Like buying a car, selling one can be daunting. We tell you how to go about selling your car while at the same time getting the most out of the transaction.
She has been a part of the family for the a few years now. You have heaped love and affection on her and given her all that she has asked for. In return, she has always been there for you, in good times and bad. She has been a part of a lot of happy memories too. However, it’s now time to let go of your pride and joy. Yes, getting sentimental and emotional about cars is very easy for us. The thought of letting go gives us the jitters. For many owners though, it’s still just a car. It has a utility factor, a life period and it is there for a purpose. So, unless you own a rare classic, it makes good sense to sell your old car at a certain point in its life. It’s not as simple as it sounds though. You suddenly find yourself on the ‘other side’ and want justifiable return on every paise spent. You also don’t want to get into trouble after selling it.
So to make it simple for you, here’s our simplified guide to selling your car.
When to sell?
The moment you take the car out of the showroom, it starts depreciating in value. As you drive along, go to work or even just to the shops, the car is slowly ageing and its value is constantly diminishing. What’s important to understand is that the rate of depreciation slows down over time. What this means is that the car loses more value in the earlier parts of its life and less and less as it gets older.
What you as an owner have to decide is how long you intend on keeping the car. A three-year-old car will obviously fetch you more money than a five-year-old one. The money that you get from selling a car, though, depends on a lot of factors (see box on pg 49). A three-year-old car with 50,000km on the clock may fetch you less than a four-year-old car with 30,000km. If your annual running is comparatively high, it’s best to sell the car early rather than keeping it for a longer period. Similarly, a sparingly used car will have a better resale value even after a long period of ownership.
Before you sell
Now that you’ve decided to sell off the car, you should have a resale value in mind that you can quote to an interested buyer. Browse through the various websites that deal in second-hand cars, as well as WhatCar’s own Used Car Best Buys and get an idea of how much resale value similar cars are commanding. You can also look through the classified ads in the newspapers. Call second-hand car dealers, pose as a buyer, and find out how much money they ask for cars that are similar to your car in age and mileage.
You may have spent a decent amount of money putting aftermarket accessories in your car. Things like seat covers, carpets and a music system do help improve the resale value to an extent, but not a whole lot. Our recommendation is to remove any accessory that you might want to save for your next vehicle before showing the car to a prospective buyer.
Get the car serviced and change any faulty or non-operational parts. An interested buyer may not be as impressed if a squeaking sound is emanating from the suspension or if the headlamp is broken. Selling a car with all things in working order gives you the upper hand, as you can stick to your asking price. Buyers will undoubtedly demand that you lower it if they have visible flaws to point out.
Nothing spreads faster than word of mouth. Tell friends and colleagues you want to sell your car. Someone may just know somebody who intends to buy a used car and may help you sell the car sooner. The other option is to sell through the numerous car-related websites. All you need to do is list your car. Most websites are secure and would need a telephone number from anyone interested in viewing the full information or your contact details. The drawback here is the chances of someone spotting your car among a long list is limited, especially for hatchbacks that sell in large numbers every month.
Then there is the old-school method of putting an advert in the papers. You have a limited amount of space in classifieds, and while it’s better to print a picture alongside, it will end up costing more. The thing you should keep in mind is to provide as much information as possible in the limited space that you have. Details like the year of manufacture, colour, model/variant, number of owners and kilometres covered should be listed. Other details like insurance cover, accessories in the car and reason for selling may also be provided. The hitch here is that a lot of dealers also advertise and it’s easy for buyers to dismiss a genuine ad when glancing through.
While providing as much information as possible in an advert is conducive to finding a buyer fast, there are some things that you can do without. These include the name and address of the owner. Try instead to give an email address for correspondence. Supply a mobile number instead of a landline for safety reasons and so they can reach you anywhere. When quoting the asking price, mention the figure closest to what you expect to get from the sale. It’s better to quote Rs. 5,49,000 instead of Rs. 5,50,000.
Dealing with potential buyers
Just as we recommend not buying from a used car dealer, we don’t recommend selling to a used car dealer. They tend to undervalue your car to obtain it for a lower amount and then sell it later at a higher price, making a handy profit. Selling to an individual buyer is a better bet.
When an interested buyer contacts you, decide to meet at a public place with lots of people around at a time suited to both parties. Don’t meet anyone all by yourself at a place that’s deserted. Take a friend or a colleague or relative along to be safe. You never know, it may be a mugger wanting to steal your car.
The first impression you and your car make on the buyer is important. Make sure the car is clean and that even the engine bay is relatively free of dirt. This tells the buyer that you look after the car and that it has been well taken care of. Don’t appear over-eager to sell though, and be assertive in quoting the asking price. Point out the good bits like the accessories you’re ‘throwing in for free’, a clean and complete service record, an effective air-conditioner and the like.
If the buyer wants to drive the car himself, don’t let them go alone, instead go with them. Show the buyer the recent service receipt and that everything is in working order. However, don’t push for an instant sale. This puts you on the backfoot and gives the buyer the upper hand in negotiating the final sale. It’s best to be ready to walk out of a deal at any point of time if your target price is not being met.
If the buyer is willing, you’re getting a good price and both parties want to close the deal, ask for some token money. Allow some time to the buyer to arrange for the rest of the money if they so desire, but confirm the last date to receive the total amount. Handing the keys over at this time though is not a good idea. It’s only when you have received the money in total that you should hand over the car.
Always insist on a cheque or a demand draft as payment. This ensures there is a record of the transaction with the bank. Carrying cash is not always the safest thing to do in any case. With a cheque or demand draft, wait for the money to be transferred to your account before moving ahead and transferring ownership.
There are a lot of legal formalities involved in selling a car and that means a lot of paperwork. Here’s a small list of documents needed to be filled and provided to the buyer
• Form 28: This pertains to the application to the RTO for an NOC if the buyer’s residence is in the area of jurisdiction
of another RTO.
• Form 29: This is for transfer of ownership of the car.
• Form 30: The form for intimation and transfer of ownership.
• NOC from finance company if applicable.
• Apart from these, other things that should be handed over to the buyer are
• Copy of the delivery note.
• The original registration certificate.
• RTO tax certificate of the onetime tax paid when you bought the car.
• Insurance policy if you threw that in to sweeten the deal. (You will however need to inform the insurance company about the transfer of ownership).
• Copy of the invoice of the car.
• Owner’s manual of the car.
• Service history of the car.
• Duplicate keys.
Fill all the documents properly and don’t leave any blanks. It’s a good idea to keep copies of all the documents with you as well. Also make it a point to have a copy of a government department-issued photo identity of the buyer, like a driver’s license or passport.
Factors affecting resale value
A lot of things go into determining the resale value of the car. The best way to ensure good resale value is to buy something that retains its value well in the first place. Brands that have established themselves well in terms of reliability, serviceability and fuel economy usually retain their value better. A car that costs less to buy to begin with usually sells for a lower price. Low-mileage cars also usually sell for a higher price relative to a similar model-year car with higher mileage. Accessories that you put in the car too have an effect. Seat covers are useful in retaining the original fabric’s colour while an expensive music system may not be very appealing to a buyer. A thorough and complete service record also helps getting a better resale. Then there are stereotypes associated with owners like a military personnel-owned or Parsi-owned vehicles.
Don’t make any hasty decisions and always consider all your options before you confirm a sale. Ensure all the documentation is in order.