I’m in the market for a new car. If you’re like me (and other Dough Rollers) striving for financial freedom, you want to get the best bang for your buck.
We know that new cars lose up to 25% of their value the first year after coming off the lot. Obviously, that isn’t a good return on investment for your hard-earned dollars.
We also know that, for the most part, new cars are pretty reliable—some models more than others. If you buy a used car, you are taking a risk by not knowing which part is only 25 miles from breaking, leaving you stranded on the side of the road.
This might be a bit of an exaggeration, but the idea rings true: used cars carry some risk. They aren’t new and they might have been driven in ways only Ricky Bobby could accurately handle. Plus, they probably don’t come with a warranty that covers major repairs, as is the case with most new vehicles.
So, there's your first big question: Is it better to buy new or used?
Selling your used car can also be a hassle. It can be hard to find a buyer at a fair price (and in a timely fashion). Dealership trade-ins provide you with an easier selling experience, but you won't typically get as much cash for your car compared with a private sale.
Second question: What's the best way to sell your current car for the most money?
I’ve taken some time over the last few weeks to research the vehicle that is right for my family. In the process, I found some websites that will help shoppers hone in on great deals for a used car, while also identifying which sites are winners when it comes to selling.
Resource: Our Guide to Buying Your First Car
When you’re shopping for a car, used or new, take some time to check out your online resources. The most trusted names are National Automobile Dealers Association (NADA), Kelly Blue Book(KBB), and Edmunds, which are all great places to do some research. You can look up invoice prices, trade-in values, owner reviews, and fair price projections for the model in which you’re interested.
To find the fair value of a used car, you’re going to have to click through a few options.
Lets take a quick look at what each website offers. We'll look at ease of use and helpful tools for decision-making.
Edmunds is geared towards selling new cars with their Price Promise guarantee, designed to eliminate haggling with the car dealer. The principle behind this is to identify the new car you want, get the price promise coupon, and bring it with you to the car dealership. Edmunds claims that customers save, on average, over $3,000 off MSRP when they use Price Promise.
They also offer True Market Values for trade-in, dealer retail, and private party sales. To use this option, you’ll enter your zip code, year, make, model, and trim of your desired car. After you’re done adding the options, colors, condition, and mileage, you’ll get a true market value.
Use this to determine if the price you’re seeing is fair.
NADA offers the ability to research new car prices and used car book values. You can sort by make, miles per gallon, and price ranges (varying from under $15k to above $75K). They also offer location-based best prices, a neat car comparison tool, payment calculators, and a link with Geico that you can use to get an insurance quote.
The Certified Pre-Owned Car Center allows you to look up the CPO pricing for the vehicle you want, lists the warranty options, and provides sale listings for that specific car in your zip code.
My favorite part of the site was the four-car comparison tool. Now, most tools allow you to see a side-by-side breakdown of basics like price and MPG. This tool, however, will also show you images of the interior and exterior of the car, as well as a five-year projection of costs. These include fuel, insurance, taxes & fees, and maintenance.
Kelley Blue Book has long been known (and trusted) for its used car valuations. Originally published in hard copy beginning in the 1960s (they are actually printing their last-ever books as we speak), the company has now turned to its website and mobile app to provide car guides, reviews, and valuations to consumers.
Now a subsidiary of AutoTrader, KBB provides a fair market range and fair market price for new and used automobiles and motorcycles. They’ve started annual best car awards programs and publish Top 10 lists designed to help car shoppers find the best values among the vehicle types that interest them most. Their Best Buy Award chooses a top vehicle in every segment each year, so looking back through their archives can be a great kick start to your used car search by finding past winners.
If you're looking to trade your current vehicle in, the dealership will most likely use the KBB value to either determine or support their offer. It's a well-trusted company, and a great place to do your research.
Best Sites to Sell Your Car (and Buy One, Too)
There are dozens of websites dedicated to buying and selling used cars. Be aware that many of the name brand websites you’ll find below will show mostly, if not all, professional dealer listings up front. They will have little to no private party sellers available in your local area. If they do, they will be lower on the search engine rankings within that website.
Here are a few places to check out when trying to buy or sell your vehicle:
Buying: Craigslist is hands down the best website for buying from a private party seller, which means you’ll get the lowest price over a retail dealer.
You’ll still see some dealers in your search results, although not as many as on other websites. Filter your results based on standard criteria to include title status (clean, salvage, rebuilt, parts only, lien, or missing).
