Using Competition to Increase Your Sale Price
One of the most effective and probably simplest ways to increase your sale price (through a private sale) is to use the principle of scarcity; items in short supply are considered more valuable.
The way it works is simple in principle, but slightly more difficult in execution. When you have written an ad that generates sufficient interest in your car that multiple people have expressed interest in seeing it, schedule the prospective buyers to come at the same time.
One benefit to this is that it will save you a ton of time dealing with different buyers separately. If you schedule buyers to come at different times, you might take up your whole weekend showing the car, because you are constrained by the fact that you need to be around when they show up. Inevitably, people will cancel or try to reschedule, which makes selling the car even more of a pain in the ass because you will probably have commitments at other times in the day which are conflicting.
Even more time is saved because you are greatly increasing the chances that the car will be sold each time you show it. When a buyer comes and sees someone else looking at the car at the same time, he will see that there is a real chance he might not get to leave with the car unless he acts quickly to capture the deal.
The first time I heard about this technique from a friend, I thought it was a truly novel idea. I soon found out that in Robert Cialdini’s book Influence, he discusses this exact method of selling cars in a chapter dedicated to the principle of scarcity. He says that his brother used this technique to flip cars and pay his way through college by buying undervalued cars one weekend and then selling them the following weekend after cleaning them up a bit.
Schedule 2 or 3 prospective buyers to show up at the same time (writing an ad that will do this is really the most difficult part). When the first buyer shows up, he will begin inspecting the car as you would normally expect. Once the second buyer shows up, however, mention to him that he will have to wait for the first person to complete his inspection of the car since he arrived first. Tell buyer #2 that if buyer #1 decides not to purchase the car, they can have a look at it and decide if it is right for them. If a third buyer shows up, repeat the same process with him.
This does several things to help you sell your car:
- It applies time pressure to the buyers
- It clearly demonstrates the demand for the product (social proof that it is valuable)
- It takes something originally considered abundant and turns it into something scarce
Cialdini points to several experiments indicating that the principle of scarcity is most effective in raising the perceived value of an object or freedom when it is readily available and is subsequently taken away rapidly.
Car salespeople use this technique every day to encourage people to buy, mentioning usually that a car has a unique and highly desirable set of options, or that the model itself is in high demand and/or short supply.
