Selling a car in a down market
The used car market has dropped
Most people have seen the major drops in used vehicle pricing across the last 6-9 months, but some still have good reason to sell the dip. There are a few reasons why you might consider selling a car when used car prices drop:
You need to sell the car quickly: If you need to sell your car quickly, for example, because you are moving or you need to purchase a different car, you may be more motivated to sell the car at a lower price.
You can no longer afford the car: If the value of your car drops significantly, you may find that you can no longer afford the monthly payments on your car loan. In this case, selling the car may be the best option to avoid defaulting on the loan.
You want to upgrade to a newer car: If you have a car that is several years old, you may be able to sell it for a lower price and use the proceeds to purchase a newer car. This can be a good way to upgrade to a newer car without having to pay full price.
You no longer need the car: If you no longer need the car, for example, because you have switched to public transportation or you have purchased a different vehicle, you may want to sell the car even if the price is lower than you hoped.
It’s important to carefully consider your options and do your research before selling a car when used car prices are low. You may want to consult with a financial advisor or a car dealership to get a better sense of the current market conditions and the best course of action.
Many loans are now underwater
If you have an underwater loan on your car, it means that you owe more on your car loan than the car is worth. This can make it difficult to sell the car, as most buyers will not be willing to pay more for the car than it is worth. Here are a few options to consider if you need to sell a car with an underwater loan:
Sell the car to a private party: Even if the car is worth less than the loan balance, you may be able to find a private buyer who is willing to pay the loan balance or close to it. You may need to offer financing to the buyer to make the sale more attractive.
Sell the car to a dealership: Some dealerships may be willing to purchase a car with an underwater loan if the car is in good condition. However, you will likely receive less for the car than it is worth, as the dealership will need to make a profit when they resell it.
Refinance the loan: If you have good credit, you may be able to refinance the loan to a lower interest rate. This could lower your monthly payments and make it easier to sell the car.
Turn the car in to the lender: If you can no longer afford the payments on your car and you cannot sell the car, you may be able to turn the car back into the lender. This is known as voluntary repossession, and it will have a negative impact on your credit score.
Keep the car: If you are unable to sell the car and you cannot afford the payments, you may need to consider keeping the car and trying to pay off the loan. This may require you to make extra payments or pay off the loan faster by making larger payments.
Make sure to sell your car to the right service type
Many services claim to buy any type of vehicle, but they often have a particular specialization or focus, and this can significantly impact the price they offer for a particular vehicle. For example, a service that specializes in newer sedans may offer a good price for a 2021 Camry, but a low price for an older pickup truck like a 2010 Ford. While you can still sell the Ford to this service, you may want to consider other options that specifically cater to older trucks for a potentially better price.
Selling vehicles that fall outside of the typical categories, such as salvage vehicles, can be especially challenging when it comes to getting a good price. Salvage vehicles are cars that have been declared a total loss by insurance companies, but can be repaired and given a rebuilt title. Many services may not be interested in purchasing these types of vehicles, which can make it difficult to get a good price for them.