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How to sell your car
It occurs to me that this is an obvious follow-up to my previous article about how to buy a used car. If you buy a car without trading in your old one, then you'll need to sell your old one off. But never fear, it's not that hard!

Why not trade in

I have now sold 3 cars and bought 5 through the used market, and I've been more and more happy with avoiding the experience of trading in my car. Specifically:
  • You will likely get much more money for your car on craigslist than if you trade it in with a dealer. Dealers simply give you much less money for your car. Although I feel that this is basically a scam, it's built into the "blue book" value. (See below).

  • You can decouple the transactions of buying a new car from selling your current one. When you trade in a car, you're giving the dealer a large second profit margin in which they can conceal the true value of the transaction of the two cars together. With no trade-in to muddy the waters, you will be able to negotiate more directly, and know what you're really paying for your new car.

Why trade in

Still, there are some disadvantages to self-selling:
  • It takes time and effort for you to prepare the car for sale, craft the advertisement, market the car, meet potential buyers, and then close the deal. For merely the price of getting screwed out of thousands of dollars, a dealer can make all this go away for you. Not that I'm bitter.

  • You'll need more cash to cover the new car until you've sold the old one. With a trade-in the dealer simply deducts a large sum from the new car's price, which means you don't have to float the cash. If you buy your new car first and then need the money, you may find yourself in a rush to sell the old car, which is stressful and may cause you to accept a needlessly low offer.

  • You have to find room for an extra car while you're selling the old one. This means keeping it around somewhere and keeping it clean enough to show to buyers. If you have a big driveway this is no big deal, but if you live in an apartment with assigned spaces, this can suck. Alternatively, you have to live without a car if you sell the old one first.

  • You're at the mercy of buyers out there. If you can't sell in a large metro area, it might be difficult to find a buyer unless you're selling a very common car for your area. In California I haven't found this to be a problem, but your mileage may vary.

  • If you have a difficult-to-sell car then dumping it on a dealer might be worthwhile. If the car is damaged or has major mechanical problems, you could attempt to convince yourself that the dealer will fix it, and not just trick someone uneducated into taking it and having all the problems that you used to have with it. It's your conscience.
But if you can live with some of these drawbacks, I would point out that it doesn't really hurt to try and sell your car. You might be surprised at how much interest there is or how valuable it is. And if it doesn't go well, you can fall back to trading it in or else taking it to one of those CRAZY EDDIE SELL YOUR CAR FOR CASH places, although I have never done this.

So if you've got time and you'd like to save a few grand, here's an overview of the process.

1. Estimate the sale price

It's a good idea to do this early on, because understanding the financial magnitude of the transaction may affect your thinking. For example, it might change your mind about whether it's worth selling at all, or it might change your mind about how much you can afford to spend on the replacement car. Here are 3 tools for estimating how much you'll get from your sale:
  • Kelly Blue Book lets you input your car and out pops a price. You want to look at the "Private Party" price, in "good" or "excellent" condition. Be sure to accurately enter the model, trim, and options, and especially the mileage! Miles and trim levels can change the value by thousands, so it's worth getting these right.

  • Edmunds has a similar service that lets you estimate the "True Market Value" of your car. TMV is lower than KBB, but it sometimes does a better job of estimating value for cars with a "cult following" that otherwise throw off the standard estimate tools. Personally I've found Kelly to be better for Subarus, but Edmunds better for BMWs, for example.

  • A more difficult to use but in a way more accurate tool is to simply look at Craigslist and AutoTrader and see what cars like yours are actually selling for. You won't be able to get a precise estimate since there won't be any cars with identical mileage, but it's a good way to judge the biases of the aforementioned estimation services.

2. Prepare the car for sale

The better shape your car is in, the easier it will be to sell. On the other hand, it's not cost-effective to spend unlimited money on speculatively shining up the car. The goal is to bring the car up to "good-to-excellent" condition for as little money as possible. Here are some suggestions:
  • Fix body damage up to 10%ish:
    If the car has major dents or damage (like, the size of a basketball) then it's going to be some trouble to sell. The newer and more valuable your car is, the more it's worth it to fix that stuff at a body shop before you bother to list it. For example, if your car would be worth $15,000 in excellent condition, then it's probably worth spending a thousand or two at the body shop to repair a really nasty crunched quarter panel or something. But if your car is only worth $5000, it's certainly not worth spending $2000 to fix dents. I would try selling the car as-is first, and only repair it if it seems like it's not selling. The good news is that buyers shopping for a cheaper, older car will also be more tolerant of imperfections.

  • Resolve mechanical issues:
    If there are noises, smells, or broken features of the car that the new owner would likely care about, it's worth having a mechanic deal with them if it can be done cheaply. (Go get an estimate, at least.) If there are small issues ("windows roll up slowly" or "CD player sometimes doesn't work" or "steering feels weird when the car is cold") I would NOT fix those. They'll be expensive and the new owner could potentially not care about them.

  • DON'T do maintenance:
    If the car is near / only slightly overdue for any scheduled maintenance (like 60k) or wear maintenance (like brake pads), it's not worth it to do those things before the sale. Private party buyers understand that the car costs less than it would at a dealer because they have to assume the maintenance burden of the brakes, tires, oil, etc. It's priced in, so you don't have to spend that money.

  • Remove your "improvements":
    If you have an aftermarket stereo, put the stock radio back in if you can. If you have other modifications such as phone holders, navigation unit wiring, suction-cup note pads, fuzzy dice, bumper stickers, seat covers, dream catchers, license plate frames, shift knobs, steering wheel covers, or cupholder decorations, take them all out. The buyer may not share your taste in improvements, so it's best that they encounter your car as they expect it--- in factory condition.

  • Detail the car:
    It's always worth it to spend $75-$100 to have the car detailed before a buyer sees it. Shiny, clean cars are objects of desire and will help your buyer fall in love with your car. This will also help the interior look its best and not make the car feel quite so... used.

If you aren't going to drive the car while you're trying to sell it, then you can just detail it and leave it in your garage, at your work garage, or under a car cover if you have space.

