Details of selling a newer car?

TL;DR version: Never sold a car that someone couldn't pay cash for; never had to deal with a lender of my own holding the title. Howzis work?

Until I bought the WRX, I'd never bought a new car, and I'd never taken out a car loan.

With a year and a half of age and under 16k on the odo, I suspect the next owner will be financing the purchase of my car...

How does a private party sale work when you can't count the C-notes without running out of fingers?

Obviously, the holder of my loan needs to get paid, and new buyer's lender needs to get the title.

When you put this on top of the general pain of showing/selling a car, it makes doing the credit union's auto-concierge thing for this sale and the next purchase awfully compelling, since I'm sure they have all the paperwork well sorted and can deal directly with my lender.

On the other hand, we're also looking closely at a couple of lease deals (Leaf, Volt), and while I'm sure those dealers could do the same, I'm more concerned about getting hosed on trade-in when working with a dealer... (Probably over-optimistic about the auto buying service's model being built on cutting overhead and bargaining BS)

Then there's the question of what it's worth on the open market, as a trade-in, or via the auto-buying/selling service. There's only one comparable car on the local CL, and it's on a dealer lot (and a 2011 rather than a 2012, and has 35k miles to my 16k).

I have only sold one car privately that I still owed money on but it wasn't much. I had the purchaser just give me a deposit of what was owed to the bank, went and paid off the loan and got the title, the next day they came back with the rest of the money and picked up the vehicle. There has to be good level of trust with the players, as one of you has a car with no title and the other has a expensive piece of paper for a little while. Check with your lender and they can tell you what the process would be. This might be tougher if the pay off is say half what the car is worth. I tend to trade cars in if buying from a dealer nowadays, as the hassle of not having to sell the car is often worth the difference between trade in value and what I might be able to sell for. But for a car in that is in demand, you might be able to sell it quick and get a bit more for it. Try running a CL ad for a few days and see what the response is. If you have any luck its sold. If after a couple of weeks nothing is happening trade it. Good luck

My understanding is that if you get a loan to purchase a car that has a lien on it, the check from the bank should be made out to the lien holder. Then once the bank pays off the loan, you get whats left and the new lien holder gets the title until the car's paid off by the new owner. Someone correct me if I'm wrong here.

Thanks, guys... Found another guide here... cars.com, but actually linked from my lender...

Sounds doable, but like enough of a pain to make trading it in compelling. OTOH, I should probably try to make sense of how much money I'd be leaving on the table, if any...

You know, i never noticed before but i wouldnt be exactly sure how to do that either and i've sold probably 20 cars in my life. Now seems like a good time to bring up my general dislike of financial institutions and say GOOD RIDDANCE, DIDNT WANT NUTTIN TO DO WIT DEM ANYWHO!

What do you mean by leaving money on the table?

I did it awhile back, the guy met me at my credit union with cash, paid the lein, rest went into my account. Pretty simple process.

Vigo wrote: What do you mean by leaving money on the table?

I just mean that I am not a professional bargainer, and selling to an institution whose job is to make sure they pay me less than what they can get for the car so they can make a profit suggests that they'll succeed... I mean, I do expect them to pay me less than they can sell it for, that's just their business. What I mean is that without hard data, I don't expect to be able to get from them what I could selling it myself, or worse, even be able to get what they would really pay if I were better at this whole auto sales thing...

I bought this car with the intention of selling it before very long (though I was originally thinking ~3 years), and so I've been taking it to the dealer for oil changes (cringe) just because I want to have that quasi-unicorn of a completely unmolested, stock, well-maintained, documented WRX on the assumption that it would sell for something of a premium.

It appears that the resale on a 2012 is pretty darn strong anyhow (though I don't have many data points), and I'm not sure the pain of dealing with a private party, having them deal with my lender (Capital One, so I can't take the buyer into their office to do the transfer in person) and so forth is worth it. I have not yet put a dollar value on not having to deal with it, made harder by not knowing the scale of how right or wrong this could go. i.e. if I knew I could sell it myself for, say, $25000, would I take $24500 from a dealer to be done with it? Doesn't matter, I don't know what I can get, so picking an arbitrary "it's worth $500 not to berkeley with it" isn't really viable.

I feel like I probably did a crappy job of bargaining initially, and with a lack of hard data for what it's really worth, and what its replacement is worth, I feel like I'm likely to get taken a bit coming and going.

