What can you realistically expect from a private party sale of your vehicle, or if you decide to purchase a car from a private party? Let’s look at both options.

Selling Your Car Yourself – Private Party Style

You will usually get more money for your car if you sell it yourself through Craigslist or Carsoup or some other online classifieds site, but you’ve got to factor in the opportunity cost. I work with a lot of people who don’t even consider it, it’s too much hassle and a couple of thousand dollars doesn’t make it near worth it, their time is far too valuable.

It will depend upon your time, and the car you’re trying to sell. It’s a tough market for a lot of things these days, you can have a look at some auto classifieds and see that there are some cars that are almost sale proof unless they’re really cheap, just have a look at one of my recent articles regarding a Mercedes-Benz 450SLC here in the Twin Cities on the other blog, Affordable Classic Car Reviews.

A few tips… if you want to really sell your car, price it very aggressively. Don’t turn to price guides to figure out what to ask for it, you need to search for comparable cars for sale on the same classified site that you plan to list on. That will give you a much better idea of your local market, or at least what your ‘competitors’ are asking for their cars. Also remember, the price people list, the ‘asking price’ is often very different from what the car actually sells for, the ‘sale price’. I’d suggest pricing your car a few hundred dollars above what you really want for the car, expect the buyer to try to haggle a little bit.

Look at the prices, see how long the cars have been listed, price your car aggressively if you want to sell it and get on with your life, price it high if you want to answer a lot of phone calls for the next few weeks and spend your weekends chatting uncomfortably with a stranger in your driveway while he asks you “So, why are you selling it?”

When someone comes over to look at the car and they want to drive it, always go with them, and make sure someone else is with you when you show the car, keep your cell phone in your pocket. I don’t want to be alarmist here, but you have to be safe. A friend of my brother’s in Colorado let two guys take his BMW 3 series for a test drive after they pulled up in an older BMW and told a good story about how they’re BMW enthusiasts and are looking for a newer car, they seemed nice enough, well dressed, well spoken, they seemed legitimate.

They went on the test drive themselves and never came back, the old BMW they pulled up in? It had been reported stolen earlier that same day. It was a tough story to tell the police, he essentially just gave them the car, a really dumb mistake, and of course the car was never recovered.

As you can see, N.A.D.A. doesn’t even address this value, perhaps because they are an acronym for National Auto Dealer Association, they’d rather you buy from a dealer than a private party? I don’t know.

You can generally save a little money buying a car from a private party initially, but you often end up spending more right off the bat once you figure out that the car has needs, even if it’s just routine maintenance, a used car bought from a private party will have needs.

Some vehicles lend themselves to private party sales better than others. Specialty vehicles or older vehicles come to my mind here. Convertibles, coupes, two seaters, sports cars, these kinds of cars that were perhaps someone’s extra car or fun weekend car are often sold private party. You might find that enthusiast selling his grey market mid eighties Mercedes-Benz 500 SL, chances are you’ll never find one of those at a dealership. So if that’s what you’re looking for, private party might be your best bet.

The bottom line is that you must really do your due diligence when buying a car from a private party. Absolutely take the vehicle to a mechanic you trust to do a pre purchase inspection of the car! Spend the $100 or $150 it will cost to have him look the car over and give you an idea of the true condition of the car, underneath. If the seller won’t let you do that walk away from the car, the seller is clearly hiding something.

You have very little recourse if you buy a car from a private party and it turns out to have a bunch of needs or if you feel the car was misrepresented. Even before I worked for a franchised dealer I felt better about dealing with a dealer when looking for a used car.

Dealers have to inspect their cars, they generally spend a lot of money reconditioning cars to get them ready for sale. They have a reputation to protect, they have a physical location where you can go and raise hell if you believe the car was misrepresented before you bought it, you can write to the better business bureau and complain if you have to. A private party sale is a caveat emptor situation with very little recourse. According to these “price guides” you might pay a little more at a dealer, but you’re also getting more.

Private party sales vs. a dealer purchase generally come out to about the same number because you’ll have to spend money on the car to bring it up to the same level as a dealer car. A private party obviously can’t sell a Certified Pre Owned car that carries extended warranty either. Even if a car at a dealer isn’t advertised as “Certified Pre Owned” through the factory program, say, a Mercedes-Benz from our dealership that’s more than 6 models years old, in most cases you can still buy an extended warranty.

Now, don’t run for the hills because I just mentioned extended warranty. There are some very good, cost effective extended warranty options available aftermarket, you just need to make sure you’re getting a good warranty, I wouldn’t even deal with a dealership that offers “Billy Bob Fly By Night” type of warranties. You want a warranty that’s good anywhere in the country with a good reputation, one that the dealer has used for many years. They are out there, and for many vehicles, they’re the best option.

In the end, where you buy your next vehicle will depend upon the vehicle you’re looking for and what makes you feel comfortable in the transaction. Price is one aspect of the deal, but don’t end up saving $1000 on the purchase price so you can spend $2500 after the sale.

Check back later this week for the third anf final installment in this three part series “Mercedes-Benz Prices – Kelley VS. N.A.D.A. VS. Edmunds VS. Reality” where we’ll explore dealer retail and certified pre owned values.