If you have to leave the car on the street or continue driving it while it's for sale, you might try to arrange to have it detailed immediately before a buyer sees it. This is more of a hassle but it will save you some money if the car gets detailed and then immediately splashed with mud or whatever.

3. Photograph the car

Lots of clear, well-made, high quality photographs of the car will make a big difference to online shoppers. A typical clueless craigslist poster will put up 3 grainy cell phone photos that make the car look like it's "probably black". Don't be that guy.

You'll notice, in contrast, that the dealers always get the car clean and then take like 50 pictures of it. This is what you want to do. Here's a checklist of photos that I always take:
  • The exterior from each of the four corners (from about 20 feet away)
  • Representative shots of the interior and the seats
  • A close-up of the odometer reading
  • A close-up of the VIN plate
  • The engine bay
  • The inside of the trunk
  • A shot of the dashboard and center console which shows the radio
  • A shot of the center console that shows the shifter (to confirm the transmission type)
  • Close-ups of any damaged paint or ripped interior that you intend to mention in the advertisement (see below)
  • Features or angles that you think are attractive about the car, like the sunroof or the gigantic spoiler.
Prefer corner shots of the car with the front wheels turned away from the camera, so that the viewer can see the wheel. It is more informative and it looks better. You can judge what angles of your car look the best, but I think most cars look better from the corners than from the sides.

Upload the pictures to somewhere globally accessible. I host large versions of the images on my own web server, but you can use Flickr or Blogger or one of many other image bucket services. (Don't use Facebook or any service that requires buyers to sign in to see the pictures. You can test by making sure the pictures appear when you use Chrome's "Incognito Window" to view them. If it works, then no authentication is required.)

Here is the last set of pictures I did for a car ad (click to enlarge):

4. Write the ad

I write a fancy web page because I am compulsive, but you can just write a Google doc and then paste it into Craigslist. Depending on the kind of car, you might write a few nice sentences about the car's best features ("very reliable!" or "great for Tahoe!" or "fun to drive!" or "great for kids!") The best way to market the car mostly depends on the car and the likely buyers.

Regardless, there are some facts that every car advertisement should include:
  • Year
  • Make
  • Model
  • Mileage on the odometer
  • Your asking price
  • Body type or trim type. (depending on how many styles of this car were sold this year, you might have to be quite specific here.)
  • Clean title (I assume you're not trying to sell a salvaged car)
  • If you don't want to negotiate, say "firm" after the price
  • Which optional equipment the car has. (If you want to be safe you can just do what dealers do, and list every feature, down to "power door locks" and "seats 4".
  • How you want to be paid (I always say "Cashier's check or cash only, no personal checks. No shipping.") If the amount is more than a few thousand I also say "no cash".
  • Where the car is located, and/or the range of places you're willing to meet prospective buyers.
Known Issues
Personally, I want the buyer to know everything that I would want to know about the car if I were buying it. To that end, I mention every issue I know about in the advertisement. If there are scratches, dents, upholstery rips, or other damage, I include photographs of them in the ad. I also mention any mechanical issues I know about.

You don't have to be as complete, and much depends on your conscience. But consider this: a misleading advertisement is likely a waste of time and cause a poor transaction for you. Buyers will be excited about the car based on the ad and will take up your time scheduling meetings to see it. But if upon seeing it they are disappointed, they'll walk away or offer you a much lower price because of the surprising things they find about the car in person. In my view it's more efficient to attract only motivated, well-qualified buyers to the "meet-and-drive" stage of the sale. But it's up to you.

Here's the last advertisement I used to sell my STI. I got the price I asked for, by the way: http://www.zerotrickpony.com/rus/sti-for-sale/

5. Post your ad

Once you're ready to start meeting buyers, it's time to post your ad! I would start with craigslist because it's free, but if you're concerned about more exposure or if it's not getting much interest, you might try purchasing an ad on AutoTrader. I've never posted there but I do look for cars there, so I know that it's a place where a lot of people look. If you use craigslist then you'll receive responses via anonymized email. (Although I believe there's no way to respond to the sender without revealing your email address.)

6. Arrange a meeting

This is the bad part. Craigslist has real buyers, but it also has idiots, flakes, and thieves. You should read the Craigslist warning about scams and protect yourself. Here are three things to watch out for (these are not common):
  1. Shipping: Do not deal with anyone who wants you to ship the car. Almost all of the scams involve you shipping the car and then not receiving money for it.

  2. Wiring money: Do not do any wire transfers; people proposing wire transfers are trying to get your bank account information. Only deal with cashier's checks. (See below about cashier's check scams, which DO exist.)

  3. Phishing: Don't give any personal information to someone until they have demonstrated some comprehension of your car. If the response says "I am interested in the item what is your phone no lemme call u" it's obviously just a ploy to get your email address or phone number or both. I ignore these.

Besides scammers, craigslist has non-serious inquiries, flakes, car brokers, and people who are generally bad at communication, grammar, and time management. Unfortunately one of these people will likely be your buyer, so you'll have to field inquiries from them. Some tips:

I like to do this over email as much as possible so that I can process a lot of inquiries at once. I end most emails with "Let me know if you'd like to schedule a time to come look at the car in Santa Clara. I am free X, Y, and Z mornings / evenings this week." I always suggest the next action so that they can get the ball rolling. Be sure to schedule during banking hours.

I don't give my home address until after they've confirmed a specific time. Leading up to the meeting time, I confirm with them (usually the night before) to remind them of the meeting. Often they've forgotten about it and now can't come, so it's good to save yourself this headache.

Prior to meeting, I usually ask something like "which bank will you be drawing the cashier's check from?" This allows you to check the hours and location of the nearest such physical bank (see below), and also to confirm that they're not going to use First Scam Bank of The West. It also reminds them that you expect them to come prepared to buy the car.

If you have an unusually desirable car, especially a sports car, you might say something like "I've had a lot of problems with joy rides, so please don't come until you're ready to buy the car." For a normal car you won't have to say this.

