How Selling a Car Works

By: Allison Klein

­How long have you been driving around in that same old car? Do you think you want to sell it? There are some decisions you will have to make before you decide to sell your car. Do ­you want to sell your car over the Internet? On an auction site? Through a newspaper classified? To a dealership? The following information will apply no matter how you decide to sell your car.

Before you sell your car, one of the main things you need to understand is your market. Knowing what kind of person would be interested in your car will make it a lot easier to know where to place your advertisements. After you've done your research on the price of your car, you will determine an asking price and write an attention-getting advertisement. You will need to prepare for the sale by washing and detailing your car. It is also important to understand how to negotiate to get the best price, and what to do if you get caught in a car-buying scam.


In this article, you will learn what to expect of the car-selling process to help ensure that you and the buyer have a positive experience.

The first step in selling your car is to know your market. In other words, is your car a popular model that buyers will be interested in? Will you have to drop your price to sell your car because it is not in high demand? Knowing the market -- the potential buyers -- will help you answer these questions.

The more you know about the kinds of people interested in your type of vehicle, the better able you'll be to reach that audience. For instance, if you are trying to sell a convertible, you will want to advertise in the warmer months when people really wish they could put the top down. The same goes for sports cars, which normally sell better in the summer months. If you are selling a family sedan, you will want to reach suburban families possibly by placing an advertisement in the local Sunday paper.

Knowing as much as possible about your car and the prospective buyers can save you time and money. It will help you get the best price whether you are selling your car yourself or trading it in at a dealership. According to, family sedans and sport utility vehicles (SUVs) are always in pretty high demand. Trucks and vans that can be used for work purposes are steady sellers and should command competitive prices. Be careful not to underestimate their value.

Finally, use the Internet and local classified ads to find out how many similar cars are on the market. When comparing your car to similar cars listed for sale, you will want to take into account factors including the car's age, condition and mileage. Remember that cars with less mileage will sell for higher prices.

Pricing Your Car

Online ads make it easy to see what other people are asking for the same type of car.
Online ads make it easy to see what other people are asking for the same type of car.

­T­he most important thing you must remember before you decide to sell your car is that you generally can get a lot more money by selling the car yourself than by trading the car in at the dealership. If you do decide you want to trade in your car at a dealership, beware of two things: a very high trade-in value and a very low one.

According to, when a dealership offers you a high trade-in value for your vehicle, it will most likely use the price against the purchase of your new car. The dealer will cover the loss on the used car by making you pay a higher price for the new car. Thus, you won't be saving any money. If the dealer offers you too little for your trade-in, it may suggest that you're getting a low price for the new car. Remember that you can negotiate a fair trade-in price at a dealership, but know that you will probably get a higher price selling the car on your own.


The best way to price your car is to know what other sellers are asking by looking at online ads as well as print ads.

You can also find the suggested retail value for your car. The best way to find out this information is by using a common reference guide such as the Kelley Blue Book or the NADA Gold Book, which are available in the reference section of most libraries as well as online (including at These books include domestic and foreign cars that are 21 years old or newer.

Another good way to determine a car's price is to find out what wholesale price dealers are paying for your car at auction. The Black Book is one of several guides that provide this information. Black Book features wholesale prices on used cars and motorcycles from as early as 1946 to the present. With all this information in hand, you will be able to determine a fair and reasonable asking price for your car.

Finally, be sure to leave a little room in your asking price. In other words, ask for slightly more money than you are actually willing to accept. For example, if you want to get $15,000 for your car, you can list the car at $15,500. Then, if you have to go lower in price, it won't be a big loss. After you've decided on your asking price, it is time to make your car attractive to buyers.

Clean it Up

Give your car a good cleaning so it makes the best impression possible.
Give your car a good cleaning so it makes the best impression possible.

­The most important thing when a buyer comes to look at your car is that the car makes a good first impression. There are some things you can do to make sure you and your car make a good impression on a potential buyer.

  • Wash, wax and detail the car.
  • Have a true picture of your vehicle's condition by having it inspected or getting a mechanic's opinion.
  • Have any maintenance records or mechanic's reports ready to show buyers.
  • Consider making low-cost repairs on things like dents, dings and scrapes, as well as small mechanical problems, rather than selling the car "as is."
  • Take all your personal items out of the car. If a buyer wants to go on a test drive, you don't want the car cluttered with stuff.
  • Don't forget to clean off the wheel covers and wash the tires.
  • Clean the windows and all mirrored surfaces.

­You should expect potential buyers to investigate the car fully. If your car is in the best possible condition, you will have a better chance of enticing potential buyers.


Now that your car has been inspected and cleaned from top to bottom, you need to get the word out to prospective buyers.

Getting the Word Out

­S­ome people sell cars by word or mouth, but you may not find too many buyers within your circle of friends and family. That is why you have to advertise. There are a variety of places where you can advertise your car. Remember that some ads, such as those in the newspaper, cost money, while others may be free.

