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Trading in your car at the dealer is guaranteed to lose you money. Yet many opt for this route because it’s easy. The better approach, however, is to sell your car yourself. You’ll get more money, and it’s easier than many think. Here’s how to sell your car fast and for top dollar.

Sell Your Car

In this guide, we’ll walk through the benefits of selling your car on your own. Then we’ll give you some practical tips on how to do it.

Why You Should Always Try to Sell Your Car Yourself First

Trading your car into a dealer when you purchase a new vehicle is quick and easy. That’s why so many people opt for this approaching to disposing of their car. Unfortunately, the dealer won’t give you the best price.

It also complicates the negotiations. With a trade-in, your must negotiate both the price of your new car and the value of your old car. Car dealers are experts at this process. You and I are not. By removing the trade-in negotiations, you greatly simplify the process.

By selling your car yourself, you can maximize the cash that you will receive. As an example, we valued a 2016 Volvo XC90. Using Kelley Blue Book, we compared the money we’d receive from a private party sale versus a deal trade in. The difference was almost $3,000.

Get the Estimated Value of Your Car

Since most of us aren’t car experts, you should get this information from a trusted third-party source. You can get an estimate from a dealer, but they may give you a lowball number under the assumption that you be trading the car in. What you actually want is what you can likely sell your car for.

Fortunately, there are online sources where you can get this information. Two of the best sources are Kelly Blue Book (which we used above) and Edmunds.com. You should also check used car buying sites such as AutoTrader and Craigslist.

In order to get the most accurate value of your vehicle on those sites, you need to be accurate in describing the details of the car. This will be particularly important in regard to the car’s overall condition since it can result in wide variations in value.

They will typically give you three values:

  • Trade-in
  • Dealer retail
  • Private party

Dealer retail will be the highest. It is unlikely, however, you will be able to get that price. You aren’t a dealer and don’t have a dealer’s marketing power. Trade-in will be the lowest, but it’s not what you’re going for. A private party sale will be the most relevant number, as it is the price that you will most likely get for your car on direct sale.

Once you have this number, you should price your vehicle accordingly. Too high and you may not even get anyone to look at the car. But price it too low, and you’ll be losing money.

Get the Loan Information if You Still Owe Money on Your Car

There are two important pieces of information that you will need if you have a loan on your car:

  1. The payoff balance on your loan, and
  2. How to get the title to your car in the shortest timeframe possible.

The payoff balance will let you know how much cash you can expect to clear on the sale. Alternatively, it may show that you are under water and might have to write a check in order to close out the loan after the sale. You need to know this information to decide if selling your car is even the right option.

The title information is just as important. If you have a loan on your car, then the title to the vehicle is in the possession of the lender. The sale of the vehicle has to happen first so that you will have the cash to pay off the loan. But in order to complete the sale of the car, you’ll have to be able to deliver the title to the new owner.There will be a delay in this

There will be a delay in this process after the sale is completed. But you want to get information from the lender so as to keep that timeframe as short as possible.

Find out what the payoff process is, and what the best way to retrieve the title will be. That will likely require getting specific names and addresses, to make sure that all correspondence goes to the right party. You’ll also have to check and see what type documentation the lender will require for the payoff, in addition to the payment itself.

Where to Advertise Your Vehicle for Sale

There are plenty of ways to sell your car online. This can include Craigslist and AutoTrader.com, but you could also try eBay and even Facebook. Also, do email blasts to everyone on your email list who lives in your local area. Even if a direct recipient has no interest, they may forward the email on to someone they know whose looking for a car.

But you don’t have to rely just on online sources. Some of the more traditional advertising methods can work as well. Create a flyer that includes important information about the car, as well as two or three color photos of the vehicle. Post them on the bulletin board at work, at your house of worship, and in any public places that will allow it.

Accepting Payment Proceeds from the Buyer of Your Car

Payment is a specific issue when selling your car yourself, so you will have to take several precautions.

Never accept a personal check. In a worst-case scenario, the buyer can make off with your car, and you’re stuck with a bad check – and the bank fees that you will be charged for it. In that situation, legal action will be your only resort. And that may not work if the personal check you accepted turns out to be fraudulent. It happens in the real world, and not infrequently.

At a minimum, insist that the buyer pay by either certified check or a bank check. Keep in mind that cashier’s checks can be forged. As Teresa Dixon from the Cleveland Plain Dealer recently noted,

It used to be that getting a cashier’s check was a sure-fire way to avoid fraud. Not anymore. The fraudulent cashier’s checks out there fool the banks sometimes. I’ve dealt with cases in the last few years where even PNC and Huntington tellers accepted cashier’s checks that later ended up no good. Sometimes even the police can’t tell.

