How to Sell Cars

Selling cars is an involved process, but it doesn't necessarily have to be a complicated one. By following the steps below and keeping organized throughout the process, you can learn to sell cars with ease and confidence.

EditSteps

EditSelling on the Private Market

Find out what your car's worth. Use the Kelley Blue Book to get an idea of average resale values, and check listings in local newspapers and online (at sites like Craigslist) to get a more accurate estimate for your area. Once you have a price range in mind, closely evaluate your own vehicle. Does it have dents, scrapes, or cracks anywhere? Do all the components work properly? Knock money off the asking price for each thing wrong, and add money for any desirable premium features (such as nice new tires) you can find.
- Sometimes a heavily modified car is worth more money; sometimes it's not. It's hard not to ask for more when you've put in hundreds or thousands of dollars installing better speakers, racing seats, and a body kit, but there's also consumer demand to consider. Not as many people want a modded car as want a regular, production model car.
- Don't forget to check mileage, too. Cars with high mileage for their age tend to sell for significantly less money than those with few miles.

Prepare your car for sale. Remove all personal effects and trash from the car (including the trunk), and thoroughly vacuum it out. Wash and wax it, shine the front and rear dashes with Armor-All or a similar glossing product, and polish the tires, hubcaps, and chrome from bumper to bumper. In short, make your car look as clean and presentable as possible.
- If you want to, you can purchase paper floor inserts (the kind auto shops use when they're working on your car) to keep the floor free of dirt. It's probably not necessary unless you expect that a lot of people will be showing up to check your car out.
- Don't forget to thoroughly clean the steering wheel, which has oil from your hands all over it.

Market your car. At the very least, buy a For Sale sign and display it prominently in the front or rear window with the price and a phone number visible. Park your car somewhere the sign will be seen by a lot of people who might be interested. Most people also put an ad on Craigslit and/or in local newspapers. If posting your ad to Craigslist, don't neglect to add photographs. They cost nothing and make your car much more likely to sell.
- Use your ad(s) to list all the features of the car, such as transmission type, options, color, and trim. This is easy online; it requires some inventive abbreviating for a newspaper ad. Be honest and upfront about any problems with the vehicle, too, but don't make it sound like a lemon if it's not. Try to keep the tone positive.
- If you don't have a public place to park your car, park it on the street in front of your home. This way, people will still be able to notice it quickly and test-drive it without feeling like they're trespassing.

Keep the price high. Add some money (at least a few hundred; up to a couple thousand for a newer car) to whatever you'd like to actually get out of the sale, and then let the customer haggle you down to that price point. That way, you're getting closer to the amount you want, and the person who buys your car is satisfied by getting a better deal on the car than what was advertised. Consider using the letters OBO (“or best offer”) in your listing to demonstrate that you're willing to haggle.
- If you add things like “price firm” or “no lowball offers” to your listing, you'll probably get fewer responses. Yes, some people will offer you a ridiculously low sum, but you don't have to take them up on their offers, and dealing with a few jokers is a small price to pay for massively increased interest in your car.

Be transparent. Allow your customers to have a copy of the VIN number so they can run a vehicle history report to check for past accidents, or run one yourself and show them a copy of the report to prove that you aren't lying about the car's history. The associated fees aren't very high. You can also allow customers to take the vehicle to their mechanic to have it checked out – just be sure that they're trustworthy.
- Have your own mechanic prepare a report you can show your customers, if you'd prefer not to take a chance on letting them drive away with the car.
- Carfax is another service that offers vehicle history reports. Some people prefer to be able to read a Carfax report before buying, especially in the case of later-model used cars. Depending on the value of your car, it may be worth it to have a Carfax report for it on hand.
- If there's anything negative you know about the car that didn't come up in the vehicle reports, be upfront about that, too. Buyers appreciate an honest seller.

