Watch for the potholes when selling car yourself

May 19, 1991|By Kim Clark

With five kids who drive and another who would love to, Ron Edwards needs to squeeze every last penny out of the cars he buys and sells.

So when the 51-year-old Severna Park resident decided to sell the family's minivan, he placed a couple of newspaper ads and sweet-talked the callers for several weeks until he got a good offer.

It would have been easier to sell the 1987 Dodge Caravan to a dealer. But he didn't even bother checking out how much local dealers would have paid for the minivan.

"The dealer has to put his kids through college, too," Mr. Edwards said, explaining that he figured he would get a better price from a private sale.

Although new-car sales have plummeted during the recession, used-car sales are remaining strong, says Bruce Shifflett, assistant director for vehicle registration at the state Motor Vehicle Administration.

And more and more car owners like Mr. Edwards are trying to make a little extra cash by selling their vehicles on their own, Mr. Shifflett says.

But consumer advocates and car sellers who have had problems warn that sellers, too, must beware.

Car sellers who still owe money on their cars have to be especially careful, prosecutors warn, since many bank liens and state laws prevent some kinds of transactions, such as subleasing cars on which you owe money.

And in any case, the original borrower is always liable for the car loan no matter what happens to the car.

However you decide to sell your car, experts agree you should take a few initial steps.

First, says Jack Gillis, author of "The Used Car Book," clean up the car, including the engine, since appearances matter.

Don't bother making major repairs, he says. You probably won't get your money back, he believes.

But that doesn't mean you should ignore mechanical problems. Many states, including Maryland, require you to tell the buyer of any problems of which you're aware.

Secondly, research the prices for which similar cars are sold, Mr. Gillis advises.

There are several publications, including the National Automobile Dealers Association's "blue book" that give average retail and wholesale prices for used cars. The wholesale price is the amount dealers are likely to give, he explained. In addition, check out the classified section of several area newspapers in order to get a sense of prices on the local retail market.

If you still owe money on your car, you should call up the lender and find out exactly how much it will cost to pay off the loan and what you must do to complete the paperwork.

Once you've done the basic work, it's time to decide how you want to sell the car.

If the difference between the wholesale price dealers are likely to offer and the average retail prices you see in the classifieds is only a few hundred dollars, you probably shouldn't bother selling it yourself, Mr. Gillis says.

And if you need cash immediately, a dealer can usually complete a transaction quickly.

You also shouldn't try selling it yourself if you don't like the idea of having your telephone number in the newspaper or having strangers come around and test-drive your car.

Selling your car to a dealer is fastest and easiest. But dealers and consumer agency attorneys say sellers still must prepare ahead of time in order to protect themselves and get a good price.

Because dealers make money by buying low and selling high, they naturally try to get your car for the least amount possible. So you must know your stuff and be prepared to negotiate.

Bob Beaumont, owner of a used-car dealership in Columbia, says he'll usually pay sellers the average wholesale price published in the dealers' guides if the car is "in real nice condition" and has working air-conditioning -- a must in steamy Maryland.

He's especially eager to get smooth-running cars that he can sell for under $5,000 -- say, 7-year-old small cars.

"There are a lot of $8,000 to $9,000 used cars around," he says, and at that price, shoppers can consider some new cars.

The seller has to have the right approach to get the best price, Mr. Beaumont says.

"The first thing I ask them is how much they want," he says. And if the seller responds vaguely, saying, "How much will you give?" Mr. Beaumont doesn't have much patience.

"If someone did that to you, you'd walk out," he says.

New-car dealerships tend to be a little pickier about the used cars they buy, says Dennis Tilghman, a salesman for Al Packer Ford in Baltimore.

"You've got to use common sense. Don't bring in a car with 120,000 miles on it," he says, explaining that dealers want used cars that will sell quickly and easily.

In addition, he says, it's wise to choose your target carefully. "You'll probably get more money from a Ford dealer for a Ford."

If you decide to trade in your car for a new one at a dealership, consumer activists warn you to be especially careful and to negotiate the price of the car you're going to buy first.

Then, if the dealer doesn't offer you a fair price for your trade-in, you can take it to another dealer or sell it yourself.

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