Setting the right price to sell your car is both a science and an art. While it’ll require you to do some homework upfront, it can help you sell your car faster and arm you with all the knowledge you need throughout the negotiation process.
We’re going to focus on setting the right price to sell your car in a private party transaction. Though of course there are other options to selling as well—one of the most common practices is trading the vehicle in at a dealership. A trade-in is definitely more convenient and will save you a lot more time and effort than selling it yourself, but it comes at a cost, which we’ve detailed in our other post, here.
Let’s take a look at the factors that affect car pricing, and what tools you can use to determine the right price.
Know the market demand
Is your car popular? Are there seasonal factors that can affect the type of vehicle you’re selling? For example, a convertible probably won’t be in high demand in the middle of winter. If gas prices are high, then you’ll be able to command a bit more for a fuel-efficient car that gets great mileage. A bigger SUV might be less desirable for people living in the city where parking is limited, but could be more suitable for suburban families that have kids and pets that they need to transport day to day. You know your city and neighborhood best, so factor that in as you’re selling.
Research local listings
Consider this your "competitive research". As a private party seller, Craigslist is one of the biggest marketplace for people buying and selling cars. Do a quick search for similar make model vehicles that are available on Craigslist and how they are priced, that way you can price your listing competitively to get more responses.
It would also be helpful to know how much similar vehicle would cost at a dealership as well. In general, buyers who are looking to buy private party are cost conscious shoppers trying to save a few bucks. So if you’re pricing your car above retail prices at a dealership, there would be no reason for someone to contact you about your car at all. Thanks for various car sites, you can easily check used car prices at from local dealership through services such as Truecar or Cargurus.
Leverage Online Pricing Tools
Kelley Blue Book
KBB is one of the most established and trust resource when it comes to providing an objective value for vehicles. The site is easy to use, just follow the prompts on each step to enter details about your vehicle. KBB will provide both a trade-in price at a dealership, and a private-party price for your vehicle based on its condition.
On Cargurus, you will need to enter the vin number of your car, your location, and vehicle mileage to get a value estimate. One useful tip Cargurus provide is the fair market price of the vehicle, and how it compares to national and local listings. However Cargurus does not factor in the physical condition of your vehicle—so adjust accordingly based on your vehicle’s wear and tear.
ClearBook by Truecar
Part of Truecar.com’s pricing tool for used cars, they analyze millions of used car listings and transactions to determine your potential trade-in value and expected selling price. It provides a helpful range to help you determine if your list price is higher or lower than market average.
National Appraisal Guides’ website is a useful tool provided by one of the main publishers on new and used vehicle pricing and information. After entering your vehicle’s information, their pricing tool returns a range of estimates based on your vehicle’s condition (clean or rough), and retail vs trade-in price.
Know what your price floor is
Now that you’ve done your pricing research, you should have a good idea on how to price your car if you were to sell it yourself, or how much you’d get via a trade-in. If you decide to move forward with selling it on your own, understand that buyers will most likely try to negotiate. Set a floor for yourself throughout the process - know that an offer below trade-in value isn’t worth your time. If you’re looking to sell your car quickly, price it competitively against the market average so your ad is more attractive to buyers.
It helps to create an effective listing, too. We’ve learned through thousands of listings here on Instamotor that including nice photos and a detailed, honest description goes a long way. For more tips to sell your car faster, check out the ultimate guide for you to sell your used car.