Better yet, hold the closing of the sale at the buyer’s bank – the same one that the check is drawn on. That should enable you to verify that the funds are available in the buyer’s account.

If the buyer is using a loan to purchase your vehicle, hold the closing at the lending bank. That will enable you to get a bank employee involved in the process. If the new lender is not a local bank, hold the closing at your bank, and ask your bank to verify the authenticity of the check from the buyer’s lender.

None of this guarantees that you won’t get stiffed on the payment, but it does lower the chances considerably.

Selling Your Car Yourself – Keeping it Legal

There will be several steps on the legal side of the sale.

Bill of sale.You will need to prepare a bill of sale in order to complete the sales transaction. Google “automotive bill of sale” for your state in order to get an acceptable form, then complete it with all of the relevant information. The bill of sale will be important if there is an existing loan on your car, and you will not be able to produce the car title immediately.

Temporary operating permit. The buyer can use the bill of sale to obtain this permit from the state department of motor vehicles (DMV). This will allow the buyer to operate the vehicle until the title can be delivered. Receipt of the title can take anywhere from a few days to two or three weeks, so this is an important step for the buyer.

Release of liability. This is a document that is available on your state DMV website. It will confirm the sale of the vehicle. Don’t skip this step! Completing and filing this form with the DMV will release you of liability on the vehicle. File it immediately after the sale to avoid potential problems. The form will likely require the odometer reading at the time of sale. Contact your state DMV to get specific information about this form.

Pay required transfer fees. You can find out what these are from the DMV. This can include sales tax if your state charges it on auto sales. You will want to pay them immediately after the sale since that is when you will have the cash to do so. But in addition, the payment of fees will represent additional confirmation of the transfer of the vehicle, and therefore the release of your liability.

Don’t forget to remove the license plates! The license plates run with the owner, not with the car itself. As well, you could probably transfer the plates to your next vehicle. The buyer will have to work out the license plate situation immediately after the sale.

Though the process of selling your car yourself seems complicated, remember that it can result in your getting thousands more than what you will get by trading it into the dealer. In the end, it will almost certainly be worth the extra effort on your part.

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Wherever you are on your path towards financial independence, it’s important to think about what would happen to your financial accounts if you were unexpectedly pass away. It seems like a morbid thought, but planning for the well-being of your family is essential.

Even if you don’t yet have a spouse or children, thinking ahead financially is still important. It could smooth the way for any friends or extended family members who will deal with your affairs, should you die.

Obviously, this process involves creating the proper wills and trusts. But one more simple step could help your heirs avoid some problems: designating beneficiaries.

Even if all of your financial assets are properly distributed in your will, your heirs may get tied up in probate dealing with specific financial accounts unless you designate beneficiaries. The good thing is that you can easily add beneficiaries to most accounts, bypassing the harrowing (and potentially expensive!) probate process. The beneficiaries designated on your account will only need some basic paperwork to receive money left in that account following your death.

Related: How Much Life Insurance Should You Have?

Not sure how to add these designees to your accounts, or even which accounts need beneficiaries in the first place? We’re here to help!

Banking Deal: Earn 1.20% APY on an FDIC-insured savings account at Barclays.

Adding Beneficiaries to a Checking or Savings Account

You can add a beneficiary or a payable-on-death (POD) to most savings and checking accounts. Sometimes your bank will ask for this information when you’re opening a new account, but they don’t always. And sometimes you can’t add or change beneficiaries online.

If your bank has a brick-and-mortar branch, you may need to visit the personal banker with the beneficiary or with that person’s information, including address and Social Security number to add them to your account or change beneficiaries.

Dealing with an online-only bank or one that doesn’t have a location in your area? Call the bank directly to ask how you can designate beneficiaries for each of your accounts.

Read More: The Best Online Savings Accounts With High Interest Rates

Unfortunately, some banks (including ING Direct) doesn’t allow accountholders to designate beneficiaries. If this is an issue for you, consider moving your money to another bank that does allow for a payable-on-death designation.

You can also address this bank specifically in your will or trust. Again, even a will or trust may not remove all the headaches associated with accessing a bank account’s balance after your death. But if you like everything else about your bank account, aside from the fact that it doesn’t allow for a payable-on-death beneficiary, you may not want to switch banks. In this case, just ensure that the bank account is covered in your will.

