Pricing Strategy: How To Sell Your Car Online

One of the biggest issues that private sellers face when selling their car, truck, or SUV is pricing. Price your vehicle too low and you leave money on the table that should have been kept in your pocket. Price it too high and no one calls. What to do?

A Professional Pricing Strategy
Follow the lead of professionals who price a huge number of cars around the country each day. The nation’s car dealers make sure they don’t leave money on the table by pricing cars too low--what some consider to be the ultimate sin of the car industry. They use a pricing strategy to make sure that 1) the market determines the fair value, and 2) they get every dollar possible from each sale.

The first thing to find out is what others are selling similar cars for. Each vehicle is unique. No two used cars have the same miles or are in exactly the same condition. This can make it difficult to assign a value. However, there are so many cars sold in the United States each day that a reservoir of pricing information is available to savvy used car buyers and sellers.

Kelly Blue Book
Begin on kbb.com. Input the details of your car and KBB provides three important values for your vehicle: 1) a dealer’s initial selling price, 2) the private party value, and 3) the trade value. The lowest of these is the trade value.

You'll also have to choose the condition of your car. Try to be accurate. Less than 5 percent of all vehicles qualify for the “excellent” rating. KBB offers a description of each. Choosing the wrong one can drastically alter the price you assign to your vehicle.

The next step is to confirm the value of your vehicle by seeing how other private sellers are pricing theirs. Check online classified websites that are active in your area. Craigslist.org is often a good bet, but in some areas of the country Backpage.com or Kijiji.com are more popular. Perform a search on these websites based on the year, make, and model of your vehicle. Then take into account differences in miles, condition, trim level, and so on.  By comparing these values you should begin to get a sense of the price range you can sell your vehicle for. Make note of the top and bottom end of this range.

Pricing Your Vehicle
In most cases you will want to set your price higher than what you hope to eventual get, and higher than what KBB says the car should eventually sell for. Exactly where you set the price is determined by how much time you have to sell the vehicle. If you need to sell it this week, a price on the lower end of your price range will attract buyers more quickly. If you have a month to sell it, bump up the price to the high end of the price range you’ve found online. Then lower the price each week until you begin to generate interest in the form of calls and emails of people wanting more information, or to see the car in person.

Once your phone is ringing off the hook from potential buyers don’t change your price. Or, if you need to lower it again, do so in small increments. By starting out with a higher price than you expect to get, you are allowing room to come down during price negotiations. You are also allowing someone to simply say, “Yes, I’ll take it.” When they do that you know you have found your vehicle’s fair market value, or what a willing buyer will pay a willing seller.

For a more detailed explanation of how to create a pricing strategy for your vehicle, see my newly released book (see below).

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The author has just released his new book, “HELP! I Gotta Sell My Car NOW! New Rules for Selling Your Vehicle Online.” It’s available on Amazon.com.