This will likely be frustrating, but once you actually get someone to show up, they will probably buy the car. My cars have always been bought by the first person to come see them. So take heart.

7. Show the car

When you finally get someone to actually show up, it should only take another hour or two to sell the car to them. Let them look over the car. I try to chitty-chat with them as they do this; they're more likely to trust you and buy the car if you get them to like you. This is a good time to check one last time that you've gotten all your possessions out the glove box, compartments, cup holders, under the seats, etc. And ejected CDs from the stereo, if you're selling a car so old that it had CDs.

8. Test drive

ID required:
Before they drive the car, photograph their driver's license with your cell phone camera, and confirm that it's not expired. (As the owner of the car you can be ticketed for allowing an unlicensed driver to drive it, so be sure they are licensed.) You're also going to want to know exactly who this person is in case there is an accident and a police report. This is very unlikely but it's good to be careful.

Stick shifts:
If your car is a stick shift, confirm that they are experienced driving a manual transmission. If during the drive they seem to have lied, simply tell them to pull over to the side of the road. When they do, take the keys out of the ignition and then switch places with them. The test drive is over, drive home. Tell them they're welcome to drive the car more after they buy it.

Stay calm:
During the test drive, try not to freak out. Remember: they'll probably buy the car, so it's about to not be your problem regardless of how they abuse your motor, clutch, and brakes. If they really damage the car then you'll have legal recourse. (This is very unlikely.)

That said, there's no need to allow a long test drive. They should at most need 10-15 minutes, go around surface streets, and one exit on the freeway. If they propose to go further, politely recommend a shorter route.

Close the deal:
Once back in one piece, I usually say something like "So what do you think? Want the car?" If they brought a car guy, you can let them confer by themselves. (Let them look at the car, but take the keys with you.) He / they should make you an offer or walk away within a few minutes.

9. Agree on a price, shake hands

Now you are that used car salesman! At this point they should make you an offer on the car, and you can decide to accept it. If they are savvy, they will make various arguments as to why they should pay a lower price. You can rebut or accept these arguments as you like.

Time, the most precious asset
As with many kinds of negotiations, the person least in a hurry often does the best. If you are in a hurry to sell because you need the money or because you are frustrated by the process, then you're likely to capitulate to a lower price. For example, the buyer might say something like "well I'll take it today for $1000 off the price, but otherwise I'll need to think on it." You may find this tempting if you're in a hurry.

On the other hand, if your car is desirable and you have a lot of interest, then you don't really need to accept a low offer, because there will be others. For example, you might say "I don't really see why I would reduce the price, I've got someone else coming to look at the car tonight." That puts the time pressure on the buyer, and it may cause them to accept a higher price.

If you both agree on the price, shake hands! You just need to get the money and then you're done.

10. Get paid

In-person car purchase scams are rarer than shipping scams, since you have the person's identity, driver's license, eye witnesses, etc. Even so, you should protect yourself in case this person attempts to deceive you. It's not that hard, fortunately.

If you're accepting cash, then you simply need to count it and then you can be satisfied. Touch every bill and, to the best of your ability, confirm that it is real. I would recommend that you drive the cash to your bank and deposit it in the presence of the buyer, before you let him leave with the car. If the sale price is more than a few thousand, you might consider refusing cash and taking only a cashier's check.

Cashier's check
If they haven't already made the check, you can simply go to their bank with them and watch them have the check made. Offer to write your own name on the withdrawal slip so there are no typos. Confirm the amount.

If they're bringing you a check that's already made, you need to verify it before you accept it. There are several scams involving fake cashier's checks, so it's a safe form of payment only if the check is real AND the bank is real. Here's how to confirm payment:
  1. Confirm that the bank is real. It's simplest if it's a bank you've heard of like "Wells Fargo", but they may be using a credit union that's real but obscure. If you see it on Google Maps and in StreetView, and nothing comes up for a Google search of "[BANK NAME] scam", it's probably fine. Or you can just drive there and go inside.

  2. Look up the bank's phone number using 411 or Google, or go there. Do not call the phone number printed on the check. (If it's fake then the phone number will also be fake.)

  3. Call the bank and get through to an operator. Tell him that you want to verify a cashier's check.

  4. The check has a long unique number, read it to them and then confirm the date and amount and also that it is made out to you. (A common scam is to make a valid check but copy it to many recipients, effectively using it more than once.)

  5. The operator may not be willing to tell you any information about the check, but they should be able to positively confirm it. They'll say something like "yes, that is a good check."

  6. This should work, but if it doesn't, don't accept payment. Offer to go to the buyer's bank to finish the transaction. But if they refuse, walk away.

It's very unlikely that anyone will try to give you a fake check, so in all likelyhood this went fine. You can deposit the check as soon as the paperwork is done and they've driven away with your car.

11. Sign over the title

Just like buying a car, but the other way around:
  1. You sign the "1a" box on the title document to give the seller proof that you release the car to him
  2. You write the accurate odometer reading on the title, and then sign the box underneath it to declare that the odometer is correct. (If it turns out not to be, you can face a felony perjury charge.)
  3. You sign again at the bottom (Line 2.)
  4. The buyer should write the sale price on the back of the title in the "price paid" box.
  5. At this time, you write the same sale price on the white top part.
  6. The buyer writes his name and address on the white top part in the "new owner" box. He doesn't have to sign.
  7. You rip off the white top part of the title, which you have to fill out and mail to the DMV within 5 days. This notifies the DMV that the car is not your problem anymore.
  8. The buyer fills out the back of the title. Make him do this in your presence, and make sure that he writes his own name on the title. (This protects you from the buyer attempting to resell the car in your name, an actual scam that I've heard of.)
  9. The buyer takes the brown part, you take the white part.
The car is now sold! Bon voyage. Now go deposit that check. If you accepted cash, don't keep it around! Go deposit it right away.