Beneficiaries on Investment Accounts

Brokerages and banks will usually ask for a beneficiary when you open an investment account of any kind. Even if you don’t plan to save massive amounts of money in any given account, be sure you designate a beneficiary right away. You never know how that account balance could grow between now and when you might pass away.

Plus, a small account balance gives you even more incentive to name a beneficiary. In the case of accounts with a relatively small balance, probate fees could eat up the entire account balance if you aren’t careful.

Related: Evaluating an Investment Portfolio

Insurance Policies

Policies like life insurance will obviously ask for a beneficiary right away, since their point is to benefit your heirs should something happen to you. Still, you’ll want to be sure that these policies are kept up-to-date with your recent beneficiaries.

What About Joint Accounts?

You might think about skirting around the need for a beneficiary by naming a joint account owner, instead. In some cases, this can be appropriate. For instance, if you and your spouse combine finances, it’s appropriate to have most of your basic checking and savings accounts in both spouse’s names, even if you actively manage most of the money.

Naming your spouse as a co-owner on your accounts usually makes sense, but naming another person as co-owner may not. For instance, adding an adult child to your account gives that child the power to withdraw from your account at any time, even before your death. Also, the co-owner will inherit your account upon your death, even if you’d prefer to name multiple beneficiaries.

Other issues to consider include credit issues on the part of the account co-owner. If your joint account owner gets into financial difficulty, creditors could come after the balance of your account, even if the co-owner has never contributed to that account.

Read More: Joint Accounts vs Authorized Users — Are They The Same?

Joint accounts could be a viable solution for skirting around probate issues in some cases, but there are plenty of potential dangers to consider, as well.

Compiling Your Financial Information

Of course, you can designate a beneficiary on every one of your fifteen different bank accounts. But that doesn’t do a whole lot of good if your beneficiary doesn’t even know about the accounts after your death. This is why it’s so important to keep a file — whether electronic or physical — of all of your personal financial information.

Learn About Building a Money Binder to Prepare Your Finances for Your Death

Maintaining a money binder is an excellent way to keep all of your financial information together, including account log-in information. Just having a list of where you maintain all of your accounts and who the beneficiaries for those accounts are gives your heirs a place to begin.

Changing the Beneficiaries

One thing to keep in mind is that you’ll need to keep your beneficiaries up to date. Any major life event, such as a marriage or divorce, or the birth or death of a child, means you need to look over your account beneficiaries to make sure they’re still accurate. Also be sure that your account beneficiaries are listed in the appropriate order. This is important if you, for instance, want to account to pass first to your spouse but then to your child if your spouse has also passed away.

When you’re changing the beneficiaries on your accounts, be sure to also change that beneficiaries in your will so that they match. Mismatches between your will and your account beneficiaries can create major hangups for your heirs! Whenever you update one, double check the other to ensure that it’s correct.

More Complicated Situations

As you move towards financial independence, you’ll begin to enter on to more complicated financial situations which might require true estate planning. After all, you don’t want to see all your hard work and careful planning go to waste when your beneficiaries are heavily taxed on what you leave behind!

Related: Save Your Heirs On Taxes By Being Generous Now

Keep this in mind as you progress through your financial goals. If you’re well into the millions of dollars of assets, it’s probably time to do more than just designate beneficiaries and set up a basic will. At this point, you’re likely looking at trusts and other inheritance issues.

Still, though, even if you pull in a professional estate planner, you’ll have to take this step to ensure that all of your accounts are set up with beneficiaries that match your estate plan.

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Unless you’ve been living under a rock, you’ve probably heard whisperings of the Federal Reserve’s rate hike last month. This is only the third time since the Great Recession that the Fed has increased rates… and, well, it’s both a good thing and a bad thing.

A Fed rate increase means that the economy is on the upswing. The Fed will only raise the benchmark rate when the economy no longer needs stimulus. Janet Yellen, chairwoman of the Fed, said that her organization plans to go slowly with such rate increases. So, it’s best to assume that the Federal Reserve is cautiously optimistic about the economy and where we stand today.

The most recent benchmark increase was only a bump from .75 to 1 percent. It doesn’t seem like much, but even a tiny change in the benchmark rate can spell major changes for your personal financial situation. Let’s take a look at what the latest increase may mean for you.

How the Fed changes interest rates

The Federal Reserve doesn’t directly affect interest rates. Instead, its benchmark rate affects the federal funds rate — the rate that banks charge each other. The banks then pass those costs (or savings) on to consumers by changing the rates of short-term loans. Then, when short-term rates increase, long-term rates increase, as well.

