Author Topic: Private Vehicle Sale  (Read 11965 times)

kudy

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Private Vehicle Sale
« on: March 10, 2012, 09:59:17 AM »
Hello MMM forums! This is my first post, glad to join the community.

Something I've wanted to do for years is ditch my SUV for a higher MPG vehicle.  I own the current vehicle outright, but I don't have enough loose cash at this point to buy a replacement car before selling the SUV, so my question for all of you who've done this in the past is, what's the best way?

I've considered getting a bridge car loan to buy the new vehicle, and then selling the old one.  I've also considered selling the old one and trying to find a way to borrow/rent a car from someone who has an extra (this would take some asking around and might not happen) in the ensuing gap before I find a replacement.  Are there other avenues I haven't imagined yet to make an easy transition where I can still drive every day?

I also have little experience buying a vehicle from a private seller - I realize that the odds of getting a bad deal are just as equal when buying from a dealership, so I guess my followup question is, what's the best way to evaluate a new car for engine problems, etc. before the purchase (whether it's a private sale or a dealership)?

Thanks in advance for any feedback or discussion you can engage me in on this topic!

shedinator

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Re: Private Vehicle Sale
« Reply #1 on: March 10, 2012, 10:35:12 AM »
We took our Jeep liberty, checked kbb values on a few used cars, and then went down to the dealer and traded the SUV straight up for the Scion. Overall, we took about a $500 loss from one to the other, but I think we've already recovered that in gas.

kudy

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Re: Private Vehicle Sale
« Reply #2 on: March 10, 2012, 04:13:43 PM »
I realize now this thread should have probably been in the "Ask a Mustacian" forum -whoops!

I'd like to try and maximize my value by doing a private sale, and I am also hoping to recover some money out of the higher value SUV, and buy a lower value car, which I don't think will be as easy at a dealership - maybe I'm wrong?

Moneyisntlove

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Re: Private Vehicle Sale
« Reply #3 on: March 14, 2012, 09:26:00 AM »
Get  yourself a (used) copy of Herb Cohen's "How to negotiate anything."  He has a whole section on buying a car from a private owner.  (Mostly he has great hints on getting the absolute lowest price for everything you buy.  My husband gets jealous because I'm always telling him that I'd like to marry Herb Cohen.  What a knowledgeable man!)

James

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Re: Private Vehicle Sale
« Reply #4 on: March 14, 2012, 08:26:17 PM »
You didn't say where you are from, and that matters a lot.  If you are in a big city your options become more clear.  Out in the country your options are more limited.

If you are in or close to a decent sized city, just go through Craig's List and find comparable for the vehicle you are selling by searching the listings.  That is your competition.  Next go to kbb.org and edmunds.com and find the value for your vehicle.  Based on all of that data, figure out what you would be happy getting for your vehicle.  For simplicity I would consider a number half way between private party value and trade-in value as what you should expect.  But I would list it for closer to private party value, especially if you are looking good against the competition on Craig's List.

Obviously it would be great to sell first, you really don't know how quickly you will sell or for what amount, so if you can borrow a vehicle for a short while I'd go with that route.  We just traded down from a truck to an Outback, and we purchased first because we couldn't borrow.  But if you do that make sure you aren't counting on some unrealistic number to get when you sell your vehicle.  Just like selling a house, pricing it right is important.  If you start too high you are just setting yourself up for disappointment and delay, and you probably won't get more than if you start at a fair value.

I agree with the private party idea, you will pay a premium working with a dealer.  Not that it's always the wrong move, and it's definitely more simple, but if they weren't making good profit they wouldn't be in business.  They will happily give you cash back on a trade in, but not as much as selling and buying yourself.

Regarding purchasing from a private party, the key is to set rules and follow them.  Rule number one is to have an independent mechanic look at the car before purchase.  Driving 1 mile around the sellers house is not going to tell you if it's a good vehicle.  You will have to pay for the inspection, but it will save you a lot in peace of mind and potential big ticket costs.  Just let the seller know ahead of time and line up a local shop to do the inspection.   It doesn't have to be super thorough, just a good overview.  If there are possible issues you can either walk away, or use them as negotiation points.

Number two is to have a ceiling before showing up.  Don't get so set on a vehicle that you keep raising your offer since you just want to have it over with.  Based on your research on kbb.org and edmunds.com you should have a really good idea of value before you show up.  don't pay more than private party unless there is a really good reason.  I offer trade-in value, and work my way up from there.  I consider half way between trade-in and private party value to be a good deal, but it can vary a lot depending on how many of that vehicle is available right now.

