What would be a "family discount" when selling a used car?
July 29, 2022 12:41 PM   Subscribe

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I have a car I am going to sell, the "private sale" estimate of its value is $19,140-$20,845.

A family member person is interested in purchasing it and wants to know what I want. This person is financially comfortable. They are not an immediate relative to me--a more of a close in-law situation. Does either of that matter? Is a family discount a thing in situations like this? This family does gift each other big ticket gifts, so my sense is there should be some reduction of the price. I find it all very awkward.

Does anyone have any perspective or practice regarding this? I could "afford" to take less, but what would that be? A certain percentage? If the estimates are accurate (I would search some more just to confirm), would knocking off a thousand sound good? Or is it fine to just ask the market estimate?

posted by rhonzo to Grab Bag (18 answers total)
Some options:

1. Tell the relative that the estimated private sale value is $$$$$, but you want to give them a family member discount, how much do they think is fair?

2. If there's more guess culture going on, ask another family member what to do, maybe a couple of people. Someone in a matriarch/patriarch role is good.

3. Never sell a family member a used car in case something goes wrong and they blame you forever / want backsies / etc.
posted by momus_window at 12:46 PM on July 29, 2022 [12 favorites]

Depends on this person's personality. I would hesitate to sell a used car to someone I know. However if I did I would discount a couple of grand.
posted by creiszhanson at 12:46 PM on July 29, 2022

I think there is some value in not having to deal with the process of actually listing it and selling it. It looks like the average price is $20k. A 10% discount would be $18k. If you like the person maybe 15% down to $17k.

But, upon preview, #3 by momus_window should be an overriding thought.
posted by JohnnyGunn at 12:50 PM on July 29, 2022 [8 favorites]

Option3 as momus_window outlined.
posted by tipsyBumblebee at 12:51 PM on July 29, 2022

Sell the car to someone else, gift them a big ticket gift if you like them enough to do so. Mixing business and family often goes awry.

But if you do want to sell it to them, I'd only consider a small reduction at the moment (estimated number of hours you think it will take to sell the car to a stranger * what your time is worth to you). Cars like yours are in hot demand at the moment so it's not like they're doing you a favor by taking a clunker off your hands. If this isn't someone you'd ordinarily hand $1,000 off the bat, you shouldn't do so just because they want your car.
posted by Candleman at 1:24 PM on July 29, 2022 [5 favorites]

Does anyone have any perspective or practice regarding this?

I would never sell a car to a relative, under the notion that if I price it at market, the family member may think I am ripping them off, and if I price it below market, then I may have residual obligations to them if the car has issues after the sale.

Another perspective is - if you weren't selling your car, would you randomly give your relative some money? If so, sell the car to a private party other than your relative, and then give your relative that much money from the sale of the car. The net result is exactly the same due to fungibility of money. If you would not give your relative some money otherwise, there's no reason to give them a discount now.
posted by saeculorum at 1:29 PM on July 29, 2022 [3 favorites]

There is value to you in not having to list it and show it to people, but buying from you is easier for your relative as well. They don't have to visit dealers or call private sellers and they don't have to negotiate price with someone they have no reason to trust. There's a lot of value for them in buying a car from someone they know and trust who is presumably not trying to hide any issues. You could see giving them a chance to buy from a trusted person as being as good as a discount. If you're even more financially comfortable than they are, it would be nice to give a bit of a discount. A thousand seems reasonable and so does $500. If they're better off financially than you are, or if you're about even, I think it's fine just to ask for an amount on the low end of the range you found.
posted by Redstart at 1:31 PM on July 29, 2022 [1 favorite]

I agree that it is very risky to sell a used car to a family member. If you really want to do it, you might be able to mitigate the risk by offering to cover the cost of any unexpected repairs, up to, say, $2,500. Also give them a $500 discount off the price you'd give someone else.
posted by Winnie the Proust at 1:31 PM on July 29, 2022

and if I price it below market, then I may have residual obligations to them if the car has issues after the sale.

I think the opposite of this is actually one of the key underlying reasons for why people often give family a large discount -- if they know they got the car at a cheap price, they hopefully won't come back later and complain about any issues that turn up. You've created a sense of obligation, making it awkward to complain.

If you want to duck out of this entirely, it would be ok to say to them that you would rather sell it to a stranger to avoid any family awkwardness in case it turned out to be unreliable down the road.

