Selling your personal belongings on the second-hand market is rarely an exercise anyone looks forward to, particularly when it’s of financial and emotional significance, such as selling your used car.
As the 10th buyer tries to haggle another Dh1,000 off because of a scratch, happy memories of road trips into the desert in your beloved motor will invariably surface.
However, for those planning to sell their car on the secondhand market, one of the most commonly asked questions is: how do I price my used car? Here are five principles to follow to ensure you secure the best deal:
1. Set your price expectation
Cars depreciate and in the UAE the depreciation curve is particularly steep. Our research suggests used cars depreciate 20 to 30 per cent in the first year, 15 to 20 per cent per year for the following three to four years, and 10 to 15 per cent for every follow-on year. Make, model, mileage and condition certainly play an important role, but there are free online used-car valuators that can help you determine the current market value of your used car.
2. Determine your negotiating stance
Sellers typically expect buyers to negotiate and buyers know that. However, leaving an excessive negotiation margin will likely place your starting price considerably above the market value, hence decreasing the interest your used car will draw and prolonging the selling process. If you’re not wired to haggle over the last dirham, consider pricing your car at the level you are actually willing to sell it and communicating upfront that it is non-negotiable. After all, it is far more convenient to filter out buyers over the phone rather than tying yourself at home with test drives for buyers that end up low balling your used car and walking away.
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3. Find out what’s available in the market
Serious buyers looking for a secondhand car will have done considerable research around their options. So as a seller, you should also do the research and avoid getting stumped when buyers tell you there’s another comparable vehicle for a lower price. A simple online search of classified websites will give you a good sense of what’s available. If you do spot a less expensive but comparable car, look at the specifics of the car and be prepared to answer why yours is being sold for a premium. It could be lower mileage, more features, or that you still have a valid manufacturer warranty. In fact, it will help to proactively explain those advantages in your car ad upfront
4. Know the current new price of your motor
The authorised dealers in Dubai often run promotions, so do not rely on the price you bought your car for as it has very likely changed since then. Also be mindful that the current dealer promotions are often only on the entry level version of your car model. So if you had opted for the higher end version, the ongoing dealer promotion is unlikely to apply. If a buyer brings up the promotion to negotiate the price, inform them of the specifics of your model and its true price when it was new.
5. Condition, service history and warranty pay off
Buyers often place more value on the condition of a car as well as its service history and a valid manufacturer warranty over any bells and whistles. So, if you have opted for fancy body wraps, exhaust kits or other enhancements that may have meant a lot to you, do not expect buyers to value them in the same way.
Finally, before you let a potential buyer view your car, make sure you take care of any minor maintenance needs and give it a deep clean or polish. For deeper fixes, such as new tyres or brake pads, offer a small discount rather than replace, as your buyer may prefer to get their favourite brand or trusted garage to make the change themselves.
Raaed Sheibani is a growth hacker at CarSwitch.com