Are we there yet? Yes we are – we’ve reached the final part of our Choices series, examining the big decisions you have to make when researching, shopping for, buying, owning and ultimately selling a car.
Check out the Read More links below to see the first 10 parts. This week we’re looking at how best to sell your car when you’ve decided to move on to your next purchase. Do you look after the whole process yourself and sell privately, get a dealer involved – or do something in between?
Private sale
The old adage that you’ll get more money for your vehicle if you sell it privately is still pretty much true. If you have the time to invest in listing a car and waiting for the right buyer to find you, you’ll maximise the value of your car.
- Part 1: Buy new, used... or 'nused'?
- Part 2: Should you buy or lease?
- Part 3: Petrol or diesel?
- Part 4: Tips for insuring your vehicle
- Part 5: Online car buying vs purchase in person
- Part 6: Dealer or dealer? They're not all the same
- Part 7: Navigating accessories & upsells
- Part 8: Servicing, dealer or private?
- Part 9: Is driver training a must-do?
- Part 10: Repair those dings or sell as-is?
There’s still opportunity cost in that of course: you have to get the car ready for sale, find the right forum to advertise it and when you’ve got interested parties, there’s still the potential hassle of tyre kickers and test drives.
But there’s a lot less of that with online listings (naturally we’d strongly recommend listing your vehicle on DRIVEN.co.nz). Online, you get to showcase your car to the maximum number of people, they have a really good idea of what’s on offer and by the time you actually get to one-to-one contact, you’re potentially well on the way to a sale.
You can also go the old-school route and simply park your car in the street with a “For Sale” sign in the window and your contact details. But if you do, check local bylaws about the legality of privately advertising a car on public streets; different councils have different rules. In Auckland for example, you can advertise your car on the street if it’s parked in an area with no time limit and is being used for day-to-day travel.
And don’t forget the rest of your legal obligations when selling a car privately. While the Consumer Guarantees Act doesn’t apply for a private sale, all fees and fines relating to the vehicle must be paid up and the Warrant of Fitness (WoF) must be less than one month old when the new owner takes possession.
Dealer or trade-in
If you’ve already identified your next vehicle at a dealership, you might consider simply trading in your current car for the new one; that means the dealer will take your old wheels, you’ll drive away in the new car and you pay the difference.
The advantage is that it’s a no-fuss transaction – you simply go from one to the other.
The downside is that generally you have less bargaining power with a trade-in than if you simply roll up with a fistful of ready money - but depending on the market situation it’s also possible that the dealer might really want your old car (there’s a shortage of good-quality, late-model used cars at the moment, for example).
Trading in does require a slightly different mindset because it’s as much about the changeover price as it is the actual value of your outgoing and incoming cars. So even if trading is your preferred no-hassle option, still go in with a good idea of what your car is worth; a dealer might be giving you an attractive price on your trade-in but not moving on the new vehicle, or alternatively giving you a bargain on the new car but offering you a more modest deal on your old car.
In the end it might not matter, because that changeover price could be the same – but it pays to be aware of the equation at work.
Auction or on-behalf
Think of an auction house as a hybrid selling experience. You’re technically selling the car because you retain ownership until you sign it over to the successful bidder, but you have industry professionals working hard and reaching an eager audience to get the best price.
There’s still some admin to do. You’ll probably have to take your car into the auction house to have it appraised before the process can begin and of course you’re counting on getting a higher-than-average price for your vehicle because there will be fees to pay: usually an entry price, often a flat fee for the auction (a few hundred dollars) and then a small percentage of the sale price (typically 5-6).
Dealers will also sometimes sell a car “on behalf”, meaning they’ll hold your vehicle on the yard and show it to prospective customers, while you retain ownership until the actual sale.