Selling a car privately isn’t as simple as posting a classified ad on the internet. Unlike most personal possessions a vehicle has safety regulations that must be verified in order to transfer ownership and be licenced for road use. The seller can take the approach of let the buyer beware however if you want to get maximum value for your second hand vehicle, take the following steps on how to sell your car so you can feel good about letting your car go to the next owner.
1. Market research and price range
Lets say you have an eight-year-old (2007) Honda Civic (Canada’s best selling car for the past 17 years) and you want to know what the car is now worth. Look up your specific year, make and model on various dealer websites and classified ad sites to see what they are selling for. Take into consideration your cars’ mileage, overall cosmetic and mechanical condition, trim level, special features plus any improvements/modifications or issues. Generally dealerships will sell a vehicle for slightly more than a private seller because they can back it with an extended warranty and peace of mind.
Market research will also identify how many vehicles like yours are currently available for sale in your area. In the case of a common car, like a Honda Civic, there will be thousands of used Civics for sale in any given area. If you price your popular (commonly desired) car for a fair price, expect that it should sell quickly. For an older, less common, unique or special interest vehicle, expect that it will take longer to sell because there will be fewer potential buyers.
2. Clean the car to make it presentable
Whether you’re trading your car into a dealership or selling it privately, if you want to get maximum dollar, take the time to thoroughly wash and detail the car. Your car will show better in photos and it makes a big difference when an interested buyer comes to look at the car and it’s clean and presentable. I’m going to state the obvious; that you should remove all clutter from the interior, vacuum and dress the surfaces. If you don’t have the time to thoroughly clean the vehicle, than pay to have an auto spa do the work. Just think, fifty dollars spent in detailing will result in a clean car that’s easier to sell or trade-in for more money.
3. Know your vehicles service history
Has your car been well maintained? Perhaps you’re not the original owner and don’t know the complete history of the car you’re trying to sell. Know as much as you can about the vehicles’ mechanical history so you can confidently answer questions that will come up from prospective buyers. Have service records available that show that routine and preventative maintenance, warranty work, recalls and repairs were performed at appropriate intervals. This will help you sell the car with confidence and reduce low-ball offers due to buyer concerns.
4. Mechanical inspection for safety and emissions
If your vehicle is no longer under warranty it is a good idea to have a mechanic inspect the vehicle to advise you of any problems or future issues that may come into question through the selling process. In order for a used vehicle to be licenced for road use in Ontario, it needs to pass a safety inspection performed by a licenced mechanic. The mechanic will inspect the tires, brakes, lighting system, airbags and other safety features to ensure everything is in good working order. As a seller it is important to know if your car will “pass safety.” The certificate costs on average $100 or an hour of labour time plus any necessary repairs.
By law, certain light duty vehicles must pass a Drive Clean emission test before they can be licenced and driven on Ontario roads. Generally, you need to get the test every two years, once the vehicle is seven years old. Used vehicles require a valid Drive Clean test pass when they are sold in order to transfer the ownership if the model year is older than the current year. The test costs $30 plus tax from a licenced drive clean facility. A pass report is good for one year. A test is not needed if you are transferring a vehicle to an immediate family member or it is a hybrid vehicle or a light duty vehicle model year 1987 or older.
Getting either the Safety Standards Certificate or Drive Clean test can be the responsibility of the buyer or seller. This can be negotiated and any necessary repairs to pass either test can also be a point of negotiation with the final sale price. If you are confident that it will not take any (or much) repairs for your car to pass safety and E-test, than offering it for sale as “safetied and E-tested” will enable you to sell it quicker and for maximum value compared to “as is.”
