How to Sell Your Car to an Online Retailer
Selling your car to Carvana, CarMax, or CarGurus is as simple as filling out a web form. And, according to a CR survey, you can get more than you would expect.
There are several ways to sell your car: privately to a buyer, trade it in at a dealership, or sell it online to a used-car retailer.
Each method is a different balance of hassle versus how much money you can expect to receive for the sale. Posting your own listing and meeting in-person with private buyers takes time, but usually earns the most money. Trade-ins are faster, but likely won’t earn you as much money.
Getting an instant cash offer (ICO) online through a retailer such as Carvana or CarMax, as well as platforms, including Cargurus and Kelley Blue Book is often the easiest overall selling experience. It’s also, according to a recent survey of more than 14,000 Consumer Reports members who have sold their car within the last two years, likely to get you the best price for your car.
CR members reported the highest level of satisfaction with ICOs compared with trading in their car to a dealership or selling to a stranger through an online classified ad platform such as Craigslist or Facebook Marketplace.
How to Prepare the Car
Selling through an ICO is a bit different from posting an ad online or parking the car on the side of the road with a “for sale” sign taped inside the windshield. The car should be in good condition, but you don’t have to worry too much about getting it into show-quality presentation.
“There’s no need to get the car detailed if you’re going to sell it to Carvana or another online retailer, or even a dealer,” says John Ibbotson, chief mechanic at CR’s Auto Test Center. “A quick wash and vacuum will do. At this level, professional buyers are looking for damage, not a sparkling paint job.”
CarMax and Carvana, for example, have staff technicians that clean the cars and fix anything that’s broken before putting them up for sale. Kelley Blue Book and Carwiser connect you with dealers interested in buying your car, and any dealer you sell to will likely have its own cleaning and refurbishment procedure.
How to Get an Online Offer
It’s astoundingly simple to get an offer from one of these companies with a minimum amount of effort. Each retailer we tested asked for the car’s vehicle identification number (VIN) or license plate number, along with its color and options, both factory and dealer-installed. We also told the system whether the car had been smoked in, if it was involved in a crash, or if it had sustained other damage, such as from flooding. The forms also asked whether there were two keys. Only one—CarMax—asked for photos of the interior and exterior. And if you don’t have the capability to submit photos using your phone, you can bring the car to one of their 250 retail locations for an in-person inspection that, as we verified with one of our vehicles, typically takes less than an hour.
After you’ve submitted your information, you’ll get an offer. We got a number within minutes from all except for CarMax, which still replied the same day. We were then given several days to mull it over, and either accept or decline the offer. If you accept, you’ll have to show proof of ownership and some form of identification. Keep in mind that the laws dictating which paperwork needs to be filled out when you sell (title, bill of sale, etc.) varies from state to state.
In Connecticut, where CR’s Auto Test Center is located, we were asked to provide photos of the car’s current odometer reading, both sides of the title, and the driver’s license from each person listed on the title as an owner.
Paperwork & Money
How the money end of things is handled depends on who you end up selling to. CarMax and Carvana will pay you for your car, and they also offer financing, either on another car or on the loan you’re already paying off. Kelley Blue Book and Carwiser leave those things to whichever dealer you end up connecting with through their platforms. It’s worth remembering that a trade-in includes a tax incentive in many states, in which you only pay sales tax on the difference between the sale price of your old car, and the new one you’re buying.
Whichever method you choose, have your documentation in order. In general, if you want to sell your car, you’ll need the title. If you’re still making payments on the car, the lender has the title, and you have to pay off the loan to get possession of it. However, Carvana, CarMax, and most dealers will handle this portion of the sale, too.
Anytime you decide to finance through a retailer, CR recommends first getting a loan preapproved by your bank or credit union, and using those terms as a starting point for negotiations over vehicle price and financing. Your financial institution may offer the best deal, but the dealers’ rates may be competitive. In any case, it’s worth looking into.
