Buy and Sell Cars

Buying and selling a car is an experience that most people go through every five to ten years. For many people cars are necessary for their day to day lives, and unfortunately, even the best of cars only last a limited time. When a car gets old and begins to require expensive repairs frequently, most people will look to sell the car privately or to trade it in at a dealership. Soon after, they will look to buy a new car and begin the cycle all over again.


Method 1 of 3: Selling Your Old Car Privately

  1. Investigate what you have. You need to be an informed seller so that you can provide the buyer with what they need to know. The most important information to gather is the car's title, service records and original sales paperwork. This information provides potential buyers with the information they need to make an informed decision.[1]
    • Other details to gather include year, make, model, current mileage, and any special features the car may have.
    • Receipts for regular oil changes are very also important. They show that the car was regularly maintained and help to increase the car's value.
  2. Establish a price for your car. The best way to set your price is by researching the value with Kelley Blue Book. There is a strong chance that a potential buyer will have looked up this number as well, so your figure should not be much higher than this. Setting the price around this level will help sell your car quickly, as potential buyers will know your offer is honest.
    • Many sellers believe their car is worth more than it is. Be aware of this. If you set the asking price too high, it is possible you will be unable to sell your car at all. You may consider having a pre-sell inspection that will give you an exact idea of how much your car is worth.[2]
    • Be mindful of psychology. Many products are priced with a number that ends in 99 or 95, as it makes people more likely to buy. Try this when pricing your car.[3]
    • Price your car higher if it is still under warranty or has new tires.
    • Price your car lower if you are looking to sell it quickly.
    • Build buffer space into the price. In other words, make the price slightly higher in anticipation that you will have to lower the price during negotiations.
  3. Create an advertisement or sell your car online. An advertisement is the best way to let the general public know that you are selling a car. One possible place to advertise is in a classified ad. You may want to consider the possibility of selling your car online. Websites such as ebay or autotrader have sections dedicated to selling pre-owned vehicles.
    • Your advertisement or online posting should include your contact information, up to 15 pictures of the car, your comments about what makes the vehicle unique, and key details such as mileage, price and features.[4] An advertisement including this information will inform potential buyers about all they need to know.
  4. Show off your car and yourself. It is your time to shine when potential buyers come to view your car. Buyers will want to buy a car from someone responsible and honest, so be sure to appear so. Offer them a test drive, and before doing so check that they have a valid drivers license. Be aware that some buyers may want to take the car to a mechanic. If you have a pre-inspection, you can provide them with it to alleviate their worries. Otherwise, this is a reasonable request.[5]
    • Always evaluate potential buyers before showing them you car. Try to screen them on the phone, and if they sound suspicious do not do business with them.
  5. Sell the car. The potential buyer will want to negotiate a final price, so be prepared to stand firm or drop your price a little. You should know beforehand what the lowest possible price you will accept for the car is. If the offered price is too low, be prepared to walk away.
  6. Conclude the sale and draw up a bill of sale. To prevent yourself against any possible fraud, you should go with your buyer to the bank for a cashier's check. You will also need to draw up a bill of sale, which should include a description of the vehicle and its VIN number, any warranty that may have been agreed upon, a note if the car was sold as is, the final price, and the names and signatures of the buyer and seller.[6]
    • Call the DMV to check if your state requires any additional paperwork.
    • Don't forget to remove the car from your insurance.
    • Remove all personal items from the car.

Method 2 of 3: Trading in Your Old Car

  1. Remember there are options other than selling privately. While selling privately usually means 15-20% more money for you, and it gives you the chance to negotiate directly with buyers, it can be a hassle.[7] A trade-in is very convenient. It is quick, and you will not need to deal with emails and phone calls about your car.
  2. Research the value of your car before you go to the dealership. Keep in mind that the car dealership will have experience on their side when it comes to negotiating trade-ins. It is important that you know exactly how much your car is worth before you arrive so that you get the best possible value.
    • You can find the value of your car online at Kelley Blue Book or Edmunds.
    • Experts suggest taking your car to Carmax for a free written appraisal, however. The written appraisal can be shown to other dealerships during negotiation.[8]
  3. Take the car to the dealership and get the best possible price. When you begin to discuss the trade-in with the salesperson, start by telling them that you have done research and know the value of the car. You should also show the dealer your maintenance records. If your car has been regularly maintained the value of your trade-in will increase.[9]
  4. Avoid making mistakes. Experts note that fixing dings and dents it is not worthwhile before trading in your car. Also avoid washing the car before going to the dealership, as this is a sign that you are ready to buy a car that day and gives the dealer the advantage in negotiation.[10]

