealer or trading it in," Thompson says. That's because dealers have to put money into a used car to refurbish it and bring it to market or auction in order to make a profit.

So, research trade-in value versus the private-sale value. Knowing the difference can help you weigh your options. Generally, you have three choices:

  • Dealer trade-in. While dealers generally pay less for a trade-in than you would get selling the vehicle yourself, you might find that the convenience of a same-day transaction makes up for it. You can leave the old car on the lot and drive away in the new one.  Fix notes that the sales tax credit for a trade-in, offered in most states, can sweeten the deal. Usually, you pay sales tax on the new car price minus the trade-in amount. For example, on a $20,000 new car with a $5,000 trade-in, you'd only owe sales tax on $15,000. In a state with 10% sales tax, that's a savings of $500.
  • Direct sale to a dealer. Selling to a dealer without buying another car is also an option. It's easy and helps you separate the sale of your current vehicle from the purchase of the new one, which can simplify negotiations in both cases. As with a trade-in, however, you'll probably get less for your car than you would by selling it to an individual.
  • Dealer consignment. For a fee or commission, a dealership may handle the sale of your car for a price you determine.
  • Direct sale to an individual. While this option may bring the highest price for your car, it often requires more time and effort. Traditional sales methods include taping a "For Sale" sign to the window, or buying an advertisement in the classified section of your local or community newspaper and its website. The Internet, however, can make advertising easier, thanks to auto-related websites that let you market your vehicle to a large audience.
You don't necessarily have to immediately decide on one of these options, Thompson says. You may want to have conversations with a dealer about trading-in your vehicle, or selling it directly or posting it online. The more conversations you have about your options, the better you can feel about the deal on your vehicle you ultimately end up with, he adds.

However you sell your car, be prepared to negotiate with buyers who have done their research. And keep safety in mind: Meet strangers in a public place, and never give out your home address or other personal information.

Don't forget the option of donating your car to a local charity.  This can be more advantageous that you might think, and it allows you to control the date of disposition.  For example, we donated our minivan when we moved overseas.  We literally drove it to the airport.  Some companies will meet you anywhere for a donation, I had my mother drive it to the designated place.  Not only did we have necessary use of our large vehicle and not have to rent a car, but the tax deduction that we received was higher than the potential sales price.  It was definitely a win-win-win proposition.

Showing Your Papers


From USAA:

Like a soldier in a crisp dress uniform, your spiffed-up ride may be ready for inspection. Presenting the right paperwork can seal the deal.


Here's what you need:


  •  Service records. "If I see records, I know you cared for your car," Fix says. A car aficionado, she maintains detailed files on every vehicle she owns, with notes and receipts. She suggests keeping a simple notebook in which you jot down repairs and maintenance work, and the dates they were done. If you don't have long-term records, keep recent receipts for such things as oil changes and tire purchases.
  • CARFAX® Vehicle History Report. This report, done through a car's vehicle identification number or license tag number, can create good will with potential buyers and offer them peace of mind by assuring them the car hasn't been flooded or totaled in a wreck, then repaired. 

The Legal Stuff

From USAA: 
If you sell your car to an individual, prepare a bill of sale that documents the transaction terms and serves as a legal receipt. Include the year, make, model and purchase price of the vehicle, the date, your name and the buyer's name. Both you and the buyer should sign it; keep a copy for yourself. Make sure to include these two key phrases:
  • Car sold in as-is condition.
  • No warranties expressed or implied.
Otherwise, if something goes wrong with the car, an unhappy buyer could demand some money back, Fix explains. Check your state's department of motor vehicles for more information on how to prepare a bill of sale.
I recommend including the Vehicle Identification Number (VIN), plus addresses and contact information for both the buyer and the seller.  Sales to a dealer may include additional documentation, but be sure that you get at least a completed bill of sale.
Next, transfer the title. Since the title-transfer process varies by state, check with your department of motor vehicles or county clerk's office to find out what you need to do.  Only turn over the keys and title once you have successfully received payment or the buyer's check has cleared.  When you transfer the title, cancel your car insurance on the vehicle.
How you handle the actual payment can be a bit touchy.  I would never recommend accepting a personal check, unless you know the buyer.  (And I don't recommend selling to people you know.)  A cashier's check is safer, but can still be dangerous.  An electronic funds transfer is another option.

Once the car has sold, be absolutely sure that you have documented the transfer of title with the state in which YOU had the vehicle registered.  This can not be emphasized enough.  There are so many random things that can go wrong, and you need to ensure that you have cleared yourself from liability for the car.  Informing the state of the sale is the most important step in protecting yourself.

Even thought this is nearly 2,000 words, the process itself isn't complicated.  With a little bit of time and patience, you can get rid of that unnecessary vehicle in a way that helps your stress level and your wallet.


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