Selling your vehicle -Private, dealer, or auction?

Where to sell – private, dealer, or auction?

There will always come a time when you feel that the number’s finally up, and it’s time to send your old car down the river and move on. Most people tend to grow a bit fond of the thing that’s been getting them around, but it’s only a true romantic, or a confirmed slacker, that hangs on to their car much past the point that they know they should sell it. When the time comes, there are basically three options: sell privately, sell to a dealer, or sell at an auction. We present the benefits and drawbacks of each:

Going with a dealer

If you sell your car to a registered dealer, you will have to accept that the increased convenience comes at the expense of a lower sale price. A rough rule of thumb is that the differential between selling privately and selling to a dealer is about 10% of the value of the car – for a car worth $20,000, for instance, you can expect to receive perhaps $2,000 less if you choose this option.

So it depends. For plenty of people, the added hassles of private selling mean that they will resign themselves to losing out to the tune of a couple of grand in exchange for palming off the grunt work to someone else. It’s no small gain not having to spend sunny Saturdays at home by the phone waiting for buyers to call, or leaving work early to get home to meet someone who never actually shows up.

With a dealer you also sidestep the issue of having to pay to advertise, and the fun and games that are associated with that. It’s never a particularly comfortable experience publishing your details for every man and his dog to read, even less so to have the two of them rock up and spend half an hour strolling round your property like it’s a show home.

You’ll fare better with a dealer if they have an active interest in the make or model that you’re trying to get rid of. If they specialise, for example, in SUVs or in sportscars, and this happens to be what you’ve got, you are likely to extract a better price from them than from the guy who trades any car with four wheels and a gear stick.

It ought to be pretty self-evident that Ford dealers like Fords while Holden dealers prefer Holdens. This is especially true if the make or model is more obscure, which will give you more leverage since supply is more restricted. Toyotas or Hyundais in decent nick, for example, are the sort of bread and butter that almost any dealer will be happy to take on – a Peugeot or a Saab, however, and it’s more likely that you will do better if you find a dealer who trades just in these brands.

Another trade-off for receiving less from selling to a dealer is that there is no need to exert time and energy making sure the car is in roadworthy condition. The dealer will inspect the vehicle, arrange a price with you and complete the sale, and from there it’s up to them to worry about bringing the car up to scratch. It is a lot easier this way.

On rare occasions, this can also mean that it’s financially preferable to sell to a dealer, since the cost of repairs to get the car in the shape that private buyers usually demand can (only rarely) outweigh the one or two thousand you forego when using a dealer. It is worth emphasising just once more that this is a rare situation – it’s the dealer’s job to assess wear and tear and costs, and unless they miss something, they’re going to adjust their offer to incorporate repair expenses.

If your car does have faults that need seeing to, and you’re going the dealer option, don’t waste your time getting them repaired yourself. Because dealers operate at trade rates, they can get the job done at a much cheaper price than you can. Leave it to them.

Last of all, avoid the temptation to try to take the dealer for a ride. This is their job, and you’re just going to be the latest in a long line of shucksters and wannabe conmen or women trying to pull the wool over their eyes. Be up front and truthful, but don’t let them walk all over you. If you suspect they’re playing you, lay down the law. You can always go to the dealer next door.

Selling privately

A private sale is usually the most financially rewarding sale option, an important consideration given that it is the income from the sale of your old car that will presumably cover the majority of the cost of purchasing its replacement. You should always make more money from a private sale than what you would get if you involved a dealer – as with any transaction that makes use of an intermediary, the dealer takes their profit from the financial sacrifice that both buyer and seller make. Not only do you stand to make less from an exchange involving a dealer, but the guy or girl buying the car will be paying more at their end as well.

As a private seller, you don’t have to cover overheads like statutory warranties and the lease on the car yard, and you’re not paying off your mortgage and feeding your family with the income, so you can afford to charge a lower price than a dealer would. Therefore, many of the people that contact you expressing interest are probably trying to root out a bargain.

There is generally going to be a fair bit of work involved in getting the presentation of your car to a level that most private buyers will demand. Visuals are all important. Any exterior defects must be seen to, and the vehicle ought to be spotless both inside and out (it’s probably worth getting a professional in for this). It needs to look as if it is totally flawless.