Just my two cents, hope it helps.
« Last Edit: March 14, 2012, 08:27:59 PM by James »

kudy

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Re: Private Vehicle Sale
« Reply #5 on: March 14, 2012, 09:18:41 PM »
That's awesome, thanks James.

Brandon

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Re: Private Vehicle Sale
« Reply #6 on: April 05, 2012, 10:53:24 AM »
James pretty much has it covered.  Having bought and sold a few vehicles on craigslist, one switch a few months ago (Jeep wrangler for a civic hybrid), I can say that one of the most important things in buying or selling a vehicle is to have hard, objective reasons for your pricing points.  For each vehicle I went looked at to purchase I would print up the KBB prices for all conditions, including what KBB's descriptions were for each condition (Excellent, Very Good, Good Fair).  After a very thorough inspection of the vehicle, you want to point out every single deviation from what KBB considers applicable for that condition and use that to negotiate down from that price point.  Most sellers I have dealt with have very little objective reasons for their price other than a self serving appraisal they typed into KBB.  You should be peeling them down to their reserve price in no time. 

AJ

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Re: Private Vehicle Sale
« Reply #7 on: April 05, 2012, 11:05:14 AM »
If you're worried about covering the "time gap" between selling your SUV and getting your next car, you could try buying the car first and financing it, then paying off the loan immediately with the funds from the sale. You will pay a bit of interest until you sell, but it may work out in gas savings depending on what you get and how long it takes you to sell. Or, even better, if your SUV is new enough you could take a loan against it so you could flash cash when you buy the car.

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Re: Private Vehicle Sale
« Reply #8 on: April 05, 2012, 11:34:38 AM »
We recently purchased our used 06 Matrix off of craigslist from a private seller.  We test drove it, asked the seller if we could take it to our mechanic, had him give it a thorough workthrough and then used that information in the negotiations.  We had cash in hand ($10k in $100 bills)  when we brought the car back to negotiate.  Others might not be comfortable with this but we were.  It's our opinion that there are benefits of working with cash rather than cashiers check. (Seller knows you are a real potential sale right from the get go, cash allows buyer and seller to claim the sale happened at any dollar figure they wish for tax purposes, and we feel we can negotiate a lower price with cash). 

judgemebymyusername

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Re: Private Vehicle Sale
« Reply #9 on: April 05, 2012, 01:55:48 PM »
I would recommend getting a free estimate from CarMax if you have one nearby. They offered me more than kelly blue book on my old car. I sold it to them right there. I doubt I would have gotten any more from a private sale plus I sold it on the spot and got a check immediately. At the very least you'll have an idea of what price you want to list your car as.

menorman

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Re: Private Vehicle Sale
« Reply #10 on: April 08, 2012, 05:49:29 PM »
I would recommend getting a free estimate from CarMax if you have one nearby. They offered me more than kelly blue book on my old car. I sold it to them right there. I doubt I would have gotten any more from a private sale plus I sold it on the spot and got a check immediately. At the very least you'll have an idea of what price you want to list your car as.
This, and their offer stands for at least a week. But concerning the original question, I recommend not buying another car first so that you have an "interim car" because after the other one is obtained, you can quickly convince yourself to not sell the SUV after all and you'll end up with two cars, which is quite opposite what you seem to want to do.

Mactrader

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Re: Private Vehicle Sale
« Reply #11 on: April 08, 2012, 06:45:10 PM »
I would recommend getting a free estimate from CarMax if you have one nearby. They offered me more than kelly blue book on my old car. I sold it to them right there. I doubt I would have gotten any more from a private sale plus I sold it on the spot and got a check immediately. At the very least you'll have an idea of what price you want to list your car as.
This, and their offer stands for at least a week. But concerning the original question, I recommend not buying another car first so that you have an "interim car" because after the other one is obtained, you can quickly convince yourself to not sell the SUV after all and you'll end up with two cars, which is quite opposite what you seem to want to do.

I have the opposite experience as I recently bought an older car and selling my newer nice sedan. I want that sucker gone asap so I can get my garage spot back! I have it all detailed and such so I'm not leaving it out in the driveway!

kudy

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Re: Private Vehicle Sale
« Reply #12 on: April 08, 2012, 11:19:26 PM »
I certainly won't be convincing myself to keep a 2nd car, because selling the SUV is where I'll get the money to pay for the replacement, whether it's before or after I buy it.