As with any private-party-to-private-party selling activity, there is the potential for fraud, so it’s important to cover your bases. You can contact the seller directly through the Craigslist website and when you do, be sure to review their guide to avoiding scams. Also, there’s more work involved when buying from a private party. And be aware that you won’t normally receive any kind of warranty.
Selling: If you want to get the best price for your car, sell it private party. Dealers usually offer several thousand less for your trade-in or outright purchase over what your neighbor would pay. There are plenty of resources that offer keys to seller success, like this article on Forbes. Overall, Craigslist is the best local selling website for your vehicle.
Buying: For access to private party seller vehicles nationwide, check out the used car section on Ebay. You’ll be able to search for any make and model, or browse for certified pre-owned cars. You can also search for parts and accessories. Collector cars are a niche market on eBay: “collector car” is a search option you can use to find beautiful cars from as far back as the first Model Ts.
Ebay offers very fine-tuned search criteria: mileage (from less than 1,000 to 200,000), who is selling (dealer or private), disability equipment, and vehicle title (clear, rebuilt, salvage), to name a few.
Selling: If you’re selling your car here, you can choose to offer a Buy it Now option. This is where the buyer pays outright for the item with no auctioning required.
The world-famous Ebay auction process is your other option. The fee to use their site is $60.00 if you sell your car for $2,000 or less, and $125 if the selling price is higher than $2,000. This is a great website for sellers of unique and hard-to-find cars.
Buying: If you remember the old days of the Autotrader magazine (before the internet), you know that Autotrader (AT) was designed to eliminate the hassle of finding and buying a used car. Every convenience store had an Autotrader magazine rack somewhere near the register, and you’d often see a couple 16 year-olds thumbing through the pages to find the right car for the right price.
Well, the AT website has taken all of the best features of their original magazine and expanded even further. The site provides you with all the tools you need to make a decision about the used car you’re going to buy. If the old Autotrader magazines had mostly private party sellers, that’s not the case anymore for their website. This one is mostly professional car dealers offering their wares.
AT offers a Car Research & Review section, which allows you to calculate how much car you can afford. You can also determine monthly payments based on a set price and loan interest rate, and compare certified pre-owned programs.
They’ve partnered with Kelley Blue Book to provide users with these tools. They’ll let you investigate used cars by make or body style, access reviews, technical specifications, and compare invoice prices versus the MSRP.
This website is a great resource for finding the perfect used car. Check out their used car buying guide here. Autotrader also has an app available for iOS and Android.
Selling: Autotrader offers you the chance to sell your own car for the cost of advertisement fees. These range from a $25 basic ad package that lasts for one month to $100 for a Premier Run til it Sells option. They also offer expert help: the VIP Service will sell your car for you by doing all the work and even offering a privacy shield that screens phone calls from solicitors by providing you an anonymous phone number. That way, you don’t have to put your personal information out on the internet.
If you’re looking to trade your car in with a dealer, ATs partnership with KBB lets users receive a cash offer from participating dealers. You can enter your Vehicle Identification Number (VIN) or manually fill in the data points, and you’ll have to register with the KBB/AT system to receive the instant coupon cash offer.
Buying: The research section of CarGurus (CG) is laid out in a clean and easy-to-understand manner. Choose your car outright or browse the columns of recent test drive reviews and previews for yet-to-be released cars. Diving into a specific make and model will get you a detailed review complete with CarGuru insights. You’ll also get a clear idea of common problems customers have had with your desired car.
A search for any make and model will produce numerous results. Each one labeled with Deal Ratings ranging from Great to Bad. To design this rating system, CG created an Instant Market Value algorithm. This allows users to quickly compare the market prices of any car with similar listings. It also produces a chart you can use to compare national and local listings.
The graph shows the fair price projection based on price versus mileage (the year remains constant), then plots your selected listing with the other search results. You can’t click on the listings within the graph, but it’s a helpful visualization tool. If you expand your mileage search to nationwide as opposed to, say, 100 miles from your zip code, you may find a deal that would be worth traveling for.
Selling: I like CarGurus because they don’t charge you a penny to list your car. Based on the description you provide (mileage, options, etc.), you’ll see a Price Analysis with their Instant Market Value and Dealer Trade-In Estimate. You can adjust your selling price and get instant feedback on where the car will place in their search rankings and how much CarGurus thinks it is over- (bad deal) or under- (great deal) priced. You can see the best-priced deal in your area, which will help gauge how quickly your car might sell.