Here are some markets for advertising your car:


  • Online classifieds such as, or, where you can reach a geographically large area of buyers
  • Local newspaper classified ads
  • Local weekly papers and free newspapers, often found at supermarkets
  • Bulletin boards at supermarkets, libraries and college campuses
  • A ­"For Sale" sign in the car's window with your contact information

­It will probably benefit you to advertise in more than one place. Remember that once you place your ads, people will begin calling to inquire about the car. Many people are hesitant to leave messages, so do your best to answer any incoming calls.

Deciding where you want to advertise is one piece of the puzzle. The other piece, of course, is what to say about your car. To attract buyers to your advertisement, you will need to include your car's characteristics. These include the car's make, model, year, color and special features. You can check out other ads to use as a model for your own.

There is more to a winning ad than car specifications. Your ad should emphasize the most important selling points of the car. For instance, if the car has low mileage, say so! Use the selling points that first attracted you to buy the car. Is the car very reliable? Does it use fuel efficiently? These benefits should be emphasized in your ad, but only if they are truthful. Avoid exaggeration.

Finish up your ad by listing an asking price. (Some sellers choose not to list a price. This will result in a lot of phone calls from people asking for this information, who may not be looking to pay what you want for the car. It may just be easier to list the price in the ad.) Include your contact information and wait for the calls to come rolling in.

Making the Sale

When you close the deal, be sure to fill out a proper bill of sale.
When you close the deal, be sure to fill out a proper bill of sale.

­The rules regarding the sale of vehicles vary from state to state. Check with your Department of Motor Vehicles for the laws in your state. Once you have the money from the sale, you will record the odometer (mileage) reading and sign the car's title over to the buyer. The state will issue a title for the new owner.

Next, you make out a bill of sale and make copies for both of you. The bill of sale should include:


  • Names, addresses and phone numbers of the buyer and seller
  • The vehicle's make, model, year, mileage and Vehicle Identification Number (VIN)
  • The full sale price and how it was paid
  • A statement that the car was sold "as is," meaning there is no guarantee or warranty (unless you arrange otherwise)
  • Both buyer and seller signatures with date of sale

Make sure you and the buyer have filled out all the forms your state requires, including smog and lemon law certification. Finally, cancel your insurance, remove the plates and registration tags and turn over the keys to the new owner.

Following these simple steps will help ensure that all parties are satisfied with the sale.

Avoiding Scams and Post-sale Problems

­­As­ most of us know, used-car buying is a business wrought with scams. Well, used-car sellers need to be aware of potential scams, as well. Here are some of the most common ones:

  • Certified Check Scams - This scam is often perpetrated on sellers of used cars over the Internet. A buyer indicates that he wants to buy the car and pay with a cashier's check. At the last minute, the buyer creates a reason why he needs to write the check for more money and have the seller wire him the difference. The check turns out to be a fake, but it is often discovered long after the seller has wired the money. In addition, the seller is responsible for covering the money for the fake check. To avoid check scams, call the issuing bank before you accept the check and wait for the check to clear before you transfer the car into the buyer's name.
  • Bogus Escrow Services - Online car sellers often use escrow services, which collect and verify payment from a buyer. The money is held by the service until all parties are satisfied with the sale. There have been some instances of phony escrow services operating on the Internet. Make sure you check out an escrow service.
  • False Auctions - eBay and other sites like it have become very popular, but this does not mean that buyers and sellers can't be swindled. In fact, according to the Federal Trade Commission, the most frequently reported Internet fraud occurs on auction sites. Make sure you carefully research the buyer and his buying history. Never ship the vehicle before the money has been received.

­The best way to avoid most scams is to make sure you never transfer ownership of your car until you have the cash in your hand. That means, you either get cash from the buyer or wait for the cashier's check to clear. Avoid taking personal checks and allowing buyers to pay the car off over time. If you follow these few precautions, your car-selling experience should go smoothly.


Finally, you might be wondering, "What do I do if I'm not satisfied with the sale?" If you feel that you have been taken advantage of, there are several things you can do. First, you can contact your local police department and file a report. Then, contact the consumer protection division of your state's Attorney General office. If you have been a victim of Internet fraud, you can contact the FBI's Internet Fraud Complaint Center or the National Fraud Information Center.

As the seller of the car, most states do not require you to offer a warranty on the vehicle. Thus, if the car breaks after you have sold it, you are no longer responsible. To avoid problems, make sure the car has been inspected by a mechanic. If you are open about the condition of the vehicle, you can feel confident that you have done everything you can do to be a successful car-seller.

Selling a car should be a good experience for both buyer and seller. In the ideal situation, everyone gets what they want: The buyer gets a new car, and the seller gets an acceptable amount of money. Making sure you know your market, get the word out with a good advertisement, negotiate for your best price, finalize the sale and know what you can do if things don't go well should make selling your car a positive and uncomplicated experience.

For additional information on selling a car and related topics, check out the links on the next page.