My wife and I recently went through the process of buying a newer car (definitely not NEW) and selling our older car. Her older car was getting up there in both age and mileage, and we knew it was time for a new one. We were actually quite fortunate and were able to sell the car to a friend that was in the market. Although I think that we could have gotten a couple hundred more selling on Craigslist, avoiding the hassle altogether was worth it. I learned that there is quite the process to selling a car, and figured as best I could to document and explain it for you!

This article will contain info directed more at selling to a private party, as often you can get a better deal and more cash instead of selling to a dealer. Going through a dealer however will offer you convenience and they’ll certainly walk you through the process. This post isn’t meant to be an all-inclusive list and more of an overview. Be sure to do your homework before getting started!

Title:

The two most likely scenarios you’ll find yourself in when buying a car is either owning the car outright, or still making loan payments to your lender. If you own the car, you’ll have the title to the car on hand. If you don’t own the car, your lending institution will have the title. Completing the sale of your vehicle will include the transfer of the title. If you have the title, you’ll just fill out the information on the title indicating the sale, which will include information about the buyer. You’ll sign on the dotted line indicating the sale, and you may have to record the actual mileage of the vehicle. In some states, this signing is required to be notarized, in other states it isn’t. Often times sales will go down in a bank, and the bank often has a notary free or a small fee) of charge.

If you are still making payments, this information will be recorded on the bill of sale (explained later) and you’ll use the receipts from the sale to pay off the loan. If you aren’t getting enough from the sale to cover the loan, that’ll be on you and you’ll still be forced to pay the balance of the loan. Before going through with the sale, call your lending institution and they’ll provide you with detailed instructions on how to pay it off and conduct the sale. You often can have the title sent directly to the buyer, or you’ll receive the title and send it over to the buyer.

Bill of Sale:

The bill of sale is the other necessary document in the car sale transaction, and is essentially a receipt, showing that you sold the car to said person, for said amount. This form can be as simple as “I, [insert name here] sell [enter make, model and VIN] to [buyers name] for [enter amount of money]. You can easily find templates online, and a lot of states will have templates that comply with any state specific information. One good thing to note is that you should write “as-is” on the bill of sale, as to not imply any warranty. The last thing that you want is the buyer coming back a week later asking for a refund. As with the title, this document may or may not need to be notarized in your state.

Advertising and Meeting up:

There’s no real secret sauce for advertising your car to potential buyers. Craigslist, AutoTrader, newspaper classifieds and even a good old “For Sale Sign” parking in a public place could work. You’ll likely be contacted by several interested parties, and unfortunately not all of them will pan out. Any meet ups should be done in a very public place, like a bank, police station or grocery store parking lot. We’ve all heard horror stories about Craigslist meet ups gone bad. A good buyer will likely want to take the car for a test ride, and maybe even to a garage to get checked out. It’s probably advisable to be present for this part of the process. When the deal is ready to be made, insist on cash or a cashier’s check. Personal checks just can’t be trusted.

Closing the deal:

When it comes time to do the deal, you’ll (potentially notarized) sign the bill of sale and title over to the buyer. They’ll hand over the cash/cashier’s check and you’ll have yourself a done deal. Depending on the state, you may or may not have to take the license plate with you. In my state, Georgia, the license plate stays with you and the buyer will have to put their plate on it themselves. Finally, call and cancel your insurance, no sense paying for insurance on a car you don’t own anymore!

Buying and selling a car can be a tedious and confusing process. Exercise good judgment when selling to an individual, and always play it smart. Do some homework ahead of time to see if there are any particular requirements in your state for the process as well as any local city/county requirements. Best of luck in your car selling endeavors!

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