The "selling price" box
When I have sold cars I have been propositioned by the buyer to write a lower price on the DMV forms than the real price. The purpose of this is to mitigate the sales tax and I'm sure it's illegal. When I have gone to the DMV to register the car (see below) they have quizzed me aggressively about the price of the car, because they know that this evasion is common. I know people who have done it and they get away with it as far as I know, but it's not legal.

12. Release liability

You have to mail the white top part you ripped off of the old title to the DMV. Mailing instructions are on it. Mail it in as soon as possible. Also call your insurance company and drop the car from your insurance. Do this as soon as possible. If the new owner gets in an accident, you want a paper trail that the car is no longer your problem.

Enjoy your free parking spot and your pile of money!
How to buy a used car
Having just recently bought and sold used cars, I thought I might jot down some advice on the subject while it's fresh in my head. (And if you want me to help you buy a car, you can get an idea of what steps I follow.)

Why used

Most people worry that there might be something wrong with used cars and they'll get ripped off. That's a risk, but there are some major advantages to buying used:
  • Save lots of money.
    Most cars depreciate less and less per year as they get older, and the worst year is the first one. So a low-miles, four year old Honda Accord with basically nothing wrong with it will cost about $10,000 less than a new one. But when you sell or trade that same car over the same time period, it will be worth only a couple thousand less. So between buying and selling you could save $8000 over a few years.

  • Know what you're getting.
    The idea that a new model is "safer" for reliability presumes that the manufacturer actually improved the design. But many cars take a step backward in reliability when they get revamped. The best way to know which model years are to be avoided is to see the history of real cars on the road. An older model year has a proven reliability history, whereas the newest model is by definition always unproven. Take it from an engineer, this is not good.

  • Don't deal with dealers.
    I reject the premise that your risk of getting ripped off is somehow lower if a car dealership is involved. Car dealers are, frankly, evil. If you buy used, you have an opportunity to purchase from a normal person, who will be, on average, more honest and more fair. (This may seem surprising, but see below.)

Why not used

There are some caveats to buying used which you should be aware of:
  • Time and effort:
    The deciding-what-to-buy part of used car shopping is about the same, but the actual buying is more time consuming, especially if you end up buying from a private party. You have to work around sellers' schedules, you might have to drive further to reach the car you want, and you might have to wait for the car you want to become available at the price you want.

  • Cash:
    Although buying used saves money, it doesn't save cashflow. If you're unlikely to be able to pay cash for the car (which you'll get back when you sell it, but that you have to kiss off in the meantime), then financing a used car is a little more annoying than financing a new car. Your best bet is to get third party financing through a credit union or a bank. The interest rate won't be as good as a new car loan, but it's doable.

  • Selection:
    Used cars are simply not available with the variety that new cars are. So if you're buying a rare car, or if you're picky about certain rare option packages, it will be harder to find a good car in good shape at a good price.

  • Colors:
    This is the same point as above, but it is particularly annoying to shop for a used car if you want a certain color. It's okay to have a few criteria ("not black") but if you're going to be unhappy unless you get this exact shade of blue, you're going to be shopping for a while. Used purchasing works much better if you're not too picky about things like color.

  • Trade-in:
    If you don't buy a car from a dealer, then you'll have to sell your existing car separately. Unless you just indefinitely accumulate cars the way I do. To me this is an advantage, because selling a car myself decouples the two transactions and usually results in much more money. But if you have a special situation (trying to get rid of a dubious car) then you may not like having to sell it separately. (Perhaps I will write a follow-up blog post about how easy it is to sell a car.)

  • Inventory:
    I've never shopped for a used car in a small town, but it probably sucks. You need to be shopping in a large city so that there's a lot of cars out there in the market. If you live more than 50 miles from a major metro area, your used choices may impractically limited.
If you're still convinced, here's the basic idea.

1. Select some cars

Here I don't mean, specific physical cars. I mean, combinations of make / model / year / colors / options that you think you might be happy with owning, which are around 3 to 5 years old (ideally) and are in your price range (whatever that is). Think of some possibilities and put them in a spreadsheet. It's okay if you add cars that you're not initially sure about, because spreadsheet rows are cheap. If you've no idea how to get started, here are some ideas:
  • Read reviews:
    Edmunds, Car & Driver, Consumer Reports and many others routinely write articles about which car you should buy. There's usually special articles written based on your buying criteria--- best family cars, best 4wd cars, best SUVs, best wagons, best vans, best convertibles, best sports cars. It's all there.

  • Ask your friends:
    Looking for a general-purpose commuter car? Do your friends and family also commute? Find out what kinds of cars they have, and if they like them.

  • A renting experience:
    Did you recently rent a car while traveling? Did you like it? Put it in the spreadsheet. (Especially if you use ZipCar, they have a good variety of cars.)

  • Look around town:
    Are you shopping based mostly on aesthetics? Then next time you notice a car that you think is attractive, make a point of reading the make and model off the back of it. It can go in the spreadsheet. Note the color, if you care about colors.

  • Ask me:
    I'm not so well educated on minivans and trucks, but I know a lot about certain types, like sports cars, performance sedans, and AWD cars. Let's talk.

  • Buy a Honda:
    If you have no idea what you want, but you just want a car, buy a Honda Civic or a Honda Accord. They're simple, reliable, and pleasant. Just don't buy a Toyota Camry, for god's sake.
Remember sales tax!
If you're budgeting somewhat precisely, remember to include sales tax because it can be a significant amount. It depends on where you live, but (for example) in Santa Clara County in California I pay 8.75% tax on cars, which means writing a check to the DMV for over $1500. Don't let this surprise you!

Remember insurance costs
Your insurance premium may change substantially when you buy a new car. Newer cars are more expensive to insure because they are more valuable. Sports cars are also more expensive to insure because insurance companies suck. It's a good idea to call your insurance company ahead of time to get an estimate, so that you can budget accordingly. If you replace a 20 year old Civic with a 2 year old BMW, your premium could easily triple.