If we end up going with the TDI, I'll be strongly tempted to use my credit union's service both for selling the WRX and buying the TDI, effectively trading it it. If we do a lease, I think I'm stuck dealing with the local Chevy or Nissan dealer (if we end up going with Volt or Leaf) for at least part of the transaction...

Sorry for the long and rambling answer...

If you can sell it for $25k, the dealer isn't going to give you $24,500 for it. They're going to give you thousands of dollars less than what you can sell it for privately.

Sorry for the long and rambling answer...

I like detail. Unfortunately i dont have any tricks for figuring out the tipping point is for whether it's worth the hassle versus letting a dealership buy it. But you should be able to get a pretty good idea of the car's top dollar worth just with internet research.

docwyte wrote: If you can sell it for $25k, the dealer isn't going to give you $24,500 for it. They're going to give you *thousands* of dollars less than what you can sell it for privately.

Is it as simple as that? They don't make a chunk of what they make off of being able to sell it higher than private party, making their money off a combination of that and off of the sale of the replacement car?

If it is that simple, why on earth does anybody trade in their car? The difference between private party sale and trade-in would dwarf any gains in bargaining on new car price or end-of-month specials...

I'm not saying it's not true, it's just such a horrible notion...

The reason most people don't sell their cars on their own is it is a PITA if it is a popular car and a royal PITA if it is a dog. Do a NADA and KBB search of your vehicle and get the trade in values and private party sale values. It will take about a half hour of your time. Those two are usually the guides the dealers use. See what the difference is between trade in and PP sale. Figure at a minimum you will spend a few hours if not days messing around with people who say they will come look at the car and then don't show, taking phone calls from people who will offer pennies on the dollar for your car sight unseen and if you are lucky someone will offer you 75% of your asking price. Then decide if the difference between the trade in price and what you might sell it for is worth not having to do anything other than hand your keys over to someone and get a new set of keys in return. The one advantage I see that you should have is that the car is a desirable car and the car is in better than average shape and in theory it could sell quickly for a reasonable price. If you decide to sell your self be ready to take any offer above what the trade in value would be. Also check with your state rules about private sales. In MA the seller has to inform the purchaser of any known problems (in writing to cover your ass) or the purchaser can come back for up to 30 days and ask that repairs be made or to refund the purchase price and take the car back. another item that may sway your decision.

I'll illustrate this for you. In 2012 my wife decided she wanted a new car. When the Boss says that, I get her a new(er) car!

So we find a nice 2008 Lexus GX470, 40k, CPO'd, new battery and tires. Just for giggles I offer her current ride (2005 Audi A4 avant, in good shape, but not perfect, book says it's worth around $12,500) for trade, figuring if they give me $10k for it, the tax savings on the new car and my PITA savings make it worthwhile.

They offer me $7500. I was blown away and I pointed out they were way off base. That got me a shrug and a slight smile.

I sold the car myself in under a week on Craigslist, got $11,500 for it. Went back to the dealer, slapped the cash down on the table and said, "Here's what the car was worth!"

So, yeah, the dealer isn't going to give you nearly what you can sell it for. Most people just don't want the hassle. I tend to price my cars a little under market value just so they sell fast and I don't have to deal with too many tire kickers. Generally the first person who sees the car buys it.

In reply to docwyte:

Thanks! That's a pretty graphic illustration...

I was looking at used cars in the 4-5 year old range last year. A few guys had loans on their cars and told me they would sell me the car and mail me the title in a few days. There is no way I am leaving a pile of cash and taking a car without a title - unless it is family or somebody close I know.

In reply to Datsun310Guy:

And fair enough!

One of the things that would be a pain about this is having to use an escrow service (and having to explain to potential buyers about having to use an escrow service)...

OTOH, it's looking like that may be a difference of thousands of dollars, which may be worth dealing with it for. That's a lot of money.

I'm probably going to have to go back to the original dealer to get a copy of the extended warranty paperwork so I can get the details of how it transfers (it does), and also how to do the prorated refund it offers if the buyer doesn't want it. As part of this ordeal, they of course want to talk about taking it as a trade-in (they're also a VW dealer, so if we did go TDI, they could do that). That at least hopefully gives me a number which to beat with private sale by enough to be worth it.

