Car Buying & Selling Guide
- Preparing your sale
- Make your car stand out
- Found a buyer?
- Motor Vehicle Traders
- Deciding on the right car
- Pre-Test checks
- Completing the sale
Preparing your sale - Make your car look its best
Whether you want to do it yourself, or pay a professional (normally around $150), preparing your car for sale will not only improve the potential purchase price, but also eliminate many of the post sale hassles for the new buyer. Things to think about include:
After a good hose down, scrub all surfaces with a soapy cloth. Then hose off the suds and towel down the car. Clean windows inside and out, and polish trims, especially chrome, before blacking out the tires. Lastly, give it a polish with car wax. It's important to do this out of direct sunlight. If you car has a couple of scratches or dings, consider getting a panel beater to give it a touch up and cut service. These can cost $200-$300 and make a big difference to the overall appearance of your vehicle.
Do the bits you don't normally do. Remember to remove your belongings, and clean out the glove box and the ashtrays. Vacuum the carpets, and polish the hard surfaces with something like silicon or Armor-All. If needed stick a deodoriser in a couple of weeks in advance of the sale.
Time to open the bonnet and clean in those places you don't normally - including the bonnet openings and engine bay. Top up all the fluids, including power steering, automatic transmission, window washers, and radiators.
Avoid bright overhead sunlight and take plenty of shots to give you some options. Take at least two profile shots - typically from the right front of the car and the rear left. Interior shots of the driver's seat and dashboard are also important.
Get your paperwork straight
Make sure all receipts and associated materials are on hand, like service records, so you can show the buyer if they ask. You should also consider getting a Vehicle Information Report (VIR). This enables buyers to quickly check the history of the vehicle and verify you have clear title. Once you are ready head down to the Post Office and collect forms MR13A (for the buyer) and MR13B (for the seller). Ensure you've paid all outstanding registration fees. You're still liable for them if your vehicle is unregistered when you sell it.
Make your car stand out - better listing get better prices
Check out what similar cars are going for, and see how your model compares. Typically dealer prices are at a 15-25% premium over private prices because they have to cover their business costs. Remember that most sellers over-estimate their own car's value. So you may wish to check Red Book's market value guide to make sure you are charging a fair price.
Each sella listing has mandatory and optional information. Optional information is very important as it allows you to provide detail about your vehicle. Use this area to explain your car's special features or the special care you've taken of it. It is also a good thing to attempt to relate benefits to these special features if you can. If mileage is high, you may want to focus on other features, but don't forget that honesty is the best policy if anyone asks.
Auction or Classified?
Classifieds feature a fixed price and potential buyers will have to meet or communicate with sellers directly to negotiate a sale. Auctions make buyers compete with each other, with the car selling for the highest bid over the reserve. In both cases potential buyers can contact you directly to ask you questions or to view the vehicle.
When you run an auction there are two prices to set - a starting price and a reserve price. The lower the starting price the more interest your auction will get, however you will still need to set a reserve for the minimum price you will accept. Generally a good starting price is around 20% lower than your reserve.
Auctions draw the most interest around closing time, so make sure that your closing time is during a period of high traffic online. For instance during the evening will be better than early on Sunday morning.
Found a Buyer?
Apply some common sense to ensure everything goes smoothly and you don't get ripped off.
Communicate with potential buyers
Once your listing is online you may get asked questions from potential buyers so be honest in your answers, and answer all enquiries as promptly as you can. You should encourage buyers to come view your car or suggest that they use a vehicle inspection service if required.
The Test Drive
Before you agree to a test drive there are a few things to remember. Make sure the potential buyer has a valid driver's license. If they are not covered by your insurance policy make sure they sign a personal liability agreement. Think of a route that will provide plenty of variety, and make sure you go along as a passenger.
You will need to confirm both your details & the buyers on MR13A form and send to the LTSA within 7 days of the sale. Make sure you do this before you hand over the keys. Wait for the buyer to lodge the MR13B (Change of Ownership form) and bring a Change of Ownership card to you. This shows the LTSA has received all the paperwork and no future fines will be against your name.
For more information on changing vehicle ownership visit the LTSA.
Be prepared to accept a deposit to hold the car while the full amount is sorted out. If you do, write a receipt that includes all major details of the car and transaction. The most secure form of payment is a bank cheque. Phone your bank to fully confirm cheque clearance. Some banks add a newly presented cheque balance to your account bottom-line, but the amount won't be cleared and won't be available.
If you have sold your car via an auction don't forget to leave feedback with your buyer online.