Method 3 of 3: Buying Your New Car

  1. Start by making a list of your needs. Do you want style, fuel economy, interior space, safety, a car that doesn't effect the environment as much as others, or a car with a specific price. Which one of these factors is most important for you, and which is least important. It is helpful to make a list of your priorities, so you will know exactly what you are looking for.[11]
  2. Begin looking for cars that fit your needs. Visit the websites of major car companies and see what models they have to offer. Some companies to consider include Cadillac, Dodge, GM, Honda, Jeep, Toyota, Chevrolet, Mazda, Mitsubishi, Subaru, Volkswagen, Ford, Chrysler, Volvo and there are many others. Keep in mind that not every car company will have a car that fits you, but most will.
  3. Decide on buying a new or used car. This decision is a personal one. However you should be aware that there are valid reasons for either decision. Experts suggest asking yourself a few questions to help determine whether you want to buy new or used.[12]
    • If you are thinking about a used car, figure out if you can afford the possible maintenance and repair costs that come with buying used. Moreover, are you in a position to handle the time that your car may be in the repair shop?
    • If you are thinking of buying a new car, ask yourself whether you have enough money or trade-in value for a down payment. Also ask yourself if you are willing to take the depreciation hit, as new cars lose value as soon as they are driven off the lot.
  4. Narrow down your list and see the cars in person. Try to come up with a list of 2-3 cars that match your needs. Look up the closest dealership that carries those specific models, and set aside a day to see the cars in person. Talk with a salesperson and be sure to take the car for a test drive. All of these steps will ensure that you are a well informed buyer.
    • When test driving, remember you will be spending a lot of time in this car. Ask yourself the following: are the controls easy to use (i.e. is the steering easy)? Are the seats comfortable and supportive? Does the air conditioning and heating work well? How is the stereo and does it work with your phone or mp3 player? Does the vehicle have enough power to merge on the highway? How does the car take a corner? How is your visibility? Is there too much road noise?[13]
  5. Reflect, make your decision and get the best price. A car is a major purchase, so take time to reflect on the knowledge you have gained before deciding to purchase. When it is time to purchase know exactly how much the car you are buying is worth, and get the most value out of any trade-in. Always ask if there are any rebates available, as dealers typically offer them for students, military, and more.[14]
    • It is best to buy at the end of the month because dealers receive monthly incentives from manufactures.
  6. Avoid paying cash as it is actually not to your advantage. Dealerships would actually rather have you finance, so you can get a better price by financing. Think about talking to your bank about getting pre-approved for the loan you will need for the car, that way you will know exactly what you can afford.[15]
  7. Watch out for tricks. There are several tricks a salesperson may use that you need to watch for. They will try to get you to focus on a monthly payment, when you should focus on the total price of the car. They may also try to give an unfair price for your trade-in.[16] By being well informed, you will be able to overcome these tricks.


  • If your car has a few little things wrong with it that are easily fixed, try to fix them! Believe it or not, this can boost the value of your car when selling privately. Think about cheap fixes, like lights, chips in the windshield and tires.[17]
  • If you are concerned with getting the most value for your car, compare the trade-in value versus the private values on websites such as Kelley Blue Book.
  • Check if their are any tax advantages when you trade-in a car and buy a new one. Most states will allow you to pay sales tax on the value of your new car minus the value of the trade in. This could save you as much as $1,000.00
  • Do you want to buy or lease? With leasing you can drive an expensive car for less money, get a new car every few years, and there are no hassles with selling a car when the lease expires. With buying you have more flexibility, your expenses are lower in the long run, and there are no mileage penalties.[18]
  • Be smart about what you can afford. Buy based upon the total price, not the monthly price.
  • There is no bargaining at Carmax.
  • Talk to your insurance agent to figure out how much the new car will cost to insure.


  • Do not drive away with a car before the sale is finalized with a dealer. You run the risk of being charged a higher interest rate than was agreed earlier.[19]

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