I had only nine payments left on my GMC Terrain SUV, but I was leaving L.A. and no longer needed a vehicle. I bought it in 2013, so I assumed I wouldn’t get a ton of cash (age depreciates the value). Also, technology in cars gets outdated fast. That’s why leases have boomed, from 1.4 million vehicles in 2009 to 4.3 million in 2016. Millennials are responsible for that growth, leasing cars more than any other age group (nearly one out of three), since leases also require lower monthly payments and shorter contract terms (think of it as renting) as opposed to buying to own a vehicle, which, in hindsight, I mistakenly did.
I didn’t know the first thing about selling a car in a competitive market, though the process turned out to be a breeze — and I got $15,072 right on the spot.
Here’s how first-time sellers can maximize gains without much effort.
Go online to find the value of your car
Considering my mileage (20,000 miles), a couple minor dents and year and make of my car, I had a rough estimate of what I could sell it for. Friends who had already gone through the experience of selling their cars told me I’d be lucky to get $10,000, so that’s the value I had in my head. Fortunately, that number was a lot less than what online dealerships offered when I went to get a more expert evaluation on the internet.
A good website to check a general estimate is Kelley Blue Book, a vehicle value and research company that uses data based on geographic regions, seasonality and market trends, as well as your car details, like make, model and mileage. Edmunds, a new- and used-car marketplace, also offers an appraisal. There is no fee to get car value from these sites.
Kelley Blue Book valued my car at $14,289, and Edmunds valued it at $14,169. Now that I had an estimate, I was ready to sell. There are essentially three ways to do this: trading it in with a dealer (if you want another car), selling it to a private party or selling it to a car dealership, which I did.
Let technology sell the car for you
It’s true that selling your car to a person rather than a dealer may get you more money since you’re setting the price. I wanted to get the best offer for my car, but I also wanted a convenient, hassle-free experience. Selling your car to an individual requires a lot of work, including researching the marketplace, creating ads, taking stellar photos, constant communication with potential buyers, price negotiations, scrubbing the car spotless and test-driving with strangers.
Also, if buyers had technical questions, I doubted I could confidently respond. I decided to sell to a dealer, which took very little work with Kelley Blue Book.
Once I received my car value, there’s a free option where KBB can reach out to local dealers to let them know my car was for sale (Edmunds and Auto Trader also offer this). It takes one click to sign up and, within hours, I received direct emails from participating local dealers (actual people, not robots) who wanted to make an offer on my car. This included both local, independent dealers and national places you see on TV ads, like Carmax and Carvana. They essentially bid on my car, eliminating any hassle in trying to sell it.
Consider selling your car to a buyer in a city where there’s more demand
You will get a higher cash offer from a buyer in a city with higher demand for used vehicles. Two local dealers in New Orleans (where I was living) offered $14,000. However, I checked to see how much I could get for it in Atlanta, and Carvana Atlanta Midtown offered $15,975. Driving the 469 extra miles (the distance between the two cities) did not affect the value of my car, so I headed there.
Expect to for your car to be scrutinized, which means you may get less than the price you were quoted
After setting up an appointment, I brought my car to Carvana and waited as the inspector scrutinized my car for about 20 minutes with her clipboard. When she returned, she pointed out things that brought down the value of my car. One of the dents was a lot bigger than I had reported in the initial online assessment, she said, and there were visible marks on the interior passenger seat, which I was aware of and did not report.
This brought the total value of my car down to $15,072. It was a $900 difference but still more than I had expected to get.
Scott Wood, a former GM and Chrysler dealer and now director of wholesale operations at Carvana, tells CNBC Make It, “You need to be realistic about the condition of your car. For instance, if it genuinely needs brakes/tires, expect those items to be deducted from the trade-in.” Wood suggests having an independent evaluation, which you can set up at a local auto mechanic shop.
Carvana sent my auto loan company a check for $5,200 to settle the remainder of my car payments in one lump sum, and I received a check right on the spot for $9,872.11. I no longer had to worry about $525 a month car payments for the rest of the year, and I had an extra $9,900 cash.
Sell in spring or summer
US News & World Report says that spring and summer are the best times to sell your car. Over the winter, family budgets turn to gift buying, and cold and gray weather keeps customers at home. Also most people start selling and buying cars in spring, making dealers more willing to buy your car to meet demand.
