How to Sell a Used Car to a Dealership

Car ownership almost always has two universal truths, like death and taxes: at one point you will acquire a car and at some point you will have to sell that car.

Now, a number of other things can happen along the way. An accident could happen in which the car is totaled and replaced. Or maybe the car is stolen and never recovered. The car could also be gifted or donated to someone else. In any case, there are a handful of other rare instances where selling your car isn’t necessary. But most people end up getting rid of their old vehicle in one of three ways: they trade it in for a new vehicle, they sell the vehicle to a dealership, or they sell it to a private party.

Obviously, there are advantages and disadvantages to each of these scenarios. Trading in the car at the dealership for a new car is the most convenient, though you will probably get the worst deal on your old vehicle from the dealership itself. Selling your old vehicle to a private party is arguably the way to get the best deal on your old vehicle. But it’s also the most difficult way to sell, as you have to vet the buyer and go through the whole test driving process in a more unregulated environment. That’s why selling to a dealership is preferable to many people trying to sell their old vehicle. It’s an easier process, albeit they will usually get a lower offer.

Below is a breakdown of the process for selling your old vehicle to a dealership, as well as some tips for how to get the most money possible with the least amount of stress and intimidation.

Know the Value of What You Are Selling

The first thing you should do is know exactly what you are selling to a dealership. They are professional car salesmen and buyers, and they’ll know exactly what you are trying to sell them. So, you will want to level the playing field off the bat.

First, go on Kelley Blue Book and go through the easy step-by-step process determining what your vehicle is currently worth based on make, model, year, condition, and any options on the vehicle. They will give you an evaluation that you can print out. This will become the ceiling for what your vehicle is worth.

Now that you have a number in your head off this evaluation, prepare to be offered significantly less by an interested dealership. Car dealers don’t consider Kelley Blue Book to be accurate in their business. They pretty much unanimously undercut the website’s evaluation by 10 to 20%. But knowing the high-end value of your vehicle is important.

Then go on other car buying websites, both national and local, and find similar makes and models of your old vehicle with a similar mileage. See what these vehicles are being priced at, keeping in mind the dealer mark-up. Dealerships obviously try to make as much money as possible off each sale and their mark-up is usually ten to twenty percent, depending on the model and mileage of the vehicle. This information will also help you to get an idea of the car’s value in the open market.

Know the Process if You Still Owe Money on Your Old Vehicle

If you are still paying off the car loan on your old vehicle, it’s good to know what it will take to pay off the car when you sell it to a dealership and what will be left over for you to put in your pocket. That is, assuming there is anything left over.

If this is the case, call the bank who set up your car loan or get on their website and get a pay-off quote from them. If the amount of the pay-off quote is the same as or close to the amount you think you could get for your old car from a dealership, then it may not make sense to sell it to them. You won’t make much money and you also won’t have a vehicle. It definitely doesn’t make much sense to sell the car for less than the pay-off amount.

By doing this, a floor for the amount you know you must sell your old vehicle for will be established, giving you a true range of amounts you are willing to accept.

Know the True Condition of your Old Vehicle

Get a vehicle history report

If you are the only one who has ever owned your vehicle, then you will probably know its history, namely where the vehicle has been serviced and how often it has been in accidents, if any. If you bought the vehicle used and you didn’t get a vehicle history report when you bought it, then you should probably get one before you try and sell it to a dealership. Either way, the dealership will probably want a vehicle history report before they consider making an offer on the car. This will cost around twenty dollars through a website like CarFax and AutoCheck and can be done in about fifteen minutes. Get these reports and keep a digital copy on your computer, as well as a hard copy that you can carry with you when you approach all the dealerships.

Have a full inspection from a trusted mechanic

Of course, that’s just the first step in learning the true condition of your old vehicle. You will also have to check out the current condition, based on the miles and daily grind you put on it yourself. Keep in mind almost all car dealerships have garages on-site or access to a garage nearby, along with a team of mechanics who know how to spot wear and tear, past damage, and potential problems in a vehicle. In short, if there’s a problem with a vehicle or there will be a problem with a vehicle soon, the dealership is going to spot it and count it against their offer. Many dealerships will—and this shouldn’t come as a surprise—not be entirely truthful about maintenance issues with a vehicle, or the real cost of repairs to said vehicle, especially if they can get a better deal on it from a seller.

