Planning Increases Profit From Online Used Vehicle Sales

by Darla Dernovsek

	Introduction
	An uncommon opportunity
	Finding online buyers
	Making the sale
	Sidebar: Related Home & Family Finance Resource Center articles
	Sidebar: Be cautious about payment

Selling your used vehicle online seems so simple. Post an ad, answer an e-mail or two, and hand the keys to the first buyer who hands you the bucks.

But if you want to get the most out of your used vehicle, plan ahead to map your route to a successful sale. Anticipating the needs of potential online buyers can increase your profit and decrease the time required to make the sale.

An uncommon opportunity

Bob Alderson, Madison, Wis., quickly figured out that selling his 1992 Volkswagen Corrado SLC online would require locating buyers willing to pay more for a relatively rare model. Alderson says Volkswagen made only about 100,000 Corrados over an eight-year period, so Corrado owners in the U.S. are a small but devoted group. Outside that group, it can be hard to find a buyer who appreciates the car, as Alderson learned when he placed an advertisement in the local newspaper.

"People would call and ask me about it, but a lot of them weren't sure what it was," Alderson says. "My local audience here in town wasn't able to figure out what I was selling."

Local potential buyers also were surprised by a price tag of nearly $9,000 for a vehicle with 98,000 miles. But Alderson knew that the combination of an uncommon car and a recently added six-speed transmission made the Corrado worth the cost. So Alderson went online and searched for Midwestern clubs formed by Volkswagen owners. He found the Volksport group in Minneapolis, where he often visits family members.

Alderson got permission to list his car on the site's classified ad section for free and quickly heard from a prospective buyer. To help the buyer, Alderson offered to drive the car 285 miles to Minneapolis so the buyer could inspect it.

"This guy was a potential buyer, and I hoped I could make him into a real buyer by bringing him the car to see it," Alderson says. "Once he saw the car, he had to have it."

Finding online buyers

Like specialty sites, well-known Web sites that carry advertisements for used vehicles try to link buyers and sellers, often sorting them by geographic area, making it easy for them to meet. The cost of advertising on these sites can range from a low of about $20 for a basic three-week ad up to $70 or more for ads that contain more than 10 photographs, highlight the vehicle's special features, and provide detailed descriptions. On Yahoo!Autos, for example, upgrading from the $24.95 "basic" listing to the $34.95 "featured" listing provides priority placement in search results.

Some of the most popular sites let sellers renew the ad for free until the car sells. For example, sellers can pay $29.95 to run a used vehicle simultaneously on three car sites--Autobytel.com, Autoweb.com, and CarSmart.com. For that price, sellers can post a full-page vehicle description and a photograph. You can renew the ad continuously until the vehicle sells.

These sites are appealing because of their potential to reach high numbers of potential buyers. For example, AutoTrader.com usually has more than two million vehicles for sale in listings posted by individual sellers and dealerships. AutoTrader.com and other sites make it easy for buyers and sellers to communicate by including an e-mail link in the ad.

To avoid dickering about the price, some sellers prefer to "auction" their cars through vehicle sites like AutoTrader.com or through eBay.

Making the sale

While online advertisements can deliver buyers, it's still the seller's job to "show" the vehicle to best advantage.

• Get a check-up. Many buyers will request mechanical inspection. Anticipate their concerns by having a mechanic inspect the car and getting a written estimate of the cost of repairs. Some repairs will be essential. For example, the car should pass state requirements for vehicle safety or emissions. Determine whether to pursue other repairs by comparing their cost to their potential to increase the car's value. Note: Taking this step does not preclude the potential buyer's right to have an independent inspection. You may want to get a vehicle history check from Carfax4cu.com to show that your car has a clean background.
• Clean it up. Clean your car thoroughly. Cars.com offers a printable checklist of tips for preparing used vehicles for sale.
• Prepare the paperwork. Your title should be "clean," with no liens or outstanding traffic tickets. Maintain your registration and verify that your insurance policy covers "test" drivers. Make sure maintenance records are up-to-date.
• Write the ad. Start with the basics: make, model, year, and mileage. Then describe the vehicle's features, focusing on seasonal appeal. Four-wheel drive is important to snowbound Midwesterners, while drivers sweltering in summer heat want air conditioning. Include basic features, such as high gas mileage, along with special features, such as a CD player or a spoiler.
• Set your price. Web sites like Kelley Blue Book help determine how much a vehicle is worth. Double check values by looking at car sales in your local market. Listing the price in the advertisement can save time by paring your audience to serious buyers.
• Take a photo. Buyers want to see the car. Multiple angles can be appealing, especially if a vehicle has special features.
• Be responsive. Respond promptly to phone calls or e-mails from potential buyers. Research conducted by AutoTrader.com shows most buyers prefer talking via telephone to trading e-mails.
• Offer to meet. Most buyers still want to kick the tires before they write a check. Offering to meet potential buyers at a central location can help make the sale.
• Be cautious. While most buyers and sellers are honest, private vehicle sales can create opportunities for fraud or theft. Set meetings in public places and make sure others know where you're going. If the potential buyer wants to drive the car, insist on seeing a current driver's license and then ride along. Once you agree on a price, work with your credit union to ensure that the buyer provides full payment before you hand over the keys. Even cashier's checks can be counterfeited, so ask the credit union to verify that the check is genuine before providing a title (see sidebar, Be cautious about payment). Remember to provide a signed bill of sale, keeping a copy for yourself, and complete the paperwork required to transfer the title.
  It�s still the seller�s job to make the vehicle appear attractive.
• Stay focused. Keep in mind that your goal is to sell your vehicle as profitably as possible. Look for opportunities to refine your ad to reach the most buyers. Like Alderson, you can use your advertisement to ensure that potential buyers recognize your vehicle's true worth. For online buyers and sellers alike, Alderson says, "That's a unique kind of deal."