More and more people are being forced to sell their old cars themselves. Before the economic downturn, it was a simple matter of trading your old vehicle in with your local dealer. Now, the added money you’ll receive by selling it yourself is too important to pass up. One of the biggest hurdles private sellers need to get past is pricing their vehicle.
If you set an initial selling price that’s too high, no one will contact you and your vehicle will languish unsold. If you set the price too low, there will be a rush of people wanting to buy it, but you’ll leave your hard-earned cash on the table. Do what professional car dealers do: develop a pricing strategy.
Professional car dealers can’t afford to make mistakes when pricing their used car inventory. To stay in business, they need every dollar the market will allow them to make in profit. That’s why they start with a high price and slowly lower it until their phone starts to ring.
Private sellers can do the same thing. Begin by doing your research. Find out the price that your car should sell for in your area. Check Kelly Blue Book (kbb.com) and pay attention to the Private Party Value. Then go on Craigslist, AutoTrader.com, and Cars.com to see what similar vehicles are being priced at. There will be a lot of dealers advertising their used car inventory. Remember that dealers can charge more than a private seller.
Set an initial selling price on the high end of what is available in your area. Depending on the make and year of the vehicle being sold, I’ll recommend that someone be well above what they can expect their vehicle to actually sell for. This is especially true if you aren’t in a rush to sell it. Then, slowly lower the price, bringing it down each week until the phone starts to ring. When that happens, you’ve hit the sweet spot. The market has spoken. You are now in a price range that captures the interest of prospective buyers.
In a Hurry?
What if you’re in a hurry to sell your car, truck, or SUV? There is a direct correlation between how low the price is and how quickly it sells. In the above scenario, the seller had lots of time and didn’t mind the vehicle sitting for a few weeks while they determined its best price.
However, if you don’t have much time you need to make a guess—a guess based on valid market research, but a guess nonetheless—and try to be on the middle to low-end of how comparable vehicles are priced. Then, see if the phone rings. If it doesn’t start ringing right away, quickly adjust the price down, and keep lowering the price every few days until buyers start rushing to your door.
I go into more detail on how to develop a pricing strategy, along with other need-to-know information when selling a vehicle privately, in my recently released book on this subject. See below for more information.
L. James Johnson is the guy who wrote the book on how to sell your car online: HELP! I Gotta Sell My Car NOW! New Rules for Selling Your Vehicle Online is available at Amazon.com.