Cash in on your car
Chandralekha Mukerji February 8, 2011With almost all car manufacturers having their own authorised used-car dealerships, which promise hassle-free transactions, disposing your old vehicle through them may seem to be the most convenient way. While selling it to these dealers or exchanging it for a new purchase ensures an easier and speedy transaction, it may not prove to be the best deal financially.
According to Banwari Lal Sharma, assistant vice-president, Product, CarWale.com, the price advantage of selling your vehicle on your own can be as high as 15% and may go higher depending on various parameters such as urgency to sell, popularity of the model, etc.
The reasons are quite obvious. When purchasing the car from you, dealers keep hefty margins leaving enough pricing room for them to service, recondition or repair the vehicle and yet earn a profit. "Dealers will obviously take their 'cut' from the seller and sometimes even from the buyer. As a result, the seller gets a lower price and the buyer ends up paying more," says Pankaj Patel, vice-president (India), Carazoo.com.
So, if you are not in a hurry to seal the deal, why sell the car at a discount when you can get a better bargain? Here are some tips to ensure that the sell-it-yourself strategy is successful.
What's it Worth?
The first step is to find out the market value of your car. You can get an idea by visiting some of the auto websites and portals and talking to a couple of dealers. "Add approximately 15% premium on the average price that dealers are offering you to the price tag on your car," says Sharma. Also, it is good to keep the price not more than 5-7% higher than your actual anticipated price. This will give you a cushion while negotiating as even the buyer will want a good bargain," adds Sharma. But be careful not to go overboard as this may steer away genuine buyers.
To get a good price, take a cue from the dealers and make the car as attractive as possible. "Not everybody understands the technicalities but everybody can judge the car on cleanliness and how it looks," says Sharma. So, it makes sense to get the car cleaned and serviced before attempting to sell it.
A new battery, tyres with enough treads left, good exterior and interior conditions, etc, enhance the value of the vehicle. However, if your car lacks any of these, do not bother to repair. "These upgradations are expensive and there is little chance that you will recover the money. It is better to lower the value a bit and let go," explains Sharma.
"On the contrary, you must focus on the smaller things that are easier and cheaper to fix," he says. The idea is to minimise the number of flaws in the car. So, rather than focusing on new tyres and battery or repainting the car, get the blown fuses fixed and the bad headlamp replaced. Also, do not forget to remove all your personal stuff (check the boot, below the seats, the glove compartment and the dashboard) from the car before you show it to a buyer.
Now that you have pepped up your vehicle and calculated its worth, it is time to put an eye-catching 'for sale' sign on it. Using the internet for this purpose is both easy and cost-effective. Apart from specific auto Websites, you can even try social networking sites such as Facebook and Twitter.
While some of these sites may charge you, there are others like Carazoo.com which allow posting ads for free. "An inquiry by buyers is directly forwarded to the seller. No brokerage or commission is payable by either of them," says Patel. Another plus point of posting an online ad is that, unlike traditional mediums, it stays listed until the vehicle is sold.
There are other advantages too. For instance, if your vehicle is not sold within 90 days, CarWale.com will refund the money you paid to put up the ad. Most Websites also offer expert advice regarding the pricing of the vehicle, how to write a good ad, etc.
Once the advertisement is posted, you can expect enquiries from prospective buyers. Their first priority will be to check all the documents of the car, so get the paperwork, such as ownership documents, valid insurance, etc, in order. You can even scan these and make soft copies which can be mailed to potential buyers. "Also, do not forget to pay off the loan if you had financed the vehicle and have an outstanding balance. Get a no objection certificate (NOC) from the lender," says Patel.
Closing the Deal
Before you hand over the car and the keys, make sure you have received the full payment. Ask the buyer to pay either in cash or give a demand draft. If the payment is through a bank cheque, do not transfer the documents till the cheque gets realised. If the buyer requires a loan, approach the finance company together and ask them to help you with the paperwork.
Once you receive the money, you will have to go through a few formalities. The transfer documents can be obtained from an RTO agent and experts recommend that you take his help to make the procedure quicker and easier. If the buyer belongs to a different city or state, you will need an NOC from your RTO office to transfer the ownership. This can be obtained for a fee of around Rs 1,000 and takes roughly seven days to acquire.
"Remember to get the delivery note signed by the buyer," says Sharma. You could also keep a self-attested copy of the buyer's identity and address proof.