2. Narrow the field

Your spreadsheet should now grow some columns, which you'll need in order to compare the possibilities and decide what you want. Edmunds is a great resource for gathering information (especially numeric information) about used cars. You should choose criteria that matter to you, but here are some columns that I think everyone should have:
  • Price:
    You can approximate the likely used price of a car right away using the Kelly Blue Book "Private Party" price or the Edmunds "True Value" price. Depending on the model, KBB and/or Edmunds offer a reasonable estimate of what you'll end up paying. (With some exceptions; certain cars, especially Porsches and BMWs, suffer from Inflated Value Shared Hallucination on the part of their owners. So there can be types where you go to shop and find that nobody is willing to sell for the KBB price. In these situations Edmunds can be more accurate. But KBB is pretty good for more common, more practical cars.)

  • Reliability:
    I consult Consumer Reports for reliability ratings, and fill in a 1-5 score for each car. (3 is CR's "average" rating.) This is the best place to discover which year of the car you want to own. For example, the Subaru Impreza is well rated in 2007 and 2009, but not 2008. Good to know.

  • Availability:
    One of the disadvantages of buying a used car is that you're at the mercy of what's actually for sale. So before you get your hopes up about owning that Audi A3 Quattro, check Craigslist and Autotrader and see if there are any for sale within 100 miles of your house. If not, then you may be waiting a long time to find your specimen, and when you do, you may not get a good price because it's "hard to find".
The rest of the columns depend on your selection criteria. For example, my last car purchase had weight, torque, horsepower, and fuel economy. (And a computed column for horsepower per ton which is an approximation of acceleration.)

You might want other criteria like cargo space, power sliding doors, sunroof, or stereo features.

The Freudian Sort
Here's a pro tip: when I get indecisive I like to add weighting coefficients and numeric scores to each of the characteristics I care about such as "comfort", "fun", "beauty", etc. I score all of the cars and then use a weighted sum to compute an overall score for each car. I then sort the spreadsheet and see which car gets the highest score.

This process is not at all useful for actually comparing the cars. What it does reveal is which car's coefficients I keep fiddling with to get that car to come out on top; that is the car that I choose because I obviously want it badly enough to scam my own spreadsheet to get it to justify my purchase.

3. Drive

You should drive each car type you're considering, well in advance of being confronted with the reality of actually buying one. This is best done by going to a dealership and doing a test drive. You can find dealerships that have that car in stock by searching for it on Autotrader or Craigslist. You can then confirm using the dealer's website; almost all of them have their inventory online.

When you meet the car, you should look at it inside and out, and then drive it. Here is a sample checklist for your visit:
  • Look at the front and back, up close and from 30 feet away
  • Sit in every seat
  • Use the stereo
  • Open every door
  • Use features you care about (sunroof, convertible top)
  • Drive on city streets
  • Drive on the freeway for at least one exit
  • On the entrance ramp, use full throttle. No cheating!
  • On the exit ramp, use full braking. (Warn the salesman you're going to do this, but do it.)
  • On the freeway, change lanes a couple of times. See what the blind spots are like.
  • Go around left turns and right turns
  • Back out of a parking space. Can you see well enough?
Remember that you're not going to buy this particular specimen, so don't worry about trying to diagnose it's condition or possible mechanical issues. Instead, think about living with this car. Do you like how it drives? Do you hate how it bongs at you when you open the door? Does it fill you with terror when you try to merge onto the freeway? Is it loud? Is the stereo infuriating? Does it have room in the back for your stuff? Is it ugly, and can you live with that?

Note: Unfortunately visiting the car will force you to interact with sales people, but you can simply tune them out. Car salesmen are expressly instructed to jabber constantly to keep you from thinking your own thoughts about the car, so you really should ignore them. If it fills you with guilt to take up their time without buying the car, remember: they are evil and they actually lobbied congress to force you to deal with them. They asked for this.

After the first drive or two the reality of your criteria will sink in for you, and it may affect your spreadsheet dramatically. For example, you might realize that you don't actually care about having a manual transmission. Or you might decide that only 350 horsepower is just not enough. Revisit your list of prospects after each drive and reconsider.

4. Shop

Once you've visited every car and loved it or eliminated it, it's time to shop for the particular specimen that you'll end up buying. I prefer Craigslist for this, but Autotrader is another good way to find cars. Use Autotrader's keyword search rather than criteria search based on things like transmission type or body style, because many Autotrader ads don't have the metadata filled in correctly. The year and make filters work fine, though.

I make a spreadsheet of all the specimens I can find online. Here are some things you can look for to screen out cars that you probably don't need to waste your time with:
  • No photos:
    If there are no pictures of the car, don't bother. A person who tries to sell a car without showing what it looks like is not a person you want to attempt to do business with. (Note that some dealers will put up a "representative" picture that looks like a magazine product shot, because it is--- it's not the real car. Skip these as well, they're shady.)

  • No clean title:
    The ad should say "clean title" if it's from a private party. If not, ask. A "clean" title means that the car is currently registered to your state in good standing, and has never been totaled. This is a deal-breaker requirement on every specimen you will consider. (In particular you do not want a "salvage title", which indicates that the car was destroyed in a wreck or flood, but then has been repaired on the cheap. These cars usually they have life-long mechanical and electrical problems. Do not want.)

  • Wishful pricing:
    If a seller is asking thousands more than the blue-book private party price, I wouldn't bother with them. Bargaining is only going to get you so far. (Caveat: if all the cars you're finding are way above fair price, then you may be in an Overpriced Market Shared Hallucination situation, and you'll have to recalibrate your idea of what's affordable for this car type.)

  • High mileage:
    It depends on your price range and the reliability of the car in question, but you probably don't want a specimen with more than 80,000 miles on it. (Less for lower-reliability cars; see consumer reports.) If you're willing to spend more to get a newer car, then shooting for 40-60k miles is a nice sweet spot.

  • Distance:
    It will seem tempting to drive out to Modesto to see a promising specimen, but remember that you have to be willing to walk away from it and waste all that time if you get there and there's something wrong with it. If you can find closer specimens, go to them first--- assign a higher-than-you-think penalty to driving way far away, and only do it if you get desperate.

