How to price a car for sale
The price you set for your vehicles is the most important aspect of attracting a buyer. So how do you price your cars for sale? This may sound like an easy thing to do, but I get asked this question a lot. So if you don’t have this pricing thing down to a science you will sit on your cars longer and will get frustrated as to why they are not selling.
the proper evaluation is key
The faster the flip (turn over your inventory) the more money you are making. So how do you actually price a car for sale? You price the car based on what the “street” is wiling to pay for it. The street is the regional area that you are marketing your vehicle.
Now you may ask why would a person pay too much for a car on purpose? Well, it’s because they did not do the proper valuation before the brought the car. Dealer agents (and people in general) are losing money because they are inaccurately pricing their cars for sale. There are a plethora of resources to evaluate the retail potential of a car. Notice I said potential. Many of us look at Kelly Blue book or some other tool to get the MSRP of the car in question. Most websites that allow you to place classified ads on to sell cars, also have some kind of valuation tool built in. All of these tools use different methodologies and algorithms to valuate cars on a nationwide scale (averages, etc.). You can use 3 different tools and get 3 different MSRP ranges for the same vehicle. All of these tools allow you to adjust for mileage, condition, etc., to get a “true” and “accurate” estimate of you vehicle as it relates to the “retail” value. Notice I put “ “ on retail value, because even that is a subjective value as suggested by the car manufacturer. So with all of these tools in place, how do you figure out the best way to price your car? I recommend Craigslist.
Craigslist gets a bad rap a lot because of scams and other stuff, however Craigslist is my preferred tool for price and car evaluation. Why? Because it gives me a very good street price evaluation of a vehicle. Again, why? Because nearly every person who starts the process of looking for a car will 90% of the time turn to Craigslist to look at cars. Your customer is so much more price educated now than ever before…because they have the internet right in their pocket. My disclaimer is I’m talking about your typical cash car buyer… looking to purchase in the $3-10K range. These are your cash buyers that will invariably look at Craigslist before they go to a retail establishment. These cash buyers are who most new Dealer agents cater to. So if you are catering to a cash buyer, then you have to think like your customer. Put yourself in that customer’s shoes and mindset. If your customer is doing their research on Craigslist, then you have to as well.
You don’t have to have the cheapest price to sell your cars. I’m not saying that. What I’m saying is look at Craigslist before you even buy your vehicle! If you are scrolling thru Manheim or Adesa website looking for a deal to scoop up, don’t buy it until you check Craigslist. I usually keep a tab open at the same time while I’m scrolling thru cars. If I see something that grabs my attention, first thing I do is copy the car’s information (model and year) and paste it into my neighborhood Craigslist search bar to see what other people are listing the car for. If I cannot find the exact car with similar mileage and equipment, I will look around until I do. Look on the “Sale-by-Owner” category and “Sale-by-Dealer” category. Unless your car is very unique, you will find something close enough that you can extrapolate and get a feel for what you can sell the car for. Now you click back over to your the car listing and calculate if you can get that car to your door step and still have a potential profit range of $3K or more built in. You have to make sure of this. This is precisely why I don’t do Auction style buying. I only do Buy Now style of buying, because I want to contact that person and negotiate the price even lower…before I buy it. Furthermore, I am only going to buy it, if I see that my local Craigslist says that the demand is there for a certain price range. Once I determine that, then I have done 80% of the pricing work. I have all the power. I can now finalize the price to sell my car in a couple of days.
Tip: Always price your vehicles ending in 99, because people invariably search by price and you want your ads to have the most views.
$4999
$4299
$4799