I wish I could see what carmax would give me, but the closest one is 3-4 hours away.

I haven't found a car to replace mine yet unfortunately, but my search continues.  I've basically decided to get a loan if necessary (if I can't get the cash together for a purchase), and then pay that loan off after selling the SUV.  The only downside to this plan is, I believe most banks require a few payments before you are allowed to pay the loan back in full, so I'll likely have to pay a bit of interest if a loan is necessary.

James

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Re: Private Vehicle Sale
« Reply #13 on: April 09, 2012, 07:23:20 AM »
Don't know if you own a house, but a LOC would give you access to cash and is nicely flexible in what you do with it and how soon you pay it back.

If you finance your SUV in order to have money for the new vehicle I would bet there is a clause in any agreement that would let you pay off the loan if you sell the vehicle, even if they have a restriction to paying off the loan early otherwise. 

trammatic

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Re: Private Vehicle Sale
« Reply #14 on: April 10, 2012, 09:59:15 AM »
Craigslist trades can do well, especially if you're not picky about what you get (exact model, etc.)  I've traded an F-150 for a civic with no problem, but I just listed it as "an F-150 for a compact 4 cylinder car". If you offer to sweeten the deal with a couple hundred dollars, you could get more lookers...

reverend

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Re: Private Vehicle Sale
« Reply #15 on: May 05, 2012, 01:12:07 AM »
I've bought and sold a lot on Craigslist and I usually end up buying what I want, then I have time to detail and clean up the one I want to sell and present it in a proper manner.
I usually clean it real well before, then get all the pictures ready, write an ad that sets it apart, then price it right. When I get my "new" car I can go through it before I sell the old one, and then just copy/paste the ad and attach the pics to get the old one sold.

quick and easy.

Ben

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Re: Private Vehicle Sale
« Reply #16 on: May 22, 2012, 08:06:35 AM »
It's our opinion that there are benefits of working with cash rather than cashiers check. (Seller knows you are a real potential sale right from the get go, cash allows buyer and seller to claim the sale happened at any dollar figure they wish for tax purposes, and we feel we can negotiate a lower price with cash).

To clarify, this is tax fraud, a felony that is punishable by hefty fines and/or jail time. Although it is rarely prosecuted, it is still stealing from the government and a pretty unmustachian way to 'earn' money.

Midwest

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Re: Private Vehicle Sale
« Reply #17 on: May 23, 2012, 10:30:40 AM »
Are you saying paying cash is tax fraud on the part of the buyer or the seller? 

Most sellers don't have a taxable gain on the sale of a vehicle.  Therefore no tax due on the sale and no reporting to the IRS required.  Even if the seller is failing to report (which I'm not advocating), that's not the buyer's issue.

arebelspy

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Re: Private Vehicle Sale
« Reply #18 on: May 23, 2012, 12:25:26 PM »
Are you saying paying cash is tax fraud on the part of the buyer or the seller? 

Most sellers don't have a taxable gain on the sale of a vehicle.  Therefore no tax due on the sale and no reporting to the IRS required.  Even if the seller is failing to report (which I'm not advocating), that's not the buyer's issue.

No, he didn't say paying cash is tax fraud.  He's saying that claiming the sale happened at a different price than it actually did in order to avoid legitimate taxes is tax fraud.

Specifically this sentence:
Quote
cash allows buyer and seller to claim the sale happened at any dollar figure they wish for tax purposes
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Midwest

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Re: Private Vehicle Sale
« Reply #19 on: May 23, 2012, 12:55:18 PM »
Are you saying paying cash is tax fraud on the part of the buyer or the seller? 

Most sellers don't have a taxable gain on the sale of a vehicle.  Therefore no tax due on the sale and no reporting to the IRS required.  Even if the seller is failing to report (which I'm not advocating), that's not the buyer's issue.

No, he didn't say paying cash is tax fraud.  He's saying that claiming the sale happened at a different price than it actually did in order to avoid legitimate taxes is tax fraud.

Specifically this sentence:
Quote
cash allows buyer and seller to claim the sale happened at any dollar figure they wish for tax purposes

I didn't read it that way at first, but you are correct.  Having said that, most people don't make money on a vehicle and therefore have taxable event regardless for income purposes.  Also, although I report all my income, failing to report a few hundred dollars of income is not a felony.

They buyer may owe sales tax on the transfer, but I don't think a cash transaction is going to impact their decision as to whether to tell the truth or lie about the  the purchase price.  I do however find cash tends (for whatever reason) to make the seller willing to accept a lower price.

