8 Things to Know About Selling or Buying a Car
A while back I wrote a story about Buying and Selling a personal car. But things change so quickly online that instead of just updating it I scrapped it and rewrote the entire thing.
If you've read my About page then you know that I've been working professionally in the automotive publishing business as a journalist and editor for more than 25 years. I've seen a lot of things that people do when it comes to buying or selling a car that concerns me. I think this whole new story might bring clarity to the process. What you will read is based on my experiences and work with others in the automotive field. Of course, you may have other ideas. I'll simply try to point you down the path.
Let me start by saying that I am mostly referring to Private Party Buying and Selling in this story. Not dealerships because that's another 2,000 word report, or more. Let's concentrate on individuals to make things simple.
A friend once told me that she would rather sit in a dentist’s chair than shop for a car. Or, sell one for that matter! When I stopped laughing, I realized she was probably right. Buying or selling a vehicle can be exasperating and kind of scary, unless you’ve done your homework first.
Even with my experience as an automotive journalist, I still benefit from doing the research (and using common sense) when I'm in the market to sell, buy, or lease. The process might not be rocket science, but it does take some "due diligence" to make a transaction turn out in your favor and not get ripped off.
There is a certain amount of caution that you should have whenever you are buying or selling a vehicle. It's smart to be aware of who you are dealing with. For those selling cars, here's a case in point, a Scam that appears often on Craigslist is about a "CarFax report." A CarFax is a complete history report of the vehicle, including important personal information. A CarFax tells a story of the car typically from new to the latest Smog Check and DMV Registration. The Scam goes like this: A unknown person emails, texts or calls you. They want to buy your car. They are really excited and offer you CASH! But they immediately ask for a CarFax report. If you say you don't have one, they are quick to give you a link to a website that offers a vehicle report. They insist this report is the only one they want. However, that link is actually a way for them to steal the information you input to get a vehicle report. It's a fake site. Never sign up for a CarFax or any report from an unknown person or source. The correct URL for CarFax starts with https//... and I've linked it above. https:// means it's a secure website. Don't fall victim to a fake site that is pretending to be CarFax.
CarFax reports tell much about a vehicle. They aren't perfect, but they can tell you if the vehicle you are buying is "clean" or "salvaged." A salvaged title suggests the car was involved in prior accidents or maybe a flood and that it was declared "totaled" by an insurance company. Stay away from salvaged titles unless you know what you are buying. What you need to look for is a "clear or clean" title on the CarFax report. BTW, a smog check in the state of California is the responsibility of the seller, NOT the buyer. Check with your auto club or the DMV for details.
Go online and do a price comparison check of the vehicle you would like to buy or sell. Two sites I recommend are Edmunds.com as well as AutoTrader.com . You want to have a good understanding of how much other people are paying for a similar vehicle. Asking your friend how much to list it for is not a good idea. Do you own homework and then set a price that is 10-20 percent higher than a similar vehicle you are selling. If you are buying a car, go for paying 10-20 percent less than the asking price. 10-20 percent is simply the give and take you should be prepared for in a transaction. It is called bartering, or haggling. If you absolutely need $10,000 for the car, a buyer is never going to pay full asking price. So set it to $11,000 and go from there. Don't feel bad about asking more for your car that's for sale. It's almost expected because no one pays the sticker price of anything anyhow. If you are buying a car, feel free to make an offer from the research you've done and remember you can always offer less without offending the seller. Don't be surprised if the person accepts if it is fair and reasonable. Here's rub: If the car you are buying is so darn good that you can't turn away, then pay just under the asking price if your intuition says so. Don't let a good buy slip away. But don't have an emotional attachment to the car you want to buy either. That always ends up badly.
