Yes, new cars are flying off the lot right now, but used car sales increased by double that amount in 2021. With the price of used vehicles soaring as a result, maybe you’ve been thinking about putting your car on the market. Especially if you have an older car or a car that you don’t use as often, you may seriously be wondering if now is the time… But with the market up, you don’t want to put yourself in a position where you end up spending more to replace the car you just sold. We get it — it’s a tough decision. The solution is to walk yourself through all the mental steps of a “Love It Or List It” style exercise — exactly like the HGTV show, coming to a garage near you.
Compare and Contrast
Before doing anything else, see how much your car is worth on the market now. Depending on where you sell it (via a dealership or a private sale), sites like Kelley Blue Book and Edmunds will help you see what the trade-in value or resale value is, given your car’s condition: miles, year, make, wrecks, dents, flood damage, and so on. If you’re interested to see more possibilities for cash offers for your car, go to Carvana and Vroom to compare. Doing your research beforehand to see what your car is worth will help you be a smarter seller, during a time when market demand is off the charts.
Trade-In Or Sell
If you’re thinking about trading your car in or selling it to a dealership, remember that their goal is to make the most money possible when they flip it and sell it to someone else. In other words, if you go this route, you might be offered less than you would when selling it to a private buyer who is going to drive off into the sunset themselves. Also, check with your state to see if they have a sales tax on cars — while this won’t be an issue with a trade-in, with a private sale, you will have to pay tax on the difference between your trade-in amount and the cost of the new car you’re purchasing, explains Stephanie Hsu, Associate Director of Product at Credit Karma Auto.
And if you’re going the private sale route, that will be more work on your part with the test drives, paperwork, advertising, phone calls, etc., says Stephanie Brinley, a principal analyst at IHS Markit. To help with advertising your ride, check Craigslist, Cars.com and Autotrader, all of which make it easy for first-time listers to get started. And remember to always make sure to have a friend or someone you trust with you when offering meetups or test drives, just in case.
Know Your Car, And Have The Paperwork
Make sure you have all of your car’s important paperwork (like title, the car’s maintenance schedule, and the original sale documents) on hand, and anything else that you’ll need in your state to transfer ownership. In some situations, you may also need the bill of sale, an odometer disclosure statement or a notice of release of a liability, says Hsu. Not being prepared with the correct paperwork might make you seem like you’re running a scam, or wasting someone’s time, and you don’t want to scare away potential customers. Once you have all the documentation, you can easily prove why your car is worth as much as it is — in other words, having your ducks in a row here can make any negotiations come out in your favor. Just keep in mind that potential buyers can research your car online, so pricing the car in the range of the competing cars in your area will show that you’re ready to offer a fair deal. This will help ease the process and increase the chance of a smooth transaction.
Don’t Rush To Sell
Even with nearly 30% of all cars on Credit Karma’s platform seeing a car value increase between $2,000 to $5,000 this year, rushing out to sell your car right now might not be the best move for you. If you’re just looking to take advantage of the market, you have time to create a plan for your next car — the market is expected to stay elevated through 2023, according to Wards Auto, an automobile trade magazine. So before you say goodbye to your sweet ride, make sure you know what you’re getting, and what you’re giving up. Good luck!
More on HerMoney:
- Ending a Car Lease Early Now That Cars Are in High Demand
- Insurance Checkups for Auto and Homeowners
- HerMoney Podcast Episode 229: How to Buy a Car and be Smart With Big Purchases
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