James

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Re: Private Vehicle Sale
« Reply #20 on: May 23, 2012, 02:01:09 PM »
Are you saying paying cash is tax fraud on the part of the buyer or the seller? 

Most sellers don't have a taxable gain on the sale of a vehicle.  Therefore no tax due on the sale and no reporting to the IRS required.  Even if the seller is failing to report (which I'm not advocating), that's not the buyer's issue.

The issue isn't taxable gain on the sale of a vehicle, the issue is sales tax owed by the purchaser when applying for a title.  Sales tax in WI is 5.5%, so if I pay $8,000 for a car but when applying for the title I write down purchase price of $4,000, I have "saved" $220.  If I paid cash then there is no check copy to prove I paid the higher amount.  It's most definitely fraud and wrong, despite being practiced by a lot of people, and despite the fact that I don't think the state should charge sales tax for the private purchase of a vehicle.  If your state doesn't charge sales tax when purchasing a private party vehicle then this wouldn't apply.

Ben

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Re: Private Vehicle Sale
« Reply #21 on: May 23, 2012, 08:42:01 PM »
Thanks, James + arebelspy, that is exactly what I was saying. Appreciate you clarifying for me.

kudy

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Re: Private Vehicle Sale
« Reply #22 on: June 02, 2012, 05:13:25 PM »
Just wanted to post an update... I bought a replacement car a while back, and now I am sitting on the SUV with no interested buyers - guess I need to keep lowering that price!

grantmeaname

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Re: Private Vehicle Sale
« Reply #23 on: June 02, 2012, 06:47:48 PM »
MMM has some great tips for making things look attractive on craigslist in his Get Rich With... Craigslist article.

Also, keep in mind that some of the things people really care about in cars are really easy to fix. Vacuum it out so it's totally spotless, get some leather spray or cloth interior spray for the seats, and get a really neutral air freshener for the interior. Wash the exterior, buff out little scratches with something like car polish, and get color-matched touch-up paint for big scratches. If your car looks totally gourgeous in and out, you can ask more for it or move it much more quickly at the same price.

trammatic

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Re: Private Vehicle Sale
« Reply #24 on: June 04, 2012, 10:24:04 AM »
One other thing I'd recommend to do is to find a good place to put it out with signs on it.  Either look for a place where lots of people put their used cars to sell (our Park and Ride lot turns into a regular used car lot on the weekends), so it'll be there for interested buyers, or find a well-traveled spot that you can park it.  (My in-laws' house backs up to a major 2-lane commuting thoroughfare, and I can usually get 2-5 calls per day that it's parked out there.

If you do that, make sure to buy a visible FOR SALE sign and wedge it in the window.  I also have had luck printing out the price estimates from KBB.com and make sure my price is somewhere in the middle...it encourages people to think that it's a fair price.

ErikZ

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Re: Private Vehicle Sale
« Reply #25 on: June 11, 2012, 09:52:12 AM »

I just sold my corolla on Craigslist. The dealer said they'd give me 750$ for it. :-P

Had it checked out by a mechanic. Steam cleaned by a detailed. Wanted 3000 for it so I posted it for 3200.

Posted at 2pm on a Sun. Sold at 7pm for 3000.

Also, keep in mind that some of the things people really care about in cars are really easy to fix. Vacuum it out so it's totally spotless, get some leather spray or cloth interior spray for the seats, and get a really neutral air freshener for the interior. Wash the exterior, buff out little scratches with something like car polish, and get color-matched touch-up paint for big scratches. If your car looks totally gourgeous in and out, you can ask more for it or move it much more quickly at the same price.

kudy

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Re: Private Vehicle Sale
« Reply #26 on: July 14, 2012, 07:36:58 PM »
Just sold my SUV today! Found a buyer from across the state from Craigslist - I think we're both happy.  Took a long time to find someone, but I kept inching the asking price lower.

kudy

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Re: Private Vehicle Sale
« Reply #27 on: December 04, 2012, 07:08:44 PM »
I may be breaking protocol by bumping an old thread while simultaneously and shamelessly self promoting, but if anyone wants to read a blog post summarizing the benefits of selling my SUV, I just published a new post on my new blog:

http://www.monetarymusings.com/76/downsize-the-car-selling-my-suv-for-savings/

Tom Reingold

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Re: Private Vehicle Sale
« Reply #28 on: December 06, 2012, 03:33:06 PM »
Excellent. I really appreciate your followup.