Motor Vehicle Traders
A person is treated as a motor vehicle trader if;
- The person sells more than 6 motor vehicles within a 12 month period; or
- The person imports more than 3 motor vehicles within a 12 month period
A person selling his or her own car to another consumer is not deemed to be a "motor vehicle trader".
If you sell more that 6 vehicles over a 12 month period for financial gain you will need to register as a trader. Traders can register online at www.motortraders.med.govt.nz, or on paper (forms are available from the website or on request by calling freephone 0508 MOTORTRADERS (0508 668 678)).
Failure to register is a breach of the Act and could result in prosecution.
The Motor Vehicle Sales Act 2003 (MVSA) replaced the Motor Vehicle Dealers Act 1975 on 15 December 2003.
For more details on offences, see sections 95-110 of the MVSA at www.legislation.govt.nz.
Deciding on the right car
Before you buy your dream car you need to consider a number of factors including the age and price of the car, the car and engine size and also its general condition Insurance costs can vary hugely between cars, so getting a quote might help you reach your decision. A few resources to help you find the car that suits your needs are:
- Automobile Association (AA) - Safety Reviews
- Automobile Association (AA) - Car Reviews
- Car & SUV - Motoring reviews and news
The right price
For the best possible estimate of a cars value why not try the Red Book's market value guide. Remember when searching online that classified listings rarely sell for the asking price, so the real market price may be 5-10% less. Don't be afraid to negotiate on price.
You've decided to buy a vehicle, you've decided on the make and model, and you've got an idea of how much you can afford. Make sure you follow these steps to ensure you buy a quality vehicle.
Inspection & Test Drive
You can learn a lot about a car you're considering buying by taking it on a test drive. It's normal for the owner to want to accompany you on your test drive and you may be required to sign a liability agreement where you take responsibility for any damage or infringement while you are driving. To offset this risk you may want to talk to your own insurance company. Things to look for on your test drive include:
- Condition and performance of the engine, including excessive smoke on start up.
- When changing gears, the clutch should engage cleanly on manual cars. The gear lever should shift smoothly between gears and the gears should engage crisply without any graunching or grinding sounds. Automatics should change smoothly and without jerking or thumping.
- Drive up a steep hill and look in the mirror for signs of smoke; worn engines will develop excessive smoke when they come under high load.
- Stop the car on the hill and apply the handbrake. The car should hold firm. On manuals, the hill start will also be a good check of the clutch's operation. Try to do some open road or motorway driving, too. You can gauge the acceleration and check for excessive exhaust smoke as the car accelerates.
- In an empty open space or car park, take your hands off the wheel and check whether the car pulls to either side: it should track straight ahead. Cars that don't may have steering or wheel alignment problems.
- Check the brakes' efficiency by braking hard to a full stop. The car should stop in a straight line without pulling to one side or juddering.
In addition to a full test drive your will also need to check the exterior of the vehicle for dents or scratches, plus the condition of the paintwork and any potential rust. Windscreens are also a potential source of problems if cracks or starring are visible.
Under the bonnet you will need to check the condition of the oil, and any strange fumes or excessive smoke. Inside the car have a look at the condition of the upholstery and check for any damp areas. Try operating all controls including the sound system, air conditioning, power mirrors and windows, to ensure all work correctly.
A Professional Check
If you think the car looks good and drives well, we recommend getting a professional check carried out. This could be through your local mechanic, or alternatively you can approach a dealership that handles the particular car you are looking at.
Completing the sale
The safest and easiest way to pay for a vehicle is by bank cheque. Take this when you go to pick up the car, along with an LTSA MR13 form (available from any post shop) if the seller has not already provided this. If you're buying privately, it pays to check that the vehicle hasn't been stolen, doesn't have any outstanding debts attached and who is the registered owner. You don't want your new car repossessed or find yourself liable for unpaid bills, or fines. If the vehicle is diesel powered, check that there are no Road User Charges owing (telephone the RUC Helpdesk, 0800 655 644).
You should arrange to have the vehicle insured from the moment you pay for it.
Change Of Ownership
When you receive your car you should watch the seller fill in the bottom portion of their certificate of registration with your details. They then post it to the Transport Registry Centre. You must fill out an LTSA MR13 form and pay the $9.20 change of ownership fee. You should receive your new registration certificate in the mail within a week.
Get a warranty
Even if you're not buying from a dealer you can buy a mechanical warranty and reduce the risk of expensive breakdowns.
To protect both yourself and the seller you should make two signed copies of a receipt that identifies contact details for both parties, the main details of the vehicle, the amount paid and the exact time.
If you've bought the car via auction you should place feedback on the seller.
Need support? - Call us on 0900 SELLA (0900 73552)
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