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Selling a Car After Cash For Clunkers - Live Like a Mensch
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Live Like a Mensch

Selling a Car After Cash For Clunkers

 

I bought my 1998 Mazda 626 in the spring of 2006 for $3,300. It's been an insanely reliable car, and J has posited that it's like a zombie that just keeps coming despite age and (routine) deterioration.

The last time J and I were in the used car market, $3,300 was a pretty darn low price for a reliable car, although it wasn't that difficult to find other relatively reliable used cars (sold by owner) in a similar price range.

In between then and now, we had the Cash for Clunkers program in 2009, which removed 690,000 used cars from the road. Between that and the fact that the economic downturn meant that more people were holding onto older cars, and it's no wonder that the American fleet of cars is getting older. 10.8 years old on average, to be exact.

The problem with these trends is that it's much much harder to buy a reliable used car these days.

For example, the Mazda is currenly 15 years old. It has 185,000 miles on it. It sports a bumper sticker which reads "Reading is Sexy." The dashboard light is out. The door gaskets are coming loose on three of the four doors. In short, it's not exactly a prize on paper.

J, with his extensive experience selling used cars (and trust me, he knows what he's doing with this. He sells used cars more often than some people change their underwear. Gross, hygiene deficient people, but still.) Okay, I got lost. Let me start that sentence over again. J, with his extensive experience selling used cars, was sure that we wouldn't be able to get more than $1200 for the Mazda, and he thought that might be a tad optomistic. This was even acknowledging the fact that the car is insanely reliable.

Then, after spending some time on Kelley Blue Book and other car sites, he revised his opinion. We might be able to get as much as $1500 for it, without breaking a sweat.

We decided to list the car on Craig's List for $1650 and hoped we'd get an offer close to that.

Within 20 minutes of putting up our ad, we had gotten five emails, four of which were from people willing to pay exactly $1650, in cash, that very day.

J immediately started wondering if he'd underpriced the Mazda. He spent a few minutes on some dealer websites and found that Mazdas like mine were going for $2500. Granted, that was including a dealer markup, but it was abundantly clear that we were underselling our 15-year-old clunker.

J contacted each one of the (serious) offers and explained that he'd goofed, but that the car was still available. Would they be willing to negotiate from $2000? Everyone was quite polite about it, which surprised me a little, and we ended up selling the car for $1850 to one of our original contacters.

Our buyer had recently been transferred to an office in Tipton, 60 miles away, and he was feeding his truck a ridiculous amount of gas. My gas-sipping Mazda was a perfect fit for him. He even liked the Reading is Sexy sticker. ("I just read a book!" he exclaimed when he saw it.) He even noticed that we had neglected to remove my graduation tassels from the rearview when cleaning out the car, and drove back to give them to us since he was sure I'd miss them.

Time between posting the car on Craig's List and waving goodbye to it? Less than five hours.

That was too easy.

In point of fact, I'm pleased at how much we got for the car and how quickly we were able to sell it. But I really do worry about the fact that the used car market is so dried up these days that I could get such a princely sum for a 15-year-old car. What are the people who are just trying to get by doing for cheap transportation now? How long will it take for the used car market to recover?

This experience makes me very grateful for my new Honda from my parents, and for our car replacement savings account. I know that if something were to happen to one of our cars, we would be able to afford a decent vehicle in a hurry. I worry about the people who are in a more precarious state.

Published Mar 05 2013, 03:13 PM by Emily Guy Birken
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Comments

 

frugal_fun said:

Pre-Cash for Clunkers we bought a 4 year old domestic mini-van for about $4K with 65,000 miles or so. I'll grant you the price was artificially low because there was a streak of high gas prices, it was at a public auction, and it had a minor dent created by the dealer trying to get rid of it.  So maybe raise it up to $6K to $8K or so for the "real" cost in more normal circumstances.

That van is now officially worn out. I know it's got important car parts with slow leaks. (like oh, the transmission). Looking for something in a similar age range/model we're looking at $10-$13K to replace what we bought a few years ago. In order to get a price that low on the Honda Odysseys we have to take on a mileage over 100K. I've seen wrecked Odysseys with a sticker price of $12K. (Really!) A new Caravan base model costs $20K.

The reality is that between cheaper financing for new models and the small gap between used and new domestic mini-vans, we're seriously thinking about buying new. I suppose that was the point of Cash for Clunkers but not everyone is in our same position to reasonably/responsibly consider a new purchase. (And more to the point we may or may not sell the car in 5 years time when it's paid off. We may also run this one into the ground depending on the circumstances.)

I'm not sure what happens either, other than older cars keep getting older and some people lose access to personal transportation. The whole "Cash for Clunkers" thing was such a flippin nightmare except for the auto industry and those about ready to buy again anyway.  I couldn't have imagined a program better designed to hit the working poor where they live then "Cash for Clunkers". :(  

At any rate, auto production is still down (I believe).  My guess, coming from the place where I make up numbers, ;)  is that we've got another 5-10 years or so before the car market normalizes. People like us will be forced to buy and eventually most of those cars should end up in the used car market.

March 7, 2013 12:56 PM

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