How Does Selling to a Dealer Work?

how-does-selling-to-dealer-work Selling a car to a dealer | illustration by Paul Dolan

When you have a car you need to sell, selling it to a dealer is the easiest way to unload it. Many dealers will buy your car for cash without requiring you to use it as a trade-in to buy another car. With the ongoing inventory shortage and rising used-vehicle prices, it’s a lucrative time to sell. And as dealers scramble to fill their lots, they’re more likely to make the process as quick and painless as possible for you.

One of the best parts about selling your car to a dealer is that you don’t have to worry about trying to find a buyer for a private sale. This means you can sell the vehicle faster and avoid hassles like meeting up with potential buyers or dangers like fraud. However, there are still a few steps you’ll need to take to make the process go smoothly — and to get the best offer.

Related: Latest Car Selling Advice

How to Sell Your Car to a Dealer

First, you’ll need to decide where to sell the vehicle. Although it’s not a requirement, choosing a dealership that sells the same brand as your used car can result in a better offer; that’s especially true if it’s a newer car in good condition that can qualify for a certified pre-owned program. Call several dealerships and inquire about selling your vehicle prior to showing up.

Before you pull into a dealer lot, make sure your car is ready to be appraised (see more on prepping your car) and that you’ve done some research on how much it’s worth. Consider the cash value as well as the trade-in value: Trade-in value is usually lower than a vehicle’s market value, but the convenience of selling to a dealer can make it worthwhile.

You should also make sure you have all the necessary documents (especially the car’s title, if you have it) and valuable accessories, such as extra key fobs. Extras are a good way to negotiate a better deal with potential buyers, even when that buyer is a car dealer.

What to Do When You Arrive to Sell Your Used Car

When you arrive at the dealership, inform the salesperson that you’re there to sell your car; that salesperson might be able to help you, but in some dealerships, you’ll be directed to the used-car manager (specific titles may vary from dealership to dealership). That person will take down your information, inspect your car and run the vehicle identification number through a vehicle history database to check for damage and accidents. They will likely ask you if you are using the car you want to sell as a trade-in for a new car. You may be offered more money “on paper” if you are using the car as a trade-in than if you want to sell it for cash. However, most dealers will allow you to sell your used vehicle even if you don’t buy a new one, especially as inventory constraints linger on.

While the salesperson is gathering information about the car, the dealership may have its service department check out the vehicle’s condition — particularly its tires, brakes, fluids and mechanical parts. They may take the car for a quick spin to see how it runs. After that, it’s time to get your offer.

The Offer

The offer you receive will depend on several factors, but it will mostly rely on the price being paid for similar vehicles at auction. Other factors that could influence the offer include whether or not there are similar cars on the lot for sale already, the condition of your vehicle and whether your vehicle needs any maintenance or repairs to make it ready for sale.

If you still owe money on the car, this may also have an impact on how much you are offered. The dealer will usually be able to handle the details of paying off the loan and getting the title. If the vehicle is worth more than you owe on it, the dealer will deduct the loan payoff amount from the offer, and you will get a check for the difference. If you still owe money on the vehicle, you’ll be responsible for covering the difference.

Many dealers focus on making this transaction transparent. The internet has changed the car-buying and selling process, and consumers now have access to tools that can help them estimate the value of their car before they set foot on a dealer’s lot. If you have questions about your offer, ask them; many dealers will show you current auction prices or other online tools and sites they use.

Get Multiple Offers

Even though you’ve done your homework in advance, remember that each dealer is different. If the dealer you’re visiting has too many models of the vehicle you’re trying to sell, it may lead to an offer that’s lower than what you were hoping for.

If getting the most money for the vehicle is a more attractive proposition than selling it as fast as possible, it’s a good idea to shop around for the best offer.

Close the Deal

Once you have multiple offers, weigh each one against offers from other dealers, or from places like CarMax, and choose the one that’s best — and remember, you can always try to negotiate, as well. But be quick about it: A dealer’s offer could change as the market changes, so if you spread this process out over a few weeks, you may find yourself disappointed when you finally decide to act.

Lastly, make sure you discuss the terms of the sale and when you should expect to receive payment from the dealer; it’s not a guarantee that you’ll receive a check the same day you sell the vehicle.

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