In other words, you need to know exactly what is wrong with your vehicle from a trusted third party, so you have ammunition against these claims of maintenance issues—or at least be mentally prepared when they confront you with them. This means you’ll have to visit a mechanic you know and trust for a full inspection and have them give you their analysis in writing. This way, you can have it in your back pocket when the deal making begins.

Increase your bargaining power

This will probably cost you a little bit more money, but all these upfront costs pre-sale can be added to the number you ideally want from the dealership. For example, if you spent a total of four hundred dollars on an inspection, some maintenance, the CarFax report, and some cleaning, add that amount to the offer a dealership makes you when you counter.

And this will all be money well-spent. If you can catch the dealership trying to undercut you for your old vehicle by telling you something is wrong with it when there isn’t, you have a lot more bargaining power. It also allows you to tell them you’ve had it inspected when you begin the negotiation, dissuading them from any funny business in the first place.

Of course, the inspection you do privately may also inform you of problems that may be costly, giving you the option of knocking money off the sale of the car, or fixing them yourself… or just selling your old vehicle in a different way altogether. There may also be some very minor fixes you can do on your own for $20-50 and an hour or two, which a dealership would otherwise knock hundreds of dollars off the offer price for. This can be things like touching-up the paint job, replacing a cracked mirror, or fixing an oil leak. This sweat equity is well worth it in the long run.

Make it “Like New”

Make your old car look like a new car you are driving onto the dealer’s lot. In other words, clean it very well. Spend fifty to a hundred dollars and get the car cleaned and detailed, removing any stains, grime, or smell that can affect the offer for the vehicle on a subconscious level. While this may seem like a silly thing to do, since the dealership will undoubtedly clean and detail the vehicle once they purchase it, there is a lot to be said about first impressions, especially when you are selling something. Plus, it will show the dealership you mean business and could impress other dealerships out there—their competitors.

Get as Many Offers as Possible

Car dealerships buy all types of vehicles, as they have a wide variety of different ways to sell them. Just because you drive a truck doesn’t mean a luxury car dealership won’t be interested in buying it, and vice versa. While you might get a better, more knowledgeable offer from a dealership that sells the make and model of your vehicle, that’s not always the rule of thumb.

The point is, there are possibly a lot of potential buyers out there in many different nearby dealerships. So, as you do all the aforementioned things before selling your vehicle to the dealership, come up with a strategy of which dealerships you plan to approach with your old vehicle. This may be as simple as plotting your driving route on Google Maps, or even stopping into the dealerships and seeing what types of used vehicles they are most interested in buying, getting a sense of their dealers, and their way of doing business.

On the day you plan to sell your old car, spend thirty minutes to an hour at each dealership, getting an offer from each of them. Unless it’s an offer you can’t refuse (it almost surely won’t be), take their offer in writing, put it in your pocket, and head to the next dealership. Repeat this process until you have several different competing offers for your old car. It will be clear who is giving you the best offer and who isn’t—hello, leverage! —and then the negotiating can begin.

Go back to each dealer who hasn’t given you the best offer and tell them you have a better offer for the car already and the amount you would want to beat that offer. See how they respond and if the offer changes or not. Be prepared for this to take a long time—car dealerships will try a lot of tricks and often try to wait you out or wear you down in various ways. Hold firm and stick to your guns. Always be ready to walk out the door if they don’t give you what you want.

Read the Paperwork Carefully

Once you have a deal with a dealership, make sure you carefully read the paperwork they give you for the purchase of your car. There are often hidden fees and clauses in this paperwork that can cost you money or force you to wait a certain amount of time before they actually pay you for your vehicle. Make sure you understand or sidestep as many of these contractual details as possible before signing off on the deal.

Be Realistic

That said, be realistic about how much your vehicle is worth and what a dealership is going to give you for it. Keep in mind you are selling your used car to a business that is only going to buy it if they believe they can sell it for a profit. They will have the same concerns as you currently do after they buy your vehicle, so there is a ceiling on the product you are selling, in most cases.

While playing one dealership off the next is a great idea to get the price up initially, it won’t make financial sense for that offer to keep going up for any dealership out there. They will quickly not want to do business with you if a deal is not reached in a short period of time and those initial high offers may go away.

If you want to make real profit off your old car, then you may want to consider selling to a private party rather than a dealership. That, however, requires a different strategy, a lot more work, and an environment that is not closely regulated.

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