But as others have noted, there is value both to you and to them for an easy transaction, where you know they aren't a scammer and they know you aren't deliberately selling a lemon. In my family, there has been a lot of selling cars to each other for exactly this reason. I'd think of the discount in terms of what it is worth to you to not have to deal with randos from Craigslist or FB Marketplace -- to me, that is a real plus.
posted by Dip Flash at 1:39 PM on July 29, 2022

I guess it depends on what this particular relative is like, but I don't see selling to a relative as inherently all that risky. It's possible that they would hold it against you if there turned out to be something wrong with the car but most people want to stay on good terms with their relatives and try to handle situations like that in a way that doesn't alienate anyone. If you sell to a stranger, there's no guarantee they won't call you up and yell at you or come to your house and threaten you or sue you if the car develops a problem after the sale. I would think there would be less danger of that with a relative.
posted by Redstart at 1:46 PM on July 29, 2022

One thing I'd allow a trusted relative to do, but not a stranger, would be to take an extended, perhaps multi-day, test drive.

I would then offer them a price that was at the bottom of the range of the dealer trade -in price (which will be somewhat lower than the private sale price). That downward price adjustment is a good market estimate for the marginal value, to the seller, of a smoother and less risky transaction compared to a private sale to a stranger.
posted by kickingtheground at 2:04 PM on July 29, 2022 [4 favorites]

Best answer: There’s a notion in economics that a used car is always a bad deal, because if it was worth what the seller was asking for it, the seller wouldn’t be selling it. So that’s something to consider.

The real question is, what are you getting for the difference in price, and how do you value that? The answer can be as simple as “not having to hear the family member complain about me selling it to something else”, or as others have commented, “not having to go through the hassle of listing and showing it”. Or feeling like a nice person, or whatever. Are any of those worth a couple thousand dollars to you? If so, knock a couple thousand off. If not, don’t.
posted by kevinbelt at 2:13 PM on July 29, 2022

Discount aside, in this case, I would insist that the relative take (bring?) the car to their mechanic for a pre-purchase inspection., and perhaps you could even offer to pay the cost of the inspection A.) there might be things wrong with the car that you genuinely are unaware of B.) If a problem does arise, it's "the mechanic's fault " for missing it, rather than your fault for selling them a lemon.
posted by Larry David Syndrome at 2:51 PM on July 29, 2022 [3 favorites]

How much do you need the money from the sale of the car? You say you can "afford" to take less but will that extra 2 or 3k make your life easier?
posted by mareli at 2:55 PM on July 29, 2022

Keep in mind that used car prices are quite a lot higher than normal right now. So depending on where you are getting your "private sale value" from, the actual average selling price right now might be higher than that - perhaps a lot higher, like $10,000.

"The average price tag for a used vehicle is $33,341 . . . the CoPilot research shows. If [normal] depreciation forecasts had held true, the average price would be $23,295, according to CoPilot’s index."

Just something to be aware of, whether selling to a relative or elsewhere.
posted by flug at 4:07 PM on July 29, 2022

Back in my parents’ and grandparents’ day, there was a sort of family tradition for situations like this one. Sell the car for market value, then file the title change to report a much lower sale price, saving some money and strengthening familial bonds with a little light tax fraud.

You shouldn’t do that, but you could.
posted by box at 4:46 PM on July 29, 2022 [1 favorite]

I just did this with a cousin.
Thing is about buying a used car is the dodginess of dealing with strangers and car yards. The benefit of buying from a relative is that you have a benchmark of trust that a) you aren’t going to sell a failing car and b) they’re not going to stiff you on price or payment. So, my cousin was able to read all the car’s history/ paperwork and take my car to his trusted mechanic for a good look over. I trusted him to hand it over for a couple of days to test drive it in a range of situations (we are rural, can’t just call Redbook to pop by).
In short he paid market value because the ‘family discount’ is filial trust, not dealing with used car sales people etc.
posted by honey-barbara at 6:45 PM on July 29, 2022 [1 favorite]

My husband just went through this exact scenario as the buyer about two months ago. He had been looking at new cars (since used was, up until the last few weeks, next to impossible to find in our area) but was on the fence about what he really wanted, because it was just out of his reach price-wise, and he didn't really want to dump 80% of that into something he wasn't going to be thrilled with just to be getting something to replace his current vehicle, which was about ready to drop dead.

His sister was quoting $13,500 to $15,000 as the private sale value (which we verified). He asked her straight-up, what's the family discounted price? She took a day and came back at $11,500 plus the ability to pay over about a year, which is important to him. So somewhere between 10% and 25% discount, depending how much she actually would have gotten. Done and done.

That said, I agree that some family dynamics make such a sale an extremely tenuous proposition. In this case, his sister is the type of person that would make good if it was something she could have foreseen but didn't think to disclose, and he is the type of person that isn't going to hold her responsible for something that randomly comes up that she couldn't have known about. But that is a very YMMV situation.
posted by tubedogg at 8:30 PM on July 29, 2022

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