More car sellers are doing it for themselves

[Oracle of Delphi]

The days of parking the ol’ Family Truckster at a Safeway lot with a Day-Glo orange “For Sale” sign in the window may be numbered. Increasingly, consumers are taking advantage of a growing online market to sell their cars themselves rather than accepting a lowball trade-in offer from a dealer.

The trend gained momentum last year as consumers found car dealers especially stingy with their trade-in offers because they were struggling to resell the fuel-thirsty SUVs, pickups and large sedans that consumers were dumping as gas prices soared.

By the end of the year private-party sales represented 34 percent of the used-car market, up from 18 percent a year earlier, according to a report by CNW Marketing Research Inc. That put individual sales on par with sales by franchised dealers and ahead of those by independent used car dealers.

Link: http://www.msnbc.msn.com/id/17612315/

[CARBIZ]

Great read! For people who know what they are doing and have the time/patience/nerve to deal with strangers in their own home, going along with strangers for a test drive, the cancelled appointments, the insults and games (after all - do you think the guy who finally shows up will GIVE you what you want for your precious car?), then selling your own vehicle is certainly the better way to go. I wonder how much of a difference someone can get on a $3k car anyway!

But it should be pointed out (in Canada at least!) that the combined 6% GST and provincial tax (8% in Ontario) is only charged on the difference between the trade-in value and the purchase price of the new(er) vehicle. If your trade-in is worth $10k or more, that is a significant chunk of change. 14% of $10k is $1,400 in tax savings.

There is always the potential for mischief when the title is transferred. You reall want to make sure the other guy transfers it; otherwise, the cops may be banging on your door in the middle of the night six months later when your precious ex-vehicle was involved in a hit and run.

Then there is the fun if your vehicle isn't "free and clear." The bank won't release the lien until it is paid off, the buyer (naturally) won't give you the cash/check until the lien is released. Stalemate.

Who is going to pay for the "safety?" If your vehicle is a $500 as-is vehicle, then nobody will care about the safety. I recently had a student who had paid $1,000 cash for a '97 Cavalier in a private sale, only to discover she couldn't license it in Ontario because it was beyond passing safety standards. She had no recourse but to scrap the car and forget about her $1,000.

I imagine if you are going from an older car that is worth, say, $3k to a newer old car that is worth $8k, the risks/benefits could be in your favor. However, when buying new or high-end vehicles, I wouldn't take the chance. Our company is currently in litigation with a previous owner who traded in their 2002 Odyssey, which we then flipped to our sister Toyota store, but when they put the vehicle up on their hoist (it apparently handled poorly during a highway test), it was discovered the vehicle had subtle frame damage, indicating a serious accident. The customer who traded the van in lied to us. Fortunately, we are professionals and our trade appraisal book includes a section on mileage, accidents, repair work and liens that the customer must initial. It has saved our asses many times - and we know what we are doing!