Sell the car. Once a price has been agreed upon and the customer is ready to buy, complete the transaction by following the car selling rules for your state's DMV. These vary from state to state, so it's best to look up the DMV offices for your home state and learn the specific steps and paperwork required that way. One thing you'll typically always have to do is sign the back of the title and give it to the buyer. There may also be small fees attached. Have everything prepared in advance you don't have to scramble during the actual sale.
- Don't forget to keep a clear and detailed record of your transaction. Write down every piece of information that could possibly be of any importance later. You might also want to get the buyer's signature on a piece of paper saying he or she bought the car, just to be safe.

EditSelling as a Dealer

Decide what kind of dealer you want to be. There are two types of auto dealers in the industry. Wholesale dealers are only allowed to sell cars to other (wholesale or retail) dealers. Retail dealers sell cars to the general public; these are often (but not necessarily) cars purchased from wholesale dealers. Wholesale dealers buy and sell at lower prices, but have the advantage of often being able to move many more cars per month than retail dealers, who can set higher prices but whose overall sales numbers are more beholden to the whims of consumers.
- Generally speaking, wholesale dealerships are a good choice if you're already good at fixing up cars, and can buy good cars with one or two fixable problems at a low rate, then fix those problems and flip the vehicle to a retail dealership. Wholesale dealers also often acquire cars from police auctions, foreclosures, and other competitive markets, so a competitive and enthusiastic attitude is useful.
- Retail dealerships are a better choice if you're a detail person with a good head for customer service and sales. You can purchase good working cars, touch them up cosmetically with a thorough cleaning and detailing, and then make your money connecting individual customers with the right car at the right price for both of you.

Get educated. As a businessperson, you'll be required to get licensed, bonded, and insured according to state and federal regulations. In addition to a general business license, you'll need a special dealer's license from your state's DMV. This typically involves filling out some forms, paying some fees, and taking a test that proves you understand the rules and guidelines an auto dealer must follow.
- The federal government's Small Business Administration offers a searchable database that provides information on all types of business licenses and permits, filtered by state or zip code and type of business.^[1]
- Auto dealers should be familiar with the Federal Used Car Rule, including what information dealers are required to disclose to consumers and what forms are required to be in compliance with federal law.^[2]

Take your test. Go to the DMV once you feel prepared, and take the test to earn your auto dealer's license. Pay any other fees you need to at this time. In most cases, the test won't be very difficult as long as you've read and thought about the pertinent information. However, if you don't pass, you can always try again according to a retaking schedule set out by your DMV.
- If you're anxious about tests or have trouble remembering information, try taking notes as you read, and then reading your notes aloud afterward. This engages all three primary learning styles: visual (reading), kinesthetic (writing), and aural (hearing), which should help you to remember things much more clearly.

Purchase insurance and bonding. An unfortunate reality of the auto sales industry is that being bonded and insured is not only required by law, but actually very necessary to prevent misfortune. As a dealer of either type, you'll be required to purchase general liability insurance, comprehensive insurance, and (in most cases) lot insurance. These help protect you in the event of theft, disaster, or an accident.
- You'll also need to purchase a surety bond, which is a (fairly expensive) extra type of insurance that guarantees quality in your transactions. A surety bond protects you when you purchase a flawed vehicle from another dealer, and it protects your customers from being sold a worthless lemon of a car.

Acquire inventory. Now that you're licensed, bonded, and insured, be sure you have a properly zoned space to sell your vehicles, and begin purchasing your inventory. Look at estate sales, private and public auctions, liquidation sales, auto wholesalers, and private auto listings to find the best deals. Use a pricing guide (such as the Kelley Blue Book), your best negotiation skills, and a certified mechanic who can perform a quick quality check on the cars you buy in order to ensure that you get the best cars you can for the best price possible.
- Consumers will be more loyal to an honest lot selling solid cars than they will to a slippery salesman peddling questionable goods. It's always worth the extra time investment to be sure your inventory meets a high standard of quality.

