Knowing the value of your car is one thing, but pricing it for private sale is another art. If you price your car correctly, you will not only have a more pleasant selling experience, but you will also get more money for your efforts.
Here are eight things to keep in mind when pricing a car for the private market.
Know the market
Read our How much is my car worth? This article shows you how to research a car’s current value – and the variables you need to consider.
This will help you get an idea of the value range – the minimum price others are selling your car for, versus the maximum price some speculators are offering.
Know your minimum acceptable price
Only you can determine this, but it should fit within your vehicle’s value range.
Think about how much time you have to sell the car.
If you are not in a hurry, you can price the car a little higher.
If you have prepared your vehicle properly and took some great photosYou should price a little higher anyway – a great ad will attract more buyers. If you’re in a hurry to sell, you should price the car lower.
Consider the variables that affect your price
We’ve covered these thoroughly, but you need to consider other variables like roadworthiness (if you live in Victoria, Queensland or the ACT). For example, Victorians may decide to sell their cars without a roadworthiness certificate, putting the burden on the buyer. But that means the buyer will expect a discount, so you should price your car lower accordingly.
How much rego does your car have? If it has just been registered for 12 months, you can value it higher. If it has only been registered for one month, you will have to value it a little lower. Unregistered cars are worth even less.
Some cars need major servicing at certain intervals, like every 100,000km. Have you had this done recently – or spent a lot of money on servicing in general? This means you can also price the car a little higher.
Allow negotiation
When selling your car privately, expect buyers to haggle – it’s human nature to want a good deal. So, it’s a good idea to make a tentative offer. Depending on the value of the car, as little as a few hundred dollars should be enough to settle the matter.
Set your starting price
Once you’ve considered all of the above, you can put your car on the private market with a starting price – and hopefully wait for inquiries.
If you get inundated with requests, you might consider raising your price a little, although this is a bit of a bummer for the seller. So it’s important to set the right price from the start – and raise it a little if you have time.
How to bargain
Haggling is a strange dance – or a dark art – but if you’re prepared, both parties can come out on top. One big advantage of selling your car privately, rather than to a dealership, is that you’re negotiating with another member of the public (rather than a professional salesperson). It’s a more level playing field.
When a potential buyer comes to see your car, you will have two prices in mind – the advertised price of the car (say $22,500) and the minimum price you are willing to accept (say $21,000). Never reveal this to any buyer.
Don’t reveal that you’re willing to negotiate – let the buyer make the first move. They may not want to negotiate at all and will only offer you $22,500 – in which case, great! However, if they indicate they want a lower price, invite them to make an offer or the first move. If they ask, “What’s your best price?”, respond with, “Yes, make me an offer!”
It could go like this.
Buyer: I want to pay you $21,500.
You: Okay, thanks for that – can you pay $22,000?
Buyer: Can we work out a deal – let’s say $21,750?
At this point, you should accept – and both parties should be happy. They, because they feel like they just got $750 off the price (which they can tell their spouse about later). And you, because you got $750 more than you were willing to accept.
The buyer may want to continue negotiating, but you can rest easy knowing that you still have $750 to spend.
Of course, things never work out exactly like that, so make sure you keep it fun, friendly, and know that it’s a bit of a sport. Be prepared to cancel the sale and walk away if the buyer doesn’t offer at least the minimum price you’re comfortable with. They’ve made the effort to inspect and test drive the car, and they probably have cash – if they’re decent, they’ll come to the party.
Be aware that some people will try to bargain with you with the offer of “pay cash and I can pick up the car today”. Unless you want to sell the car that day and are in dire need of money, be wary. These people are preying on desperate sellers.
When is the discount?
Depending on the car, the market, the time of year, and even where you’re trying to sell it, you may not get any attention. The car is sitting out front, slowly turning into a swarm of spiders.
It’s time to lower the price.
The increase depends on how quickly you want to sell the car. Going back to our $22,500 example, if you’re not in a hurry, you might want to lower the price to $22,000 first and see what happens. Wait a few days and see if you get any offers.
If not, you have to lower the price again – unfortunately pushing the price down closer to the minimum acceptable price, but sometimes that’s life.
One tactic you can try is to lower your price to a minimum – say $21,000 – and state in your ad that the price is “fixed”. This tells the market you’re not willing to negotiate. If you’ve done your research, this is a pretty savvy deal, and buyers who have done their research will know.
Happy selling!
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