They also boast over 20 million shoppers per month. While you do have to compete with certified car dealers in the search results, CarGurus helps you sell your car with its brand of tools and deal analyzers.
Buying: CarsDirect has a very basic search interface, much like the other websites, and breaks down quick access categories by body style and price. They offer a Helpful Tools and Resources section, with a wide range of topics including CPO Guides and car comparisons. CarsDirect is a one-stop shop to find a used car, get an auto loan, and purchase insurance.
Selling: CarsDirect does not allow for private parties to sell on the CarsDirect website. However, there is an affiliate link to a third-party website on their homepage. They do have archives of articles on best practices and locations for selling your car.
Buying: TrueCars tag line is Ultimate Price Transparency. They offer over 500,000 used cars available from certified dealers across the USA.
TrueCar has partnerships with USAA, American Express, Geico, AAA, Allstate, and other nationwide businesses. They offer Carfax reports on all vehicles, but you’ll have to pay between $39.99 for one report or $54.99 for unlimited reports within 60 days. It would be wise if you’re going to be shopping around online to spend the extra $15 to get the unlimited Carfax reporting. You can then use this to compare VIN-based car histories across multiple websites, as you hunt for the perfect car.
Once you find a car you like, you can request a price quote directly from the dealer. At this point, you’ll receive an affiliate discounts and dealer benefits. TrueCar sends you a Used Vehicle Certificate with their TruePrice, which you’ll need to print off and take to the dealer. You’ll get the name of your sales rep along with any previously undisclosed dealer fees. This certificate can eliminate haggling if you are not comfortable with bargaining.
You can also utilize the TrueCar mobile app once you're on a TrueCar Certified Dealer's lot. With a simple scan of the window tag, you'll see an upfront price from the dealer. You will also get insights into what others paid for that exact same car.
Selling: TrueCar used to have their own Sell Mobile app, and was a good resource for selling a current vehicle. However, they have now partnered up with dealerships across the country and the other businesses mentioned, in order to focus exclusively on connecting buyers with available cars.
Buying: Cars.com is partnered with CARFAX to provide reports for used vehicles sold through their website. Dealers and private sellers have the option of providing a report to the potential buyer (you) and charging them a modest fee.
Sometimes, the seller pays for the report and you can access it for free. In fact, I was able to see a report on the same vehicle I had already found through another website. The other site would’ve charged me almost $40 to view it. (Good thing I saw it, too, as the vehicle has two accidents on record.)
Cars.com doesn’t offer price analysis like many of the other websites, and this is one of the few name-brand websites where I found a private seller offering their vehicle.
Selling: Cars.com had the fastest method for obtaining a price estimate on a used car. I entered the seven basic pieces of info on one page. Then, I received an instant pair of price ranges for dealer retail and private party selling.
When it comes to selling, you’re given three options: dealer appraisals, quick offer, and placing your own ad on Cars.com. Also, Cars.com has a seller’s app for iOS and Android. If you’re not comfortable using a mobile device to sell your car, they have an easy-to-use web interface that mirrors the functionality of the mobile phone app.
You can schedule in-person dealer appraisals at up to three dealers at a time for free. The self-made advertising option will reach about 13 million car shoppers per month, and for $49 you can buy a premium package that includes a CARFAX report. This is an easy way to lure in prospective buyers who haven’t yet bought their own CARFAX research package from another website.
There’s also an option to place an ad in your local paper, provided they participate (my hometown didn’t).
Bonus: Cars.com offers a Service & Repair Center section: use it to get an estimate on repairs, find a service center, view safety, and recall notices, learn DIY maintenance, and get expert advice.
Related: What Can I Buy With Bitcoin?
The Bottom Line
If you’re looking at private party sales, start with Craigslist for local deals and Ebay for a nationwide search. For those that want a dealer retail experience (and accompanying guarantees), look at AutoTrader, Cars.com, CarGurus, CarsDirect, and TrueCar.
There’s more information available on used cars today than ever before. This also means that there is more leverage in the hands of the buyer. If you use websites like the ones above and utilize the tools they offer, you’re sure to find a great deal.
Always know what you want going into the negotiation with the seller, and know what you can afford.