Here is some some useful information on how to sell your car privately. We can break the process down into three sections: Preparation, Marketing, and Conclusion.
Let's start with preparation.
What is more important? Cosmetic items or mechanical items?
Take a good look at your car and focus on any of those obvious ‘in your face’ items, like a cracked windscreen, a tear in the upholstery, a damaged dashboard, or dents and scratches in the paintwork.
Let me assure you that the cosmetic side of things are far more important in selling, than mechanical issues. Before you can even hope to get to second base in the sales process, the buyer first has to like what he/she sees. Visual impression is everything. Once you have dealt with the obvious cosmetic items, send your car for a professional valet. A neat, clean car will make a huge difference to whether you will conclude a sale or not. More often than not any money you invest in preparing your car for sale will be doubled or even quadrupled by getting a better end price.
If there are any mechanical problems with your car, the chances are the potential buyer will pick them up, so get them sorted out before putting your car on the market. The better your preparation, the quicker the sale and the lower the chances of after sales complaints. List any problems in order of priority and attend to them from the top down according to what you can afford. For example, if there is a hole in the exhaust and a slightly worn tyre and you can't afford to attend to both, do the repair to the exhaust first as that will make a bigger negative impact on your sale than a slightly worn tyre.
Try to get your car as factory standard as possible. Take everything out the car that wasn't there when it was new. That includes those fluffy dice or CD hanging from the mirror; the air freshener your girlfriend gave you; those spotted Dalmatian seat covers; take the tinting off the windows; put the original steering wheel back; take off the wind deflectors, and so on.
OK, so your car is now ready for sale. Now let's look at the marketing side of things.
Is the venue where I sell my car important?
Where will you have your car on display? At home? At work? On a public pavement? Imagine what the potential buyer will think when he arrives to see the car. The display venue makes a difference. Try to choose somewhere that will enhance, rather than detract from the car.
How do I know what the “right” price is to put my car on the market?
Set your price you would like to get for it. Almost every buyer wants to haggle, so give yourself some room to negotiate. Before you set your price consider all of the following:
What are the current trade in and retail values?
How popular is your car in the current market?
The rule of thumb for used cars being sold privately in a neutral market is just above trade in value. In a bull market (when things are going well) about half way between trade and retail and for very popular models, even right up to book retail. In a bear market (when the economy is in recession ( like now), work on trade value and lower. You can of course, ask any price you like, but it is a big waste of everybody's time and the reality is you will only get what the market is willing to pay for it.
What should I do if I owe more on my car than its book value?
One of the most common mistakes I see is people advertising their cars for what they owe on them, even if that figure is much than book value. They are unable to negotiate as they have no bargaining chips at all. Their cars remain on the market month after month, as they drop deeper and deeper into financial trouble. If this is your scenario, remember your first loss is your best loss. The sooner you take the pain, the better.
Where is the best place to advertise my car?
How will you advertise it? In a newspaper? The Internet? Or simply put a for sale sign in the window with your number?
The internet is by far the cheapest and most effective place to advertise your car. There are many free sites you can use. For example surf4cars; cars4sale; carfind; automedia; gumtree; auto trader and vottle to mention a few. There is one smalls type paper (Cape Ads/Junk Mail) that accepts free print ads from private sellers. All the other newspapers will cost you dearly to advertise and are not as effective as the internet.
How do I screen the inquiry calls?
So let's assume you get a few calls. Some will be time wasters, but maybe there will be a few genuine buyers amongst the callers. How do you tell which are the genuine buyers? Ask questions as well as answer questions. What do you do if someone wants to test drive your car? Try to never be outnumbered or allow only the prospective buyer to drive whilst you go along as a passenger. Always ask to see the buyer's driver's license - for very obvious reasons.
How quickly/slowly should I negotiate?
Don't reduce your price too quickly. Play the waiting game, but at the same time bear in mind that 90% of all buyers will make a buying decision within 72 hours (3 days).
What paperwork am I required to give the buyer?
Once you have successfully concluded the sale, you must now deal with the paperwork.
The buyer will need an invoice. All you need do is write one out on a blank sheet of paper. It should contain the word INVOICE; your name and address and contact number; the buyers name and address and contact number; a full description of the goods (For example: One used 1995 Toyota Corolla 160 GLE, Registration Number: Engine Number; Chassis Number); and of course the price of the goods. You should also note any special terms of sale like Roadworthy certificate only or No warranty supplied or Sold Voetstoots.