I can't stress this enough. Stay far away from Craigslist when it comes to buying or selling a car, unless (a big unless) you are very experienced on the site. Many Internet Scams from Nigeria or Russia are on this site. Also, people on Craigslist prey on car buyers willing to carry large sums of money around to buy cars. Just stay away from this site and you'll be fine, there is nothing on Craigslist that isn't on another site like CarGurus.com for instance. If you must use Craigslist because the car is not listed anywhere else, do so carefully. I once saw a vehicle I really liked on Craigslist and went to see it. The seller didn't want me to test drive it, until I insisted, and then it was only around the block. Then he told me he was selling it for his "uncle" who was nowhere to be found. I asked why there was a lien on the title and he said, "don't worry about the title I'm going to pay it off once you buy the car." I got in my car and left. He was pissed. But when red flags start appearing, take that as a hint that something is not right with the transaction. Maybe I missed out on a car that day, but a month later I found a much better one.
If someone wants to buy your car make sure you show it to them in a safe area. Meet the potential buyer with a friend if possible at a Starbucks in daylight, not at night, or at your home if you feel comfortable. People fall victim to crimes when they don't see issues with meeting strangers in strange places. As for test drives, that's where it can get confusing. Is the person going to drive off with your car and never return? The way to do it is to ride along with the person in your neighborhood, or ask for their driver's license and current registration and insurance card. Make a copy of it and then allow the person to test drive it. If you are buying a car, always ask the seller if you can take the car to an inspection station. If the person says no, stay away. Something is wrong with the vehicle that he or she doesn't not want you to find out about. Often these are hidden things that only a good mechanic can spot. The same goes for selling your vehicle. Offer to take the potential buyer to a local shop if the buyer pays for the inspection. Have all of your past service records on hand too. Showing regular oil changes and other maintenance can add lots of value to a used car.
Do not accept personal checks, or money orders or wired payments. The buyer of your car should either bring cash, or should have a cashier's check from a well-known bank. Call the bank and be sure that the check is real before you hand over the keys and title! If you are buying a car from a private party make sure you agree on a price upfront, and the method of payment before you do anything further. Get a cashier's check from your bank and don't walk around with a wad of cash. if you lose a cashier's check or it is stolen, you can always call the bank and report it and they will Stop payment immediately. If you feel uncomfortable about making the vehicle transaction at home, or at the home of the seller, you can always make an appointment with your local auto club like AAA and they will help you along. You can have the person bring his cashier's check or cash there, or you can bring your payment there and proceed to swap titles in front of an auto club representative.
If you are buying a car, never go shopping with a “must have brand new” mentality. Be open to buying a low-mileage pre-owned vehicle with a warranty that’s been inspected and “certified.” New model cars typically lose several thousands of dollars in resale value the minute they leave the dealer's parking lot. You’ll be on the losing end if you sell the car a year or two after buying it. Pre-owned vehicles are much better buys in that regard. If you are considering a pre-owned vehicle understand that there is a difference between a manufacturer certified and dealer certified vehicles. You should know the difference between the two. For example, former rental fleet vehicles (like cars from Enterprise) can only be sold as “dealer certified” and never manufacturer certified. The difference is that if you purchase a dealer certified vehicle you must take it to a particular dealership for all repairs or maintenance in order not to void the warranty. If you are on vacation in another state, for example, and the car breaks down, you cannot have it repaired at the local dealership. You must return to the original dealership where the car was purchased if you want to use the warranty. Whereas, manufacturer certified pre-owned vehicles can be repaired or serviced at any of the manufacturer’s locations nationwide. The next time you see a certified pre-owned vehicle, ask if it’s a former rental vehicle or if it came off of a private lease. Also, most warranties on newer used vehicles can be transferred from party to party once the title has cleared the DMV.
If you are thinking of buying a vehicle from a private party there are many things to consider first. Starting with the reason the seller is letting go of the vehicle. Did it drive crappy? Did it get poor fuel mileage? Consider what the seller tells you carefully. The same goes for selling your car. Be sure to be upfront about why you are selling it. Maybe it didn't have the cargo room you need. If you are buying and the seller avoids answering anything reasonable, then go elsewhere. Don’t be timid about walking away.