Are you looking to sell your car online but are unsure of what options are available to you? Or perhaps you are overwhelmed by the number of options available in today’s market? Don’t worry; we got you covered! In this article, we will cover three methods, consignments, online classifieds, and direct to dealers/wholesalers, to help you gauge which option might be best for you!
Consignment
Auto consignments work similarly to any other type of consignment. Consigning your used car means you are letting someone else sell your vehicle for you, and in exchange, you pay them a commission fee on the sale of your vehicle. How it works is you pay a small amount initially to cover the cost of inspecting, preparing, photographing, and listing your vehicle. Fees usually ranges from $0 to $250. After your vehicle is sold, you will pay a commission fee. Commission fees are generally on a flat fee basis or a percentage of the sale. Flat fees usually range from $250 to $1000, and percentage fees will range from 5% to 15%. These fees will vary depending on what type of car you are selling.
Benefits of using a consignment to sell your vehicle
Access to a large network and financing options: Many consignments have large customer networks that can advertise your vehicle to reach the largest number of potential buyers. They can also professionally photograph and detail your car to make it stand out from all of the other private ads, then list it online, on their website, social media, and car sales websites. The consigner can offer car buying finance options and the ability for the person buying your car to be able to trade in their own vehicle, which extends the potential buyer market significantly.
No need to interact with the buyer directly: Avoid the haggle and hassle of meeting up with a potential buyer who might try to low-ball you or have to deal with all of the logistics of selling a car. Often, buyers will waste your time flaking or just wanted to test drive your vehicle with zero intention of purchasing it. Using a consignment is a more secure method as the price is fixed based on what you initially set it at, and the consignment handles all the payments and logistics of transferring the car to the buyer.
Save time: By using a consignment, you will not have to deal with all of the inquiries and questions that potential buyers usually have or spend time meeting up to show them the vehicle. When someone decides they want to purchase your car, you will avoid having to go through all of the paperwork, offer a warranty, transfer of title, etc.… The consignor will handle everything for you and pay you when the transaction is complete.
Bottom line
Selling your car through a consignment can be a good option if you won't to try to get the best offer for your vehicle without going through the hassle of selling to private party car buyers. You can set the asking price for the vehicle, but it should be reminded that the consignor will take a fee for the sale, which you will work out beforehand.
Online Classifieds
Chances are, if you are planning to sell your car online, you are considering Craigslist, eBay Motors, Facebook Marketplace, or other online classified ads. These platforms are easy to use, free (or extremely cheap), and allow you more flexibility. Craigslist is one of the first places people look to when beginning to shop for a vehicle locally. eBay Motors is a fantastic place to list your vehicle for sale as the online marketplace has over 150 million users. They will display your vehicle to anyone within a 200-mile radius of your location. Listing your car on eBay Motors is free, but there is a small fee based on the sale price when you sell your car. Facebook is better than Craigslist for security purposes because you can easily vet the individual inquiring about your posting and figure out whether it is a scam. Selling your vehicle on Facebook Marketplace can be great because of Messenger's instant notifications, simple to use, and free.
Benefits of online classified ads
Higher offers: On average, classified ads receive higher payouts since you determine the price of the vehicle. Compared to dealers who are in the business to make money, so they will not offer the maximum market value of your car.
More money for older cars: Cars with high mileage receive the highest offers in private sales because dealerships will likely not buy them or will be buying them to wholesale or auction off.
Easy to market: With all of the services mentioned above, it is easy to post your vehicle online with many free or cheap options.
While using Craigslist and others might seem like a good option given how cheap, quick, and easy it is to list your vehicle, making private-party sales might not be the best option for several reasons:
People rarely show up (so "potential buyers" will waste your time)
People often waste your time (with lowball offers or joyride test drives)
There is potential for safety and scammers concerns (not only meeting a stranger but often having them drive your car or bouncing a forged cashier's check).
The logistics of the sale are painful (what happens if the car has a lien, the buyer often arranges a mechanical inspection and expects a perfect car. You'll need a trip to the DMV or title notary in many cases).
When should you sell your car yourself?
There are some cases when the additional hassle of selling your car yourself is worth it. Here are a few instances when it might be best to sell your car yourself:
Your vehicle is less than $5,000
Your vehicle is highly demanded and less than $15,000. Japanese cars (e.g. Toyota Camry), and small SUVs (e.g. Honda CR-V) generally fall into this category. Older luxury cars and American sedans are harder to sell independently.
You have a collector or rare car. In this case, we recommend Bring-A-Trailer and using our photography app.
Direct to Car Dealership/Wholesaler
Car selling to a dealership has never been easier with the rise of online vendors such as Carvana, Vroom, and Shift, who will come to your home and pick up your car from you. While you might not receive the highest price potential for your vehicle, these online services should not be discounted, especially if you are looking for an instant cash offer. Other dealerships like CarMax require you to bring your car into one of their physical locations for an appraisal before getting an offer. Let’s go over the major advantages of selling to a dealership:
Speed: By going to your local dealership, you can have an offer and money in your bank by the close of business. With major services like Carvana, Vroom, and Shift, you can wrap up the transaction in little as seven days. This definitely beats waiting for an inquiry on Craigslist or your consignor identifying a buyer.
Convenience: Local dealerships, CarMax, Carvana, Shift, and Vroom will all handle the paperwork, bill of sale, title transfers, Carfax, DMV paperwork, and all you have to do is sign! Also, you do not have to personally deal with car shoppers as you would with classifieds.
Potential Tax Breaks: If you decide to sell your car as a trade-in, some states may deduct tax from the total price of the new car in the amount of your trade-in. For example, if you trade in a car for $5,000 and purchase a new vehicle for $20,000, you may only have to pay taxes on $15,000.
While car dealers and online vendors are great for the simple process, it is important that you go in there with some knowledge of what your vehicle is currently worth to get the best price. Find out below how to get the right pricing for your used vehicle.
Getting the right value before selling your car
Before selling your current car, you need to make sure you get a good understanding of your vehicle's current value. Many online resources such as Kelley Blue Book, Edmunds, CarGurus, and NADA will tell you how much car prices for your car is valued at on the private market, trade-in value, retail value, and certified pre-owned value. We have also created our own vehicle valuation tool that gathers data from CarMax, Carvana, Vroom, and Shift, which will give you a price range for your old car.
Refinance with WithClutch
Purchasing a vehicle comes with the responsibility of beginning to pay it off. Often dealers and lenders charge very high-interest rates. Whether you bought from a dealer or a private-seller, WithClutch can help you save money and time by allowing you to refinance your loan from the comfort of your home! Use the free Auto Loan Refinance Calculator to find out how much you could save.
If this appeals to you, follow these simple steps to begin your refinance journey and get you on the best payment plan to be free of your auto loan finally.
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