Also ensure that you obtain a copy of the buyers ID book as well as proof of residential address.
Once the handover takes place and you have the money either as a bank guaranteed cheque; cash or Electronic internet transfer, you must give the buyer:
The original registration certificate
A transfer form (Yellow) obtainable from your local licensing office which must be signed by yourself.
What is the safest form of payment?
First of all avoid taking cash. I will explain this fully on the page called Security and Scams. Your best form of payment is an internet payment, but even this is subject to fraud, so do not release your car until you can physically see the money in your account. Some people fraudulently change the PoP (proof of payment) printout. Once your car is gone, your insurance will not pay out unless you can produce the car keys.
A Bank Guaranteed cheque is fairly safe, but again be ultra careful, as there have been thefts of counter cheques, so accept the cheque, bank it, and only release the car when the bank informs you the funds have been transferred.
Avoid personal cheques at all costs. No serious buyer would expect you to accept a cheque for such a large sum of money.
How long does the buyer have to transfer my car onto his name?
Ensure your buyer understands that he has 21 days to transfer the vehicle onto his name. Failure to comply will render him liable to penalties. And speaking of penalties, I would advise you ask for proof that he has transferred the car onto his name, otherwise you could end up being arrested at a roadblock for failure to pay a traffic fine which you might not have incurred, but which you will remain responsible for if the car is still in your name. This is not something you want to experience (a weekend in jail)
Where am I allowed to display my car?
If you have elected to put your car on display in a public space, you need to be aware of the municipal bylaws. Open pavements have been a popular place to sell cars of late, but many residents lodge complaints. Some authorities are very strict about banning this practice and you could find your car being towed away and impounded. So don't rush in and do something which might be illegal. Inquire first.
How safe is it to leave my car on display in a public space?
There are certain ‘pavement garages’ as we call them, that attract all manner of rogues and it is common to find accident repaired and even stolen cars on display. The SAPS are aware of these hot spots and regularly inspect cars on display. If you park your car for sale there your car will be tarnished by the same brush or you could be subject to parts being stolen off your car or be the subject of police raids.
There are requirements by law for trading to take place which include public toilet facilities and certain documentation has to be in place. These laws are being tightened up and 2009 may well see the end of pavement trading of used cars.
If I find a willing buyer for my car but he needs to obtain finance, what is the procedure?
If your buyer intends obtaining finance to buy your car, it is another ball-game altogether. You may not apply for finance on his behalf. He must go through the application process himself at a finance company of his choice. There are very few banks who will do private financing nowadays. There are only a few institutions remaining who are willing to fonance private deals. The best known is AA Autobay.
What are my obligations if I have sold my car “subject to finance being approved”?
A finance application can take anything up to 10 days. Until your buyer gets an answer on his finance you have no definite sale. What happens now is that you and your buyer have agreed on ‘terms of business'. You need to be really careful now, because if you have agreed to keep the car for him until his finance is approved or declined, you legally may not sell the car to anyone else. So what will you do if a cash buyer arrives the next day and is willing to pay your full asking price and take the car away immediately? It will be an enormous temptation to do that.
Only 2 out 10 finance applications are being approved at the moment. That means you have an 80% chance of your buyers finance not going through. Moral of the story is DO NOT AGREE TO KEEP THE CAR OFF THE MARKET FOR ANY PERIOD LONGER THAN 24 HOURS. Preferably keep your options open and insist that the car remains for sale and the best policy for the seller is FIRST COME FIRST SERVED.
If my buyer does get finance approved, what am I required to provide?
Lets assume that your buyer does get his finance approved. You now have to supply the bank with proof that you have paid in full for the car; that it is on your name; a copy of the roadworthy certificate (You may not sell a car through a bank on a Voetstoots basis). There is a fair bit of paperwork you have to comply with. Your buyer will need to sign the contract at the bank's premises after which he will be given a release note.
When he collects the car from you, he must sign the release note and hand it over to you. Once the car is registered with the buyer as Owner and the bank as Title Holder, you may then go to the bank and hand in the release note, after which you will get paid.
Remember that the buyer has a 5 day “cooling off period” during which time he may return the car to you if he is not satisfied. These matters are enshrined in the National Credit Act. Check that page for more detailed information on the Act.
These procedures are complex and very time consuming. Many of the banks no longer want to finance private deals - mainly due to the inability of the seller to provide adequate backup service.