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5. Used Vehicle Information Package for private sales
In Ontario it is mandatory for a private seller to obtain a Used Vehicle Information Package (UVIP) from the Ministry of Transportation (MTO) and show it to interested parties. The package costs $20. The UVIP has five sections. Vehicle details list the VIN and if the car has a “brand” applied such as salvaged or rebuilt. Section 1 also gives a wholesale and retail value which is the average price range for the year, make and model, not taking into consideration condition, mileage and options. The buyer will pay the greater value on the actual sale price or the wholesale price. If the purchase price is below the wholesale value or the car is more than 20 years old, an appraisal is required to verify the value. This is the buyers’ responsibility.
Section 2 of the UVIP shows the current registrant, the date they took ownership and the last registered odometer reading (usually when they renew a licence plate sticker). Section 3 shows the Ontario vehicle history listing previous owners and registration dates. Section 4 shows if there are any liens on the vehicle. The lien (such as dealership financing) should be cleared before the new owner takes possession. Section 5 is the bill of sale portion that must be completed by the buyer and seller with the selling price. This original portion is required to transfer ownership and used to calculate HST payment from the buyer to the MTO. It is the responsibility of the buyer to transfer the vehicle within six days, even if it is unfit (not going to be driven right away). I suggest if you sell the car to a stranger, to protect yourself from any legal liability once the vehicle has left your possession, register it as sold (with the MTO) in case the buyer is delinquent in transferring the ownership.
6. Asking price and negotiation
Set your asking price to allow room for negotiation. For example, if you are content to get $7,000 for your 2007 Honda Civic DXG Sedan in average condition with average mileage, list it for $8,000 and you will likely end up selling it for around $7,000. With any common vehicle, the sale price will be negotiated down from the asking price. Also, bear in mind that the buyer has to pay sales tax (HST) to the Ministry of Transportation when they transfer ownership.
If you are trading your car into a dealership, you will generally get less value for it than selling it privately. This is simply because the dealership will need to invest money in the vehicle to recondition it and allow room for a profit. As with the example above, a dealership will give you around $5,000 trade-in value on your 2007 Honda Civic were as you can sell it on your own for closer to $7,000. This is one reason why people go through the effort to sell a car privately.
7. Advertising for sale
Times have changed since the days of parking your car at the end of the driveway with a “for sale” sign and placing a classified ad in your local paper or buy and sell publication. Now most private automobile buyers and sellers turn to the worldwide web as their primary source. It is still fine to use these traditional means of advertising but also list your car for sale on popular classified websites such as autocatch.com. Include a detailed description of the car and post photos of the interior, engine bay, trunk and exterior from different angles. This will reduce the number of unqualified inquiries and help sell your car quickly and with less aggravation.
8. Anticipate questions
When showing your used vehicle to perspective buyers anticipate how you will answer the following questions: why are you selling it? Has it ever been in an accident? Are there any mechanical problems? Does it leak or burn oil? Is it reliable, does it ever not start? Can I see the service records? Will it take anything to pass safety or emissions test? Being able to confidently respond to these questions will gain the trust and confidence of the other party.
9. Finalizing the sale
Once you’ve struck a deal the best payment options when selling to a stranger are cash or certified cheque/bank draft. The seller needs to complete the transfer of ownership portion and record the mileage, the buyers name and address and both parties must sign and date the transfer of ownership. The seller keeps the plate portion in order to return the licence plates to the MTO for a partial refund or register the plates to another vehicle. Both parties must also sign the bill of sale portion of the UVIP.
I recently sold my fathers’ 1994 Cadillac STS to a private buyer as an estate sale. I learned a lot through the process as some Ministry guidelines had changed since I last sold a car. As outlined above, I had my mechanic inspect the old Caddy. He advised me to sell it “as is” because it needed quite a bit to pass safety. I cleaned my Dad’s beloved Cadillac – it looked great when I was done, he would have been pleased. I advertised it on autocatch.com and had several inquires and a few showings. I was upfront about what I knew about the car and before long I found a buyer who was happy to have Dad’s beautiful luxury liner. I would have kept the Cadillac for myself but I didn’t have room in my driveway for another car. Regardless, selling Dad’s car was a special experience and I’m delighted to share these tips to help our readers who want to sell privately.
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