In the eastern states, you must also provide the buyer with a certificate of roadworthiness indicating certain basic safety criteria have been met.

As a private seller, you are going to have study the market a little bit to figure out an appropriate asking price. In days gone by, that would entail buying magazines and scanning the classified sections of newspapers, and then tooling around from seller to seller to get a feel for the prices other people were charging for similar vehicles. In these enlightened times, however, the internet provides a simpler alternative. There are almost too many classified ads and car websites to choose from, so just select a couple of sites and start comparing. Pay close attention to details such as age and model to ensure that you’re getting accurate pricing information.

The asking price is important – if you go too high, you’ll scare potential customers off, but too low, and you may as well be giving the car away. It’s the most important detail in whatever advertising you choose to use. The cost of this can start to add up pretty quickly if you go a couple of weeks without much interest, so make sure you get it right the first time by doing your homework and devoting a little time to put together a decent write-up.

The major worry with a private sale is that if you advertise your car, there are always going to be certain people looking to take advantage. We’re talking thieves and burglars. It isn’t unheard of that one of these less upright citizens calls up about a car, comes out for a look at it and then says thanks but no thanks, all polite like. Having cased the property and its contents, they then come back later and make off with the car in what is a very one-sided transaction. You should bear this possibility in mind, and be on your guard against it.

Selling at auction

Until fairly recently, buying at a car auction was more of a game of chance than it was worth, and so few buyers were interested, and consequently it wasn’t a great way to sell either. These days, though, the picture has changed a bit.

While it is probably the case that you’ll be dealing with a different sort of buyer at an auction, it’s not as if that really matters – they still pay in dollars and cents. On the other hand, auctions can offer terrific exposure and generate serious interest before the sale actually takes place. A lot of the bigger places maintain their own online presence, and the majority of the vehicles these auction houses take on will be posted on the net for the perusal of the more dedicated bargain hunters.

In addition to this, it’s not unusual for upwards of 200 people to drift through a large auction house each day before the sale, and with up to a thousand punters being pulled in on the sale day itself, you’re guaranteed an audience of a couple of thousand prospective buyers. You’re pretty special if you can generate this much interest selling it yourself.

Most places will look after the bureaucracy so that you don’t have to, and a decent auctioneer will also guarantee clear title on any car that comes through.

When you sell at auction, you determine the reserve price, below which no offers are accepted. It is general practice to allow you to direct the auctioneer to pay out any finance for you and give you the difference, which removes more complications associated with the other options.

Some auction houses like to make a full engineer’s report on every car they deal with, included in their selling fee. Although this is directly a benefit for the buyer, it’s certainly true that whatever makes them feel more comfortable with a purchase has to be equally positive for the person they’re buying the car from. That’s you, buddy.

If you’re selling a specialty vehicle, like a vintage motor or a sports car, it is advisable to find a specialty auction house and talk to them. Apart from that, in the remainder of cases the cars that fare best at auctions are decent vehicles that are presented well. What the consumer wants, the consumer shall have. What they generally want is a solid product that they have confidence in – supply and demand sees to the rest.

The big concern with selling at auction is that if the vehicle fails to sell when the hammer falls, you have no opportunity for a negotiated sale subsequently. This is the law, and there is no getting around it unfortunately. The temptation, as a result, is to lower the reserve price to guarantee a buyer, in which case you risk cheating yourself of the car’s full value in your efforts to make sure it sells.

The other potential drawback of auction selling is that punters at an auction just do not want to know about a car that doesn’t have registration. Even if the auction house inspects and certifies the vehicle, a lack of registration still means you are hamstrung come sale day.

The qualifier to all of this, as you are no doubt aware, is that every auctioneer is different, and the best thing is to do your own research before making a decision. Although some sellers would do better to plump for one of the other selling options, auctions are an increasingly advantageous choice when selling your car.

In conclusion

The final analysis of the three choices that sellers face splits like this. Selling to a dealer removes most of the inconveniences typically associated with selling a car, but your wallet will take a hit as a result. Private sales will bring you the most financial gains but entail rolling up your sleeves and doing some prep work. Going through an auction house, meanwhile, can be something of a gamble, but its increasing popularity with buyers and sellers means that it represents a more attractive alternative now than it formerly did. Ultimately, the choice comes down to your individual circumstances – just try to remember some of the information above and you ought to be fine if you do your homework.