Whether you are trading in a used car or outright selling an older car to a dealership for extra money there are a few tips to make sure you maximize your profit. As used cars are lasting longer than ever before, there is a huge market for used vehicles. Failure to do your homework, spruce up your vehicle and negotiate can lose you money when selling to a dealership.
Research and Market Value
Used car prices are determined based on their market value, as well as supply and demand. What most people don’t know is that when production of new cars is slowed down, such as the case of the Japanese earthquake in 2011, used car prices increase. The reason is that when there are fewer new cars being sold, there are fewer trades and an increase in used car purchases. Your vehicles market value is determined based on how well the vehicle will sell. Spotless used cars with higher-end, hard to find features, can command a lot more money than the more common base models.
Condition of the Vehicle
The condition of your vehicle makes a huge difference when it comes to negotiating the price of your car. Cars that are clean inside and out with no or minor damages are much easier to sell. I work for a large dealership and we spend about $1,000 per vehicle to detail and get the vehicle show ready. Dealerships wouldn’t sell a dirty used car, so why would you? Take an extra few hours to make sure the car is spotless, fluid levels are topped off and the car is clean inside and out. You can ask for more money if the dealership does not have to spend time and money getting your vehicle show ready.
Should You Sell to a Dealership?
Most people assume that they should trade-in their used car to a dealership when purchasing a new car because it is a hassle to sell. With sites like Craiglist, Facebook and eBay, it is easier than ever to sell a used car. Do the math before trading your car in, but keep in mind that it takes time and a lot of effort to sell a used car online.
The Dealership is not the Bad Guy
Car dealerships are thought of the same as the dentist or the doctor; we don’t like to go unless we have to. Car dealerships are in the business of making money, but with online reviews, they are also making sure that they please the customer. Market value of your vehicle is not based on Kelly Blue Book, but rather by special online databases that dealerships have access to. Don’t assume that your vehicle is worth more because some internet site tell you that. Those sites don’t always deduct enough for mileage, wear and tear and true market value, but will give you a ballpark figure. Do not assume that the dealership is trying to rip you off because they offer below what you believe your car is worth. However, negotiate until you both reach a fair price that you can agree upon.
Selling Outright Without Purchasing a New Car
You might think that car dealerships make thousands of dollars on new car sales and wouldn’t even be interested in purchasing your used car. However, dealerships only make about $1,000 on cars valued up to $35,000. This does not leave a lot of room for profit. The real money is in, you guessed it, used cars and service. Dealers mark up the value of used cars after cleaning, conditioning and detailing them. Most dealerships will offer you fair market value for your vehicle, but less than what you could sell to a private party. However, the benefit is that dealers have access to car auctions and will sell almost any vehicle at auction if they do not command a high resale value. The benefit of selling your car outright is that dealers will take just about anything that runs and is clean.