Now’s a great time to sell your used car because it’s a seller’s market. According to the Miami Herald, the aftermath of the Covid-19 pandemic has resulted in a used car shortage. Even new car dealerships are running into unique problems. By selling your car now, you give yourself the opportunity to get the best possible deal.
You have a lot of options when it comes to selling your used car. Continue reading to learn more about how to maximize your profits and how you can put that toward a new vehicle.
Why Is There a Used Car Shortage?
Before getting into specific details about selling your car, it could be helpful to understand why the auto industry has been disrupted in the first place. Some contributors include:
There’s a Shortage of Microchips
Microchips are responsible for powering many of your car’s features. However, according to Consumer Reports, there is a nationwide shortage of these parts. During the pandemic, electronic companies saw a boom in their sales, with the increased demand for video game consoles, TVs, and tablets. Manufacturers routed their microchip distribution to these companies instead of selling them to carmakers.
In turn, this is delaying production. While this shortage isn’t expected to last long, in the meantime, consumers can expect:
· Higher-than-usual prices for cars
· A limited selection
· Inflexibility when it comes to negotiation
· Higher repair costs when replacing these components
Factories Closed During the Pandemic
NBC News summed it up perfectly: “In an instant, everything went quiet: the freeways, the factories, the showrooms. The arrival of the ‘novel coronavirus’ a year ago slammed the automotive world.” At the pandemic’s height, auto factories closed down, causing something of a backlog when it came to dealerships’ inventories. Because of high demand and short supply, this allowed used car dealers to take advantage of the situation and capitalize off the increased need.
Now, you can take advantage of this situation by selling your used car. You could even get more than what the Kelley Blue Book listing is.
The Difference Between a Buyer’s Market and a Seller’s Market
Earlier, we mentioned that right now, the automotive industry is a seller’s market. But what does this mean? According to Investopedia:
· A buyer’s market is when the consumer has all the power. This can happen in instances where demand is low, but inventory is higher. Sellers want to move their stock and are therefore more eager to make deals with potential buyers.
· A seller’s market is when the seller has all the power. Right now, it’s a seller’s market. People want new cars, but there’s not a lot of them, so they’re willing to pay more. Sellers know that they have something people want and can charge higher prices.
Right now, you’re in the seller’s spot. People are going to dealerships every day and find themselves looking at mid-sized cars at big-sized prices. Even if your car only goes from point A to point B, you have something that people are willing to invest in. The problem is, how do you go about selling your car?
What Goes into Selling Your Car?
First things first, you need to know what your car is worth. Your car’s value depends on a lot of things, including its:
· Make, model, and year
· Maintenance history
· In-car features
Just because you bought your car for $25,000 10 years ago does not mean that you’re going to make that back. In fact, according to CarFax, most cars lose 20 percent of their value within the first year. By the time a car reaches five years old, it could lose 40 percent of its value.
If you post your car for sale at its original selling price, you’re probably not going to get any nibbles. By setting forth reasonable expectations, you can expect reasonable outcomes.
What should you do before listing your car?
If you want to sell your car, whether to an individual or car-buying company, here are some things you should do:
Erase your digital footprint. This includes disconnecting your Bluetooth devices, logging out of any car-enabled subscription services, and, of course, removing any stored phone numbers. Depending on what type of car you have, you could restore your center console to its factory settings, thereby erasing all sensitive information.
· Wash your car. You don’t want someone to negotiate a lower price because your car looks dirty. A $10 car wash could ultimately mean the difference between a good offer and a low one.
· Perform any regular maintenance. If you’re about to sell your car and it needs hundreds of dollars in repairs, obviously, it’s not in your financial interest to fix these problems. However, if your car needs an oil change, new tires, or a tire rotation, you can get this done for pretty cheap. Doing some things like this gives you an advantage when negotiating a price.
· Keep an open mind. Just because you posted your car on one app doesn’t mean that you’re locked into that one platform. You can use multiple websites and apps when looking for potential buyers. Some organizations will even buy your car at a flat rate with little questions asked. This could serve your interests if you’re looking to get rid of your car fast.
Things to Avoid When Selling Your Car
If the first response to your ad is the one you’re looking for, that’s great! However, patience is a virtue in these situations. Just because someone responded to your ad doesn’t mean they’re going to offer you a fair price. You’d be surprised at some of the tricks people will pull to get a good deal.
Aside from accepting the first offer, here are some other things to avoid when selling your car:
· Avoid wasting time with non-serious buyers
· Lying about your car’s condition or need of repairs
· Selling your car without accepting the money upfront
· Neglecting to transfer the title and registration
· Do not accept checks or money orders unless you’re confident that it’s valid
· Spending too much on repairs
Don’t let anyone pressure you into accepting an unfair offer. You get the final say––end of story.
Now is a great time to sell your car. If you wait too long, today’s seller’s market could turn into a buyer’s market, limiting your options. By considering all of your options, you can make the decision that’s right for you.