How to Buy or Sell a Car
Prepared by ASPIRE at SHS
January 2018
Buying a used car from a private party:
· Decide on the type of car you want: SUV, pickup truck or passenger car; 2-door or 4-door; large, mid-size or compact; old or new, standard engine, hybrid, or electric; automatic or manual transmission; etc. Keep in mind that trucks are usually subject to hard use, so a used truck may have more problems than a used car.
· Review ads daily on Craigslist, in your local newspaper, or on campus bulletin boards
· Take a friend with you if you go to see a car. It’s important to test-drive a car you might buy; have your friend wait for you, and make sure he or she has the license number (the car license plate or the individual’s driver’s license) of the person that takes you for the test-drive (alternatively, you can both go together on the test drive, if you text a friend with the car license number).
· Try not to “fall in love” with any particular car; if you do, you will be less willing to negotiate.
· Find out what’s right and wrong with the car; check the tires for remaining tread, listen to the sound of the engine, inspect the car for cleanliness, etc. If possible, have a mechanic check the car.
· Don’t fall for a scam (like “I’m selling the car for a friend, so the title is not in my name, but we can take care of that after you pay me”)
· Pay for the car by money order; do not pay cash. You can get a money order at a bank or post office. Keep the receipt so you can prove that you paid for it.
· Upon handing over the money order, get the title to the car (don’t buy a car with an out-of-state title). Make sure the title is signed over to you by the person or persons to whom it is registered.
· Take the car with you. Once you’ve paid for it, don’t leave it with the previous owner.
· As soon as possible, take the title to your local state Motor Vehicle office to get the registration put in your name.
· Also as soon as possible, notify your insurance company of your purchase so the car can be listed on your policy.
· Resist the “hard-sell” (like, “you need to buy this car right now because I’ve got three other people coming to look it). That may be true, but you will feel pressured into paying more than you should.
· Don’t pay the asking price. Offer something less, but not a ridiculously low amount.
Buying a used car from a dealer
· Check the same sources as noted above (Craig’s List, newspaper ads) for cars for sale, or simply visit some car dealers near you.
· New-car dealers that have used car lots are a lot more reliable than self-standing used car lots. Used car dealers that operate independently have a widespread reputation for being dishonest, although there are probably some good ones out there.
· Bear in mind that dealers have to make money, so you will be paying more for a used car than you would if you were buying from an individual.
· On the positive side, dealers often thoroughly check their cars and then “certify” them to be free from mechanical problems. Buying a car from a dealer also avoids some of the dangers described above, such as getting a car that’s falling apart. And, the dealer will take care of the paperwork.
· Take the same precautions about test-driving that were described above, although it is somewhat safer to test drive a dealer car than one belonging to a total stranger.
· Expect some hard-sell tactics and be prepared to resist them. Don’t get talked into buying a car that you really don’t want.
· Ask the dealer what sort of warranty comes with the car. Think carefully about whether you really want to pay hundreds of dollars extra for an ‘extended warranty.’ It’s your decision, but just remember that the dealer is in business to make money.
· Consider buying the car through Costco. This will give you a negotiated deal that is about is low as the dealer will go on the price. Go to
https://www.costcoauto.com/enterzipcode.aspx?gotourl=%2fdefault.aspx
Buying a new car from a dealer
· Check the Internet for reviews on a dealer before you go there. Some are honest, some are not.
· Decide what kind of car you want, and if possible decide what special features you want.
· Check the Internet to find out what that car is worth. What you want to know is the “dealer cost” of the car (that is, how much did the dealer pay to the factory for the car).
· The best way to negotiate is to offer $300 or $400 over dealer cost. Ask to see the invoice so you know what the markup is. Many dealers will accept $300 over factory invoice, but not much lower than that.
· Here’s how the game is played at a dealer: 1) you make an offer on a car; 2) the salesman goes into a back room to talk with his boss, and comes back a few minutes later with a counter offer; 3) you lower your initial offer, or stick to it and the salesman goes into the backroom again to talk with his boss; 4) He/she either accepts your offer, or says they just can’t go that low; 5) you either agree to the price, or walk away.
· Try to avoid getting talked into a bunch of features you don’t need or want. This is where the dealers make their money, but it’s not your job to make the dealer rich.
· If you don’t like the negotiating process, then try buying your car through Costco. The website is https://www.costcoauto.com/enterzipcode.aspx? gotourl=%2fdefault.aspx
· If you’re going to finance the purchase (take out a loan), make sure the dealer is giving you the best possible rate. Ask for several quotes on loan rates. The rate will be lower if you have good credit.
Selling your car
· Wash it, wax it, clean and vacuum the interior, and make it look as nice as possible.
· Get the oil changed. That way, if a buyer checks the oil, it will look clean (which helps to show that the car has been well-maintained)
· Decide on a selling price. Go to www.kbb.com to find out what it’s worth.
· Take some pictures of it for advertising.
· Advertise it on Craigslist and campus bulletin boards
· Take some precautions when someone comes to look at it. Before taking the buyer on a test drive, write down that person’s driver’s license number and give it to a friend. It is best to take a friend with you on the test drive, and carry your phone and your pepper spray.
· You don’t have to sell your car to the first person who comes along. Be willing to drop your price a bit, but not too much. If you don’t like the offer you get, turn it down.
· When you do get a buyer, be sure to get payment in the form of a money order or certified bank check. Exchange the vehicle title (be sure to sign it as the seller) for the payment.
· Prepare a letter in advance that states you are selling the car “as is.” Write the buyer’s name and address on the letter along with the date, time, and the car’s mileage. You should each sign it and keep a copy.
· Once the car is sold, your state may require that you notify the Motor Vehicle department. Make sure you do so right away.
· Tell your insurance company that you have sold the car.
· If you don’t want all the hassle of selling your own car, you can always trade it in to a dealer if you’re buying another car from that dealer. However, you will not get as much money for your car this way (because the dealer has to make a profit).