“Good luck man. Nobody is buying used cars right now. You should have sold it six months ago before COVID happened.”
One of my friends recently told me that. 😔 And at the time I agreed. With most people working from home and restricting their travel, I thought we’d have a really hard time getting rid of our second car.
Fortunately, it was easier than we thought! We sold the KIA Soul 2013 to my wife just last Saturday. Woohoo!
We got a great prize – $ 7,700 (well, we feel great about it) after just 4 days of online advertising. It was a win / win deal for us and the lovely couple who bought it.
My friend was right about one thing … We should have sold it six months ago. Actually, we should have sold it two years agoThe moment we realized that we could get along well with 1 vehicle.
The cost of an unused car …
I checked the numbers recently and it’s pretty shocking to see what this little Kia cost us just sitting there without using:
- CA admissions fees: $ 154 / year
- Car Insurance: $ 475 / year
- Annual Parking Permit: $ 34 / year
- Depreciation: $ 1,248 this year **
Total: $ 1,911 for the year … or $ 159 per month!
Remember that is without driving it. The travel costs for gasoline / maintenance would have added up even more! Cars are the worst.
I’m a little embarrassed to share all of this. I sit and write personal finance articles all day and knowingly pulled $ 159 a month out of my wallet! There is no excuse. I think the reason we kept the car for so long was because it was paid for in full (a sunken expense error) and also a combination of laziness and misperceived convenience.
What’s worse, there is a huge missed opportunity cost. For every $ 1 in negative equity in a depreciating car, that’s $ 1 in equity Not help build prosperity for our future!
Well If the best time to sell our car was 2 years ago, it was The next best time is now!
**I use this car depreciation calculator to learn something average depreciation would look like a 2013 car valued at approximately $ 8,000 over a 5 year holding period.
Such a cool calculator! But also very depressing to learn how quickly your car is devaluing. With expensive cars it is much worse 🙁
Selling a car online
I have only sold a few cars online in my life. Every time I learn something new and get a little better with the process. My first step was to do a series of online research to find the best approximate vehicle value. Since our KIA had low mileage for its year (only 43 km – not bad for a 2013 model), I knew we had better sales opportunities than similar cars at that age.
I looked at the value of the Kelley Blue Book first and they estimated the car’s fair market value for private sale: $ 6,673 – $ 8,190.
Then I compared these numbers with Facebook Marketplace, Autotrader and Craigslist. In 2013, Kia Souls were advertised between $ 3,000 for a shitty junk car and $ 9,000 for dealer prices.
All in all, my wife and I decided to list it for $ 8,500 and see what happens. If necessary, we can always lower the price later.
By the way, did you know that Kelley Blue Book is now making instant CASH deals?
I found that quite interesting … KBB is now working with local dealers to offer cash for used cars. Unlike a trade-in, you don’t have to buy another vehicle from the dealer to receive this cash price.
After filling out a detailed form on the website, we were emailed a cash offer of $ 5,662. I could take this to a participating dealership and get rid of it right away.
That was actually pretty tempting. The thought of taking it to a car dealership and going out with cash that afternoon was really exciting. However, knowing we could probably make a few thousand more for a little bit more hassle, we decided to do the hard work and sell it to a private buyer.
Photos, photos, photos!
Before I pulled out the camera, I got the car completely washed, waxed and smelled like new. This cost me $ 69.95 at the local car wash – apparently their prices have come down a lot because nobody drives much these days!
Next, I drove to a nearby parking lot and took photos with my iPhone. Of everything I’ve read online about selling cars, the photos matter! Showing high quality photos will attract high quality buyers. (Remember to cover your license plate in all photos!)
Another strong recommendation I heard was to Take a photo of the keys, original manuals, vehicle history report, title and any repair documentation. (Check out the image below.) This seems like a useless photo, but showing an interested car buyer that you keep records neat and tidy goes a long way! They also stand out from the other ads!
Did you know Craigslist will charge you $ 5 to put cars on sale now? When has this started? I think it’s an attempt to minimize the number of fraudulent ads and users. But it didn’t stop me from getting a lot of scam replies. About 5 minutes after posting online, I got emails from people with lowball deals or asked for the VIN number with no explanation.
After 2 days we were finally contacted by interested buyers who wanted to check out the car.
COVID, Cleanliness & Craigslist
I was probably most nervous when I touch strangers and let the car drive. My wife and I agreed to meet the prospective buyer, but if we got any weird feelings we’d just politely apologize. We brought disinfectant wipes and some hand sanitizer to the meeting.
After greeting them and chatting for 5-10 minutes (socially distant, of course), they rightly sounded interested. They took the car for a quick test drive and offered us $ 7,700 cash as soon as they got back. My wife and I were happy with it so we accepted immediately. Done deal.
As much as I wanted to rub the 77 hundred dollar bills in my face, I didn’t. We washed our hands and disinfected everything when we got home. 🙂 🙂
Why are people buying cars right now?
This whole process was shockingly simple. I had just assumed that nobody would buy cars now. But there are people out there looking for used cars …
The couple we sold moved to LA from New York a few years ago. They’ve lived without a car for a few years – they work near their home and could take Uber with them almost anywhere they need to go.
But now with COVID, they are not comfortable using Uber or public transportation. Since both work from home and are cramped in a small apartment, they wanted a small used car just for weekend use. You want to drive up the Pacific Coast Highway and visit the northern secluded beaches. Camping, hiking, and just being outside enjoying Southern California.
The guy who bought it admitted he knew he was going to lose money with a car. But I think it’s better than losing the mind that’s been in your house all year?
- Wifey and I sold our replacement car on Craigslist for $ 7,700.
- Should have done this years ago, we’re idiots.
- Cost us $ 159 to stay in the garage – cars are a money pit!
- KBB now has instant offers (they appear to be low) and craigslist is no longer free. A motor vehicle listing is now charged $ 5 🙁
- If you are selling a car online, include a nice photo of the keys / manuals / papers. Good photos attract good buyers!
- People are still apparently buying used cars regardless of the pandemic hotspots.
Next, all I have to do is visit the bank and transfer that money to our brokerage account! VTI all the way 🙂 Feels good to tick another 2020 goal off the list and turn a depreciating asset into an appreciative one!
What about you? Do you drive less and / or less? Are you thinking of getting rid of your car?