Planning to sell your car? Here you can learn the different ways and places you can do so and how each might affect the price you’ll get. And don’t miss our tips on the best time to sell your car and what to do if there is still outstanding finance.
- Choosing the best way to sell your car
- Can I sell my car with outstanding finance?
- Can I part-exchange my car with outstanding finance
- Best time to sell your car
- How to get your car ready for sale
Choosing the best way to sell your car
Your first step
You’ll get the most for your car by selling privately. The next best option is dealer part-exchange, followed by a car-buying website.
If you sell privately you might get 10% to 15% more for your car than you would from a dealer.
This means if your car was worth £5,500 if sold privately, you’d lose at least £500 by selling it to a dealer.
Selling a car to a dealer
Part-exchange: The easiest way to sell your car is to trade it in when buying a new or used car from a dealer.
You’ll probably get less for it than through a private sale, but you’ll avoid the work and expense of advertising and dealing with enquiries, viewings and test drives.
Your car’s part-exchange value will be a little more than the trade price you’d get if you sold your car outright to a dealer.
But the dealer might not be prepared to negotiate over a part-exchange price.
Selling outright: Selling outright to a used car dealer or garage is a relatively quick and simple process.
The price you’ll get will be based on the car’s trade value and condition, so it won’t be the best price possible.
Selling a car privately
Selling a car privately can be time-consuming, but you’ll probably get a better price.
Here’s what you’ll need to do:
- Advertise your car to potential buyers – for example, a ‘For Sale’ sign on the windows of your car and/or a shop, classified ads in local papers, or ads on sites such as Gumtree, PistonHeads, AutoTrader and Motors. Or, you might be able to find a buyer among friends or their friends through social media like Facebook, or at work.
- Make sure you describe your car correctly in your advertisement and that you can prove you’re its legal owner.
- Deal promptly with calls or emails from potential buyers.
- Arrange and be present at viewings and test-drives.
- Arrange a safe way of being paid for the sale.
Online car buying sites
There are lots of online car buying sites that will offer to take the work out of selling a car. You enter your car’s details on the company’s website such as age and mileage, receive a valuation, and then take it to a local depot to have it assessed.
However, Which? says “You’re almost certain to get a better price selling the car, or even sending it straight to auction, yourself. In our undercover research, we found that five out of six of our mystery shoppers would have been better off selling to a dealer – in one case, by over £2,000.”
If you do choose to sell your car online be aware that usually the online valuation is subject to a physical inspection of your car. If the inspection reveals some faults, the final valuation figure might be considerably lower. You also might have to pay an administration fee for the service.
Selling a car at auction
Auctioning a car is quick and relatively hassle-free.
But there’s no guarantee your car will reach its reserve price, and you might end up getting less for it than through other ways of selling. And, if it doesn’t reach your reserved price, you’ll have to take it home and try again in another sale.
Most auction buyers are in the motor trade. If you’re lucky and attract a private buyer, they might be prepared to pay more for your car than a dealer would be.
You’ll need to pay an entry fee of around £30, set a reserve price for your car, take it along to the auction and then wait for the hammer to drop.
If your car sells, the winning bidder pays for it immediately and the auction company then gives you the sale price minus its commission. This can be up to 10% of the sale price.
Online auctions are a particularly easy way of selling a used car.
You simply advertise your car on the site with a full description and photos, and then put the auction ‘live’.
There are some charges – for example, eBay Motors charge an insertion fee of £10 and a final value fee based on the selling price, from a minimum fee of £20 up to a maximum of £35.
As with a private sale, you must describe your car accurately so as not to mislead buyers.
Can I sell my car with outstanding finance?
Did you know?
It is illegal to knowingly sell someone a car with outstanding finance without informing them of the situation.
If you are selling a car with finance still outstanding there are two things you must do before you can legally sell it:
- Inform the finance company and ask them for the “settlement figure” they’ll need from you to pay off your loan in full.
- Pay off the settlement figure, plus any early repayment fee and administration fee the lender might charge.
Despite these costs, paying off your loan early should end up costing you less than your remaining payments would have done.
Bear in mind it’s usually very difficult to sell a car with outstanding finance.
The finance company will have registered your car on the HPI and Experian databases when you took out the finance plan.
Before buying a used car, dealers and most sensible private buyers check these databases to make sure there’s no finance outstanding on it.
Can I part-exchange my car with outstanding finance
The same principles apply as when you’re selling a car with outstanding finance.
You must contact the finance company for the “settlement figure” and pay this along with any fees and administration charges before part-exchanging.
Keep in mind that most dealers will be looking to make a profit when they resell your car, so the part-exchange price will probably be lower than the price you’d be able to get selling privately. But, it’s much simpler and quicker to part-exchange than it is to list, do viewings and test drives to sell a car on your own.
Best time to sell your car
Timing is important when selling a car – both the age your car has reached and the time of year you sell it.
Here’s what to bear in mind:
- A four-wheel-drive appeals more in the winter when driving conditions are poorer.
- A convertible is more desirable in the spring or summer when the weather’s better.
- The younger your car is, the more you’re likely to get for it, as there’s a perception cars are not as reliable after five years or 60,000 miles.
- If you’re part-exchanging, choose a month when business tends to be slower at dealerships, for example, January, March, August and December.
Sellers and buyers can no longer transfer existing tax when a car is sold.
Instead you’ll need to tax the car yourself and the old owner can apply for a refund.
However, new tax is now backdated to the beginning of the month and refunds are from the start of the next.
This means if you sell and then buy a car early in the month, you will be paying tax twice.
If you apply for SORN (Statutory Off Road Notification) before the end of the month you can avoid paying tax on your existing car.
However, you’re liable for a fine if you then drive on the roads untaxed. This could make it tricky if a buyer wants to test drive your car.
Disposing of your car
If your car is reaching the end of its life and becoming uneconomic to maintain, consider donating it to charity or scrapping it.
How to get your car ready for sale
Along with washing and cleaning your car, and checking it’s in fully working order (unless you’re selling the car with faults and make this clear in the sale advert), there are a few other details you need to take care of.
You need to tell the DVLA that you’ve sold your car. This is because, until they’ve been notified, you’re legally responsible for the vehicle.
To tell the DVLA you’ve sold your car, you can send them the second part of the V5C (logbook), or use the DVLA’s online service.
The old owner of the car – which would normally be you, but legally will be the person named on the V5C (logbook) so could be your partner – will receive a refund for the car’s vehicle excise duty (also known as road tax). The refund is only for any full months that you’ve paid for.
Don’t forget to pay off any finance that is still left outstanding on your car, and to let your insurer know that you’ve sold the car.
This article is provided by the Money Advice Service.