I'm also waiting for a call back from my credit union's buying/selling service about selling the WRX through them, so then I've got two points for what I can get for it the easy way. Ebay completed stuff suggests it's worth at least $24k, and as much as $26k via private sale.

Buy low, sell high. Dealers are in business to make a profit, so they will offer low and then resell and make enough money to stay in business, so that when you decide that you want to browse a lot you can and you don't have to count on all of those reliable CL sellers

Dealers also assume a lot of risk. They are buying your car, and whatever ills it has that you know about and they don't. So they have to pad the price enough to give it a full detail and fix whatever it needs so that when they resell it, it is "right" for the next owner who expects the used car to be perfect.

I don't like it, but I also don't begrudge them for it. They provide a service to those that choose to use it.

In reply to Datsun310Guy:

When I sold an Audi back in 2002, the buyer didn't make the check out to me, he made it out to the bank for slightly more than the pay-off amount and the bank refunded me the difference. We wrote up a bill of sale for the car that we both signed.

I don't remember (this was 11 years ago...) if the bank sent the title to me or directly to the seller, but I think it was the former and I mailed it to him via registered mail.

glueguy wrote: Dealers also assume a lot of risk. They are buying your car, and whatever ills it has that you know about and they don't. So they have to pad the price enough to give it a full detail and fix whatever it needs so that when they resell it, it is "right" for the next owner who expects the used car to be perfect.

This is also true. The dealer that sold me that Audi likely lost a fair amount of money on the sale since they had to pay an Audi dealer to fix a botched timing belt job that self-destructed during my drive home.

ransom,
I've done this many times...sold a car that I had a loan on. It's really not that big of a deal. Yes, usually the buyer has had a loan also. Just make sure the buyers' lending institution communicates with your bank and it works out fine. If the buyer has a bank check, I just usually meet them at a branch of my bank and have my bank verify everything first. I make sure it's clear to the buyer that he won't get the car until the funds are clear. Also, you can usually get a good feel for the buyer and if they're legit. I've never had an issue.

Yes, dealers will offer you thousands less for the trade. The only way they'll offer you close to full market value is if you pay thousands over market value for the car you're buying. The reason people trade cars in is to avoid the hassle of selling themselves, plus the tax benefit. For example, I traded my 2009 Mini Cooper S in about a year ago. I tried to sell it privately. Had a few nibbles, but nothing serious. I was trying to sell it so I could get my wife a new car. We found something at the dealer she liked. It had been on their lot for a while, so I negotiated the sale price of the car before even mentioning I had a potential trade in. Then I let them look at the MINI. At first, they offered me $3000 less than market value on trade. I simply said "No thanks, I'll walk away from the deal". The sales guy brought his manager in and they raised their offer by $1300, so it was now $1700 less than market value. Sure, it wasn't market value, but after I factored in the tax money I was saving by trading it in, my net loss was somewhere around $800 vs. if I had sold it privately. i.e. the amount they gave me on trade came off the sale price of the new car, so I paid less in tax. To me, it was worth it to just be done with it and not deal with a private sale.

The current owner of the car always gets the title, even after the buyer pays off the loan. That's because the seller has to sign the title, then forward it on to the buyer.

Only way to avoid that is if the seller and buyer both go the bank where they physically keep the title, pay the loan off, the seller signs the title and gives it to the buyer.

If the buyer is going to have a loan on the car, then the two banks basically handle the transaction..

I've used this link in the past.

http://www.cudlautosmart.com/Research/TradeInValues.aspx

It has a link/portal to the Black book value. I've had a dealer friend confirm that the values in this portal are the same as the Black book report they receive. It looks like your looking at ~23,000 for Trade in for your mileage unless yours is a premium with navigation.

Thanks again to everybody for the info and links... I started this thread with questions about the process and a lot of worry, but at this point feel like I actually have half a clue about what I'm likely to get (which I'm about to either confirm or have shattered) from a dealer, and what I'm likely to get doing it private party.

It looks like the difference could be as little as around $1k. As much as I hate the idea of saying it's worth a thousand dollars to me not to deal with CL, Ebay, escrow service, etc (there is no local branch of my auto lender), I think it may be worth it. We'll have to wait and see what the trade-ins come back as. I wish I wanted another Subaru; there's a guaranteed trade-in deal only a few hundred below what I would consider a reasonable retail value...