  • Modifications:
    This won't matter for most cars, but for sports cars you almost certainly do not want a car that has modifications such as suspension, brakes, body kits, and especially engine modifications. These modifications erode the car's value and usually also comfort. AND, the car was probably not modified competently. It's not something you want to own long term. Buy it as the factory intended.

  • Damage and malfunctions:
    I recommend you avoid cars that have anything wrong with them that you couldn't tolerate leaving broken forever. Dents are okay, but it's hard to know the true cost of repairing major wreck damage or non-functioning car features, so you risk that you'll under-negotiate the price and end up eating a large repair cost.

If a specimen passes these criteria, you should give the owner a call or email to ask a few critical questions:
  • What is the VIN number?
    You'll need the VIN for CarFax (see below), but you can also run it through a VIN decoder (use Google) to confirm that the car is the make, model, transmission, color, and options that are represented in the ad.

  • Has the smog been done in the last 90 days?
    At least in California, the seller must get the car to pass smog within 90 days of sale. It's typical for private sellers not to have done this, but they are obligated to legally. I have bought cars without the smog cert, and then smogged the car myself, it's no big deal for a newer, trouble-free car. But if it doesn't pass, the DMV recommends that you return to the seller and ask them to cover the costs of making the car smog. If they refuse, you can take them to court. I've never done this.

  • Does the seller have the title in hand, with no liens?
    Sometimes people sell cars that they haven't finished paying off yet. This means that they can't actually sign the title over to you because their bank has it. This isn't a deal-breaker but it is annoying, because it means that you'll have to pay the seller's bank to get them to give you the title. I've done this before but I was at the mercy of the bank's shitty customer service department to finish the transaction, and they bungled it. They ended up paying themselves $200 in late fees which I had to pay and that I couldn't recover from the seller. It was their own incompetence but I ended up eating it. I wouldn't do this again, so unless you're looking for a rare car, pass unless the seller has the title in hand.

  • Is there anything else I should know about the car?
    A good catch-all question to allow the seller's guilt to reveal anything else that they're going to reveal.
If the seller seems able to form complete sentences, you might follow up with additional questions to bolster (or shatter) your confidence in the specimen. Here are some questions that I ask either ahead of time or during the meeting:
  • What have you used the car for?
    The answer is usually "commuting", in which case it can be interesting to ask the commute distance and route. If the car has spent the last 5 years in stop-and-go traffic for two hours a day, then it's had a hard life.

  • Who drives the car?
    Wives and dads, good. Sons and daughters, less good for wear parts like brakes and clutch.

  • Has the car ever been modified?
    "Not currently modified" is not the same as "never meddled with". It's good to ask.

  • Has the car been to the track? To autocross? Participated in races?
    Only relevant when shopping for sports cars; these are not automatically bad things, but it's good to know. If you have access to a specimen that was driven by an English teacher and never raced, you might prefer that one.

  • Is all scheduled maintenance completed?
    If the car is overdue for expensive maintenance like the 60k, that lowers its value. It also tells you that the owner has not been good about maintenance, which lowers its value.

  • Has the car been smoked in?
    Unless you're a smoker, you don't want a car that's been smoked in. It's really really hard to get the smell out, a simple detailing job will not remove the smell.

Note: you may as well not bother asking these questions of a dealer. They probably got the car at auction so they won't know the answers anyway. At best they'd say "we don't know", but they'd probably lie. Seriously.

5. Schedule a purchase

Once you have some finalists, make plans with each owner to meet and see the car. You have some prep work to do, because you should expect to pay for the car and receive it right then. It's generally rude / unnecessary to see the same car multiple times, so you should be prepared to buy. Here's what you need to do to get ready:
  • Run the CarFax report
    You can, and should, buy a CarFax report on the DMV history of the car. You only need to know the VIN. This will tell you many interesting things, like that the title is clean and whether the vehicle was ever part of a rental fleet. I recommend you avoid fleet vehicles. They're not used with care, and their scheduled maintenance was probably not done. And of course, avoid salvage title vehicles.

  • Prepare payment
    You'll likely be expected to pay with a cashier's check drawn on a local bank or credit union in your area. You'll need an account with sufficient funds in such a bank. You can get the actual check made after you've hand-shaked on the price. (If you're financing, you'll probably receive a blank check from the bank issuing you the loan, which you should have at the ready. You buy the car by writing the check, and the amount becomes your loan.)

  • Allow some time
    I'd estimate two to three hours from first meeting to finish the transaction and be on your way. Longer if you're going to a dealer. So don't schedule a purchase for 60 minutes before your important business meeting.

  • Schedule during banking hours
    You should schedule the meeting for two to three hours prior to the close of your bank. If you decide to buy the car, you can't obtain a cashier's check unless the banks are open. Even if you're getting a loan check or a pre-made cashier's check, the seller will still (if he is smart) want to phone the bank to verify funds. This will require that it is open.

  • Schedule a mechanic or "car guy" to inspect the car
    Many people want to take a prospective used car to a mechanic, and you can certainly do this. It will add some hassle because the seller will need to be willing to go with you to a mechanic, which will take even more time. I don't do this, because (a) I know enough about wrenching to trust my own judgement, and (b) you'd be surprised at how little the mechanic can tell you anyway from a visual inspection. It's easier just to borrow a "car guy" friend (like me, hey!) to come do this part for you. If you're feeling brave and you'd like to take a crack at inspecting the car yourself, see below.