Advertise and sell. With a handful of good used cars inspected, cleaned, and ready for sale, it's time to get the word out. Post fliers at other area businesses, start a Facebook page, and advertise each of your cars on Craigslist and in all the local newspapers. Put up a bright, easy-to-read sign somewhere that people driving by will be able to see easily. In short, do whatever you can to promote your business.
- Consider staging or sponsoring a community event, if you have the money. Host a summer barbecue party in a nearby park, with proceeds going to a local charity, or even just pay for advertising space in a student newspaper or theater program.
- Don't neglect the power of the Internet. In addition to Facebook, get on Foursquare, Twitter, and even Instagram to promote your business. Update your social media sites regularly whenever you have a new car for sale or offer a limited-time promotion. You'll generate lots of buzz in no time if you stick with it.
  - Eventually, consider investing in a custom website with a searchable, photographic inventory of all the cars you have for sale.

EditSelling to a Dealer or Junker

Expect less money. There are a number of quick ways to get rid of your car for guaranteed cash. However, the amount of money you'll make using these methods is minimal. Only sell your car to a scrapyard, parts lot, or dealership if you either have a car that doesn't work, or can't bear to wait any longer to get rid of it.

Sell to a scrapyard. The quickest way to get rid of a car that's a complete wreck is to sell it to a scrap metal company. These businesses pay a flat rate per car, regardless of its condition. However, they also do you the service of coming with a tow truck and hauling away your old car themselves, which makes it a tempting proposition if you've got a rusted out hunk of junk gathering weeds in the side yard.
- Pay rates vary between operators, but you can typically expect to get no more than $100 out of your car if you sell it to scrap junkers. Don't ever pay for them to come to you.

Sell to a parts yard. Junkyards full of stacked cars and mean-looking Rottweilers are becoming more and more a thing of the past. In their place are user-friendly, organized yards where dead cars with parts that still work can be picked over to fix other cars of the same make and model. Franchise operations such as Pick-n-Pull make offers based on their estimate of the parts value of your car, so you can expect to get more than you'd get from a scrap hauler as long as your car is mostly in good condition. On the down side, you often have to get the car to the junkyard yourself in order to get paid.
- Selling to a parts yard is an ideal way to get rid of an older car with one or two problems that would be very expensive to fix at a shop, such as a busted alternator or timing belt. If you live close enough to the lot, the company might send a tow truck for you; otherwise, you'll probably have to pay for a private tow.

Sell to a dealership. Car dealerships often have good deals on used cars that you can make even sweeter by trading in your car as part of the down payment on your new ride. Dealerships tend to offer a decent chunk of change when you sell your vehicle as a trade-in; on the other hand, they aren't as likely to buy from you if you don't plan to also buy something from them.
- Dealerships strongly prefer that the car you trade in is in good working order. They'll buy a car with minor problems (such as drained air conditioning), but they usually balk at cars that won't start or run.
- Dealerships will usually give you an okay deal on your trade-in, but sometimes you can haggle an extra hundred or two out of it.

EditTips

The neater and cleaner you can make your car look, the more likely it'll sell quickly and for a good amount. Don't underestimate the power of the first impression.

Everyone expects to be able to talk down the price of the car they want. Use this knowledge to your advantage by setting the price high enough that you can go down a fair amount and still make a decent profit on each sale.

Keep immaculate records for each sale. This is especially important for dealers, but it's a wise move for any seller, just in case any issues arise with the sale later.

EditWarnings

Don't set prices too high, or people won't even bother with trying to negotiate down since the fair price seems to be such a steep cut from your asking price. Instead, determine the general market value of your car, and then determine how much below that price point you can afford to sell it. Offer it at the average price and negotiate down a little from there.

Always meet customers in a well-lit public place, preferably during daylight hours. It's rare, but sometimes people will try to steal the car you want to sell. Never agree to meet a buyer on a back alley or behind a building.