In short, when the Fed increases its benchmark rate, you’ll first feel the pinch with your credit cards and other adjustable-rate or new shorter-term loans. But you’ll eventually feel the pinch if also you try to take out a longer-term loan, like a mortgage.

Here’s how the current rate increase is most likely going to impact your wallet:

If you have adjustable-rate debt

Variable- or adjustable-rate debts — like credit cards, HELOCs, and variable-rate mortgages — will likely be the first place to feel the difference, post-rate hike. A quarter-percentage interest hike doesn’t seem like much, but it can really add up over time. This is especially true if you’re carrying around a lot of credit card debt.

Let’s assume that you’re holding the average American family’s $16,000 worth of credit card debt. Depending on your terms, the rate increase could potentially cost you several hundred dollars per year.

Learn More: How Is the Nation REALLY Doing With Credit Card Debt?

Just how much more can you expect to pay on your variable rate loan? Dig into your statements to ensure you always know your rates, even as they change. Then, use an online calculator to see how much you’re going to pay in interest when your rate increases.

The best way to deal with this particular issue? Just pay off that debt as soon as you can. Right now, you may only be looking at a difference of $100 a year or less. But if the Fed continues to increase their benchmark rates, the interest rates on your already higher-interest debts are only going to increase.

Need a boost to get you started? Consider transferring some of your debt to a card with a 0% APR introductory period. Paying no interest for even 12 or 15 months can make it much easier to get that principal paid down before you end up paying through the nose because of rate increases.

If you have, or are in the market for, a mortgage

Fixed-rate mortgages, which remain the most popular option, may not skyrocket immediately. But the pinch will come.

According to Freddie Mac, the average 30-year, fixed-rate mortgage in January charged 4.15% interest. In March, that increased to 4.2%. That’s a fairly large increase from this time last year, when rates were more like 3.69%. But from February to March, that much of an increase would probably only make a few dollars’ worth of difference in your monthly payments.

With that said, even a point’s difference on a 30-year mortgage can have a big impact on your finances over time. That’s because you’re paying interest on this loan for so long. Even a few bucks a month will add up over the course of 30 years!

Read More: Can This Simple App Get You Out of Debt?

So, what should you do with all of this in mind? Well, if you’re in the market for a mortgage, you might try to buy sooner rather than later. But only if you have a sufficient down payment and good credit. It doesn’t make sense to pay more for a mortgage, simply because you’ve rushed in before you’re financially ready.

With the Fed’s cautious outlook, it doesn’t seem that interest rates are going to skyrocket any time soon. So, it doesn’t make sense to lock in a lower rate if you’re not financially prepared to buy yet.

What about those who already own a home? If you’re still paying pre-Great Recession interest rates of 5% or more, you might want to consider refinancing while the rates are still low. This is especially true if you’re also in a better credit and all-around financial situation now than you were last time you bought or refinanced your mortgage. If nothing else, it’s worth looking into your refinance options now, before rates increase any more.

In the Know: Can You Refinance Your Mortgage With Bad Credit?

If you have savings and investments

Just as interest rates on consumer debt are rising slowly, so will rates on savings products. Chances are you’ll see a slight increase on the rate on your interest-bearing accounts, including savings accounts. Other interest rates — like those on CDs — will also rise, albeit slowly.

Bottom line: now could be a good time to shop around, Make sure that you’re getting the best interest rate on your high-yield savings accounts and, if you’re not, think about switching.

What about your longer-term investments, including those in your retirement account? It’s much harder to predict a rate hike’s impact on savings vehicles like these. When it comes to long-term investing, just stay the course and keep paying attention to the basics, like asset allocation.

Related: The Perfect Asset Allocation Plan

So, what exact impact will the Fed’s rate increase have on you? It really depends on your current financial situation, especially your debt and savings account mix. Just be sure to pay attention to interest rates on both debt products and savings products, so you can take advantage of the best deals around.

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National averages for credit card and other consumer debt can be a good barometer of consumers’ financial capacity and goals. For instance, when debt decreases, Americans, as a whole, may be spending less and saving more. Of course, that’s a good thing.

So, when SmartAsset released its average credit card debt study recently, we took notice. The survey looked at median individual income and credit card data from 2006 to 2016. It even broke down the data by state!

trend

What did the survey find? Here are some of the topline results and what they might mean for consumers like you:

Americans were dropping credit card debt… but now they’re reversing that trend.