6. Evaluate the car

When you arrive, you'll first look over the car, and then drive it. Your evaluation has two purposes:
  • To find deal-breakers, which are problems that will stop you from buying the car.
  • To find bargaining chips, which are evidence that the price should be lowered to offset problems you discover.
If your mechanic is doing this, make sure he listens to and drives the car. When I do it, I show up with gardening gloves, a flashlight, and a 2 foot square piece of cardboard (to lay on). Here are the technical things from my checklist:
  • Pop the hood and:
  • Look for cracking / dirt on accessory belts
  • Check coolant level (if cold), look for flecks in water
  • Check oil level and color
  • Check brake fluid level
  • Check power steering fluid level
  • Check clutch fluid level
  • Check transmission fluid (if dipstick)
  • Look for aftermarket parts such as hoses, air filters, camber plates

  • Look under the car and:
  • Look at bottom of oil pan for oil drips / moisture / grime (will require laying beside the car)
  • Poke at inner and outer CV boots, look for goo or cracks
  • Look for oil spray from CV joints
  • Check the rear differential (if any) for signs of leaks
  • Wiggle the wheels, check for bearing play
  • Look at the visible brake pads, check for thickness
  • Inspect tire wear
  • Push down on each corner of the car to check excessive suspension travel
  • Inspect rotors for excessive grooving

  • Start the car and:
  • Listen for belt noises, valve taps
  • Smell for coolant leaks
  • Smell for oil burning smells
  • Turn the wheel, listen for power steering groan or belt noise
In addition, there are non-technical things that you don't need a mechanic for:
  • Read the side of the tires and confirm they're as advertised
  • Read the VIN off the plate under the windshield and make sure it matches the car you CarFax'd
  • Read the mileage and make sure it's as advertised
  • Check that the air conditioner blows cold
  • Check that the heater blows hot
  • Check that the turn signals work
  • Check that the headlights and high beams work
  • Check that all the power features work (power seats, power locks, power windows, moon roof, trunk release, fuel tank release)
  • Roll up all the windows and check that the cabin does not have any strong smells. No smoke, no pets, no strong chemical cleaners or perfumes. (Perfumes are covering up some other smell that you might have to live with later.)
  • Turn on the stereo, use the balance and fader to check all 4 speakers independently
  • Check that the stereo features work (FM, AM, CD or whatever)
  • Look carefully at the interior (each seat, the ceiling, the door panels, the floor and floor mats) for rips and stains
  • Look carefully at the exterior (roof, hood, each door, tail gate, fender panels, bumpers) for dents, scrapes, and damage
Next, you should drive the car. My driving checklist:
  • Smoothly shifts into gear (no clunks if automatic transmission)
  • No play in steering wheel
  • Suspension feels solid / not soft
  • Accelerate at full throttle
  • Do at least one redline shift
  • Use all gears
  • Use reverse gear
  • Listen for road noise
  • Listen for exhaust leaks (will sound like loud engine sounds)
  • Apply full braking, activate the ABS (warn passengers that you're going to do this)
If you found any deal-breaker problems, say thank you and walk away. If you didn't, then it's time to buy!

7. Agree on a price, shake hands

If you're negotiating with a normal human, this part is not that bad. I'm not going to give you a lot of really shrewd haggling advice because I personally suck at this. But in theory, the Kelly Blue Book price is (absent any other data) considered a "fair" price. If you are sociopathic and love to argue, feel free to try to abuse the seller to save money, but I don't personally do this. I've met sellers who compromise a little, sellers who compromise a lot, and sellers who don't budge a single penny.

When you do propose a lower price, you typically do so by arguing that the car is not in as good a condition as Kelly's "good" condition criteria, or that the car's condition was not as advertised. Some common strategies I use:
  • If the selling price is above Kelly Blue Book, simply propose to pay exactly the Blue Book value.
  • Subtract hundreds ($300-$800 depending on the model) if the tires will need replacing soon
  • Subtract hundreds (thousands for an Audi) if the brakes are worn out
  • Subtract hundreds or thousands for paint damage, large dents, or interior damage
  • Subtract a hundred or two for a registration that's about to expire
  • Subtract hundreds for abstract worry about noises and smells
  • Point out that the car is overpriced compared to other currently available cars on autotrader / craigslist (even if they're further away than you realistically would go)
If you both agree on the price, shake hands! The car is yours in spirit. Do the paperwork and you're done. If not, then you have to walk away. As they say, "if you're not prepared to walk away, then you're not actually negotiating."

About dealers

Sometimes a dealer has the car you want. This is very sad, but is occasionally unavoidable. (I have come to suspect, by the way, that dealers are buying up used inventory to eliminate the private party trade. So in the future this will probably only become more common.) Buying a car from a dealer is largely the same up to this point, but I have a few additional tips for you:

"Out-the-door" price
The only price you actually have to pay is the cost of the car, sales tax, and a tiny (usually $20ish dollars) DMV fee. There are no other costs, and yet the dealer will present you with hundreds of dollars in "fees" when you get to the money man. To eliminate this annoying fleecing, I recommend you negotiate on the total price after all fees and tax. You should say the words "out-the-door" to make the salesman realize that you understand that random scam fees will be included and that you want to negotiate them all ahead of time. To understand the out-the-door price, simply think of the real price you want to pay, add sales tax, and that's it. The dealer is welcome to charge you any other fees they like, but they have to lower the price of the car by that amount. This will also simplify your process of checking the paperwork at the end.

"Sitting on the lot" time
Pricing for used cars at dealers is all over the map. A Honda Civic in a large city may be priced surprisingly competitively. Or, a rare and desirable sports car may be priced surprisingly high, and you'll find that all the dealers will maintain the same conspiracy and you'll just have to pay if you want that car.

But regardless, all dealers will imply that the car you're shopping for is a hot item, on the brink of being sold, and you should rush to pay a high price TODAY TODAY NOW NOW. Your weapon against this tactic is the CarFax. You'll be able to see when the car was last in the hands of an actual human owner. When you see that it's been weeks (or sometimes months... MANY months), you can point out that the car is overpriced since it has been sitting on the lot for so long and/or has bounced through several auctions without anyone wanting it. I've had this tactic be effective one out of the two times I tried it.