The data show that from 2006 to 2015, the average total credit card debt went from about $3,175 per person to $2,800 per person. Total credit card debt dropped — in every region except Virginia, Maryland, and Washington, D.C. — during this time period.

What does that 11.6% decrease mean? It’s hard to say exactly. But it could have been a result of the financial crisis, and people understanding how dangerous credit card debt can be during a time of personal financial upheaval.

During this time, though, there was a peak in the average credit card debt. In 2008, the average debt was $3,670, and the average American had debt equal to about 14% of their annual income! From that high point, we started cutting back on credit card debt quickly and efficiently. This is definitely a good thing.

So for several years, Americans were dropping debt at a significant rate. But then, a new trend happened.

The average credit card debt bottomed out at $2,730 in 2014, bouncing back up to $2,800 in 2015. Over this same time period, the total national credit card debt rose from $733 billion to $799 billion. So, is this the new normal?

It’s hard to say. But the report speculates that the Great Recession incentivized Americans to lower their credit card debt. But once the recession turned around, Americans seem to have forgotten the struggle and gone back to their old ways… taking on significant amounts of credit card debt.

What does it mean for consumers?

Boiling complex statistics, in a survey like this one, down to a few talking points is risky. The challenge is to avoid reading too much into the results. With that said, I think there are a few lessons that financially savvy consumers could take away from this study.

 

It’s all too easy to go back to bad habits.

What we see here in these trends is that, when given a big enough push, Americans are capable of buckling down and paying off debt. In some states, credit card debt levels shrunk by 30% or more, during and right after the Great Recession!

Necessity tends to breed discipline, in finances as in everything else. But when that necessity is no longer spurring you on, what happens? It’s way too easy to go back to former bad habits.

Time will tell whether the recent uptick in debt levels is a trend that will continue. But it does show that once the worst of the crisis is over, people may be willing to slide back to where they were before.

If you really want to change your habits, whether in the realm of personal finance, your health, or elsewhere, you have to keep going. And that means even after the crisis that spurred your change has passed!

 

We should all be prepared for the worst, at any time.

If consumers had known beforehand that the Great Recession was coming, do you think they would have had thousands of dollars in credit card debt lying around? For many, probably not!

It’s easy to live large when things are good, and not to worry too much about things like credit card debt. After all, you can afford the payments, so what’s the big deal? The problem is that you never know what’s just around the bend.

Illness, stock market crashes, job loss, and other disasters can strike at any time. While you don’t want to live in a doom-and-gloom mindset, it’s best to be prepared. And, financially, this means being as debt-free as possible and having emergency savings available.

 

Focusing on staying out of credit card debt is still important.

Personal finance blogs like this one have been around for decades now, but many people still need to go back to the basics. One of those basics is the importance of paying off credit card debt.

Sure, sometimes taking on credit card debt can be justified. But it’s important to pay it off as quickly and efficiently as possible. Otherwise, you run the risk of trying to pay down such debt while you’re already in the middle of a crisis.

So, what’s your story from the Great Recession? Did your credit card debt go down? Are you letting it slide back up again? Tell us in the comments.

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Is Quicken Right for You? Here’s Our Ultimate Review

by Abby Hayes

We’ve always been fans of Quicken here at Consumerism Commentary, and we’ve got a lot of reviews floating around to prove it. But you don’t really need reviews of Quicken from five years ago. You just need to know what to expect from the latest version: Quicken 2017. Here, we’ll give you the highlights, and […]

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Should High Schools Require Money Management Classes?

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A Free Online Checking Account Earning High Interest: The FNBO Direct Checking With BillPay

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How to Pay a Tax Bill You Can’t Afford

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It’s a good thing I’ve been saving a good portion of my income for the past year. Even with making estimated tax payments — the last of which was due on January 16 — I still have a significant tax bill this year, thanks to increased income. Many taxpayers dread filing their taxes, even if […]

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How to Best Handle Old Credit Card Accounts

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One of the best things you can do to build awareness of your financial condition is to view your credit report. Your financial condition — as perceived by potential lenders — can cost or save you thousands of extra dollars throughout your credit repayments, such as the life of a mortgage, for instance. You can […]

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Here Are 4 of the Biggest Risks When You Invest

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No investment is without risk. You may feel safe when you do what financial advisers consider the “right thing” — invest in a broad stock market index fund with a long-term view — but there is risk there as well. Unfortunately, to build wealth over time, investors need to accept a significant amount of risk. […]

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