The money man
Unfortunately it's standard procedure for the car dealership to attempt to trick you into paying more money after you feel that you've arrived at an agreement. If you negotiated on the "out-the-door" price then this will be somewhat mitigated, but you should read all of the paperwork and remain defensive until the deal is completely done. Here are some tactics you may face:
  • You may be asked to purchase an extended warranty. It's up to you, but it is not necessarily a good deal. It is also not necessary to buy from the dealer! It's basically an insurance product, which you can buy from other sources. So even if an extended warranty interests you, you don't have to buy it here, now. Personally I never buy them.
  • If you are financing, the loan principle may be higher and the interest rate may be lower than you were verbally quoted. This is the dealer attempting to pay themselves extra using your own credit score, which is better than they told you it was. Do NOT let this happen. Walk away.
  • The contract numbers may simply not match the verbal agreement. Read all of the numbers, and especially confirm the "out-the-door" price. Make the money man print the paperwork over and over again, until it's correct. Do not sign it until it matches your understanding.
  • You may be sold dealer-added options such as "clear coat". Decline these.
  • You may be sold included maintenance. Decline this, because even if it sounds like a good deal, it locks you into the dealer's service department. This is bad. You'll be wanting to go to a more competent independent mechanic.
You're not safe from their tactics until the paperwork, which you read and understood, is all signed.

8. Pay for the car

This is the one good thing about shopping at a dealer; they'll take many methods of payment, including personal checks, credit cards, and they'll even do financing. But if you're buying from a private party, you'll need solid proof of payment to satisfy a savvy seller. Ask to see the title document (it's brown) before you go through with this, since it's annoying to void payment.

Check ID
Before you spend effort on paying this person, photograph their valid driver's license with your cell phone camera. If they object, or they are not who they appear, or if their name doesn't match the name on the title, walk away. It's illegal for an unlicensed person to anonymously middle-man a car purchase, so protect yourself.

Cashier's check
When I pay cash, I drive the seller in the new car to my bank, Wells Fargo. We go inside and he watches me have a cashier's check made. I have him write his own name on the withdrawl slip to put on the check. (It's important not to have typos). If you are presenting a check that the seller didn't see you make, you can suggest he call the bank and have them verify the amount and payee over the phone. (He should look up the bank's phone number online and NOT read it off the check, since that's a common scam.)

Once I have the check, I give the check to the seller and take the keys and the title document. The seller fills out the title information and signs it over to me. See below. Like the fox, the chicken, and the sack of grain crossing the river, Don't leave the seller with both the keys or the title and the check. I think you could recover your money in court, but that would take up a lot of time.

Third party loan
Paying with a third party car loan is much the same; you should have a blank check from the bank that you can simply fill out and hand to the seller. He should be able to call the bank to verify funds.

9. Sign over the title

  1. Verify that the name on the title matches the person you are buying from.
  2. The seller signs the "1a" box on the title document to give you proof that he released the car to you
  3. The seller writes the accurate odometer reading on the title, and then signs the box underneath it to declare that the odometer is correct. (If it turns out not to be, he can face a felony perjury charge.)
  4. The seller signs again at the bottom (Line 2.)
  5. The seller writes the sale price on the white top part.
  6. At this time, you should also write the same sale price on the back of the title in the "price paid" box.
  7. You write your name and address on the white top part in the "new owner" box. You don't have to sign.
  8. The seller rips off the white top part of the title, which he has to fill out and mail to the DMV within 5 days. This notifies the DMV that the car is not his problem anymore.
  9. You fill out the back of the title. You can do this later, when you take the form to the DMV in the next 10 days.
The car is now yours! Drive away. (Also: don't forget to ask the seller for all of the keys to the car. They will promise to mail you the key but they probably won't. Get their email address so you can hound them about it.)

The "selling price" box
When I have sold cars I have been propositioned by the buyer to write a lower price on the DMV forms than the real price. The purpose of this is to mitigate the sales tax and I'm sure it's illegal. When I have gone to the DMV to register the car (see below) they have quizzed me aggressively about the price of the car, because they know that this evasion is common. I know people who have done it and they get away with it as far as I know, but it's not legal. (Interestingly, the "purchase price" box on the back of the title appears below the "penalty of perjury r.e. the foregoing" signature line, which suggests that it might not be perjury to lie on this part of the form. But I am not a lawyer.)

10. Getting home

This is a small thing, but you do now need to somehow take two cars home: the one you arrived in and the one you just bought. If you came to the purchase with a "car guy" or other wingman (which I recommend), he can simply drive the car home for you. When I'm by myself I just park my own car in a nearby neighborhood and drive the new car away. I ask a friend to help me retrieve my old car later. It's not a great idea to leave the new car unattended right after you've purchased it; a lot of weird things could happen if the seller is malicious and has an extra key.

11. Insurance

Most car insurance policies automatically cover a new car that you've just bought implicitly for a few days, so you're not uninsured. (Although if this is your first car and you have no insurance policy yet then you are uninsured, which is illegal. I've never encountered this situation before, but I imagine you ought to buy car insurance with your cell phone before driving away.)

But in most cases, you can just call your insurance company in the next few days and add the car to your policy. You'll need to know the VIN number, license plate, and probably also the make/model/year. Bear in mind that your premium may increase a lot, see above.

12. Registration

The brown piece of paper you just got is not actually your title to the car; it has now become your application for title as the new owner, which you now have to turn into a real registration at the DMV. Make an appointment and then take the paper to the DMV.

You'll have to pay the sales tax at this point, which might be a large sum. They'll take a personal check, because they know where you live.

Pro tip: go to AAA instead
If you have a AAA membership, they can do these DMV services for you at a AAA office. They're much faster and much nicer.

That's it! Phew. Enjoy your new car.
2009 - 2013

Today I sold my Subaru to some kids from Sacramento. They were very nice but I assume the car is as good as destroyed in their street-racing hands. So, rest in peace, beloved machine. You were bloody fast and you never let me down. sniffle.

Photo credit to Jake, who risked his life standing beside Thunderhill to take this picture.

PS: Lest you have any real sympathy for me, know that I sold the car for a ridiculously high price. I then used the money to buy a newer Subaru which is almost as fast and much more practical. So it's fine.

The views expressed on this site are mine personally, and do not necessarily reflect the views of my employer.