How to Sell a Car Safely

  1. Research Center
    2. /
  2. Car Selling Research Articles
    3. /
  3. How to Sell a Car Safely

How do I Safely sell a Car?

It's important to take precautions when selling a car. This includes:

  • Being careful about how you advertise the car
  • How you communicate with possible buyers
  • How you handle test drives
  • How you accept payment for the vehicle
  • How you follow through with the Title transfer
 
It seems that there are scams out there everywhere you look. There are phone scams, online scams, email scams, you name it. With this article, we hope to make it easier for you to sell your car safely. Let's start at the beginning with how to find buyers.
How do I find Car Buyers?
Once you've cleaned and waxed your car so it looks its best, and taken photos for ads, it is time to think about finding a buyer. There are lots of ways to find qualified car buyer including through word of mouth, through online services, by placing a classified ad or a physical "For Sale" sign.
 
You can let your friends and coworkers know that your car is for sale. Maybe even put up an ad in the lunchroom. Even in our computer-driven work, people still place For Sale signs in their car windows. Just be careful about sharing any personal information outside of your cell phone number on the signage.
 
Many sellers place a classified ad in the local newspaper or with services such as Auto Trader to sell their used car. Once the word gets out that you have a vehicle for sale, be on guard for potential scams, especially when it comes to how you are paid for the car. Beware of buyers who want to send you payment electronically. Never release your vehicle or its Title before the money is safely in your bank. Many online classified ad services utilize automatic forwarding so that the potential buyers don't have access to your personal information such as your phone number or email address. You can also consider creating a new email address just for the sale of the car so you can keep all correspondence regarding the vehicle sale all in one convenient place.
 
Remember that it is best to avoid giving out any personal information to people you don't know. This includes your home or work address and any details about your life, schedule, etc. Stick to details about the car and its service history. Screen the buyer by speaking with them on the phone. Invite the buyer to ask you questions about the car to gauge how serious they are. Ask how they intend to pay for the vehicle. Let the buyer know that you will not accept an out of state check, just a cashier's check or cash. Also let the potential buyer know that you will need to see his or her driver's license and auto insurance card before you allow them to test drive the car.
How do I Handle a Test Drive?
When scheduling a test drive with a prospective buyer, safety is key. Meet in a public place such as a local park, shopping mall or near the buyer's bank where there are lots of other people present. Schedule it in full daylight if possible. If you absolutely have to schedule the test drive at night, make sure the area is well lit. If it is at all possible, bring a friend or relative with you to provide safety in numbers. If you must go it alone, tell someone where you are going and how long the test drive is likely to take. You can even have a friend call you in an hour to make sure everything is okay. This may sound overly cautious or dramatic, but it's better to be safe than sorry.
 
Set up a time and place with the buyer for the test drive without revealing information or details about your schedule. Bring any documents that show the vehicle's service history, your driver's license and auto insurance card. Make sure you have the vehicle registration card and Title. The Title must be free and clear of any liens.
 
Do not let the buyer show up at your home. The entire process of the test drive needs to take place in a convenient, neutral location. Plan ahead when it comes to the test drive route. It should be fairly short and include well populated areas. It should include streets as well as a short drive on the highway so that the potential buyer gets a good feel for how the car handles.
 
Never let the buyer take the car for a drive alone. Before you get in the car, ask to see the buyer's driver's license and insurance card, and copy down the buyer's license number, name, address, and insurance policy number. Make sure the buyer has liability insurance in the event he or she gets into an accident during the test drive.
How do I proceed with the Sale?
Once the buyer agrees to the price and decides to buy your car, how do you protect yourself legally and financially when proceeding with the sale? First of all, agree on how you are to be paid. If the buyer does not have cash in hand, follow along to his or her bank or credit union to get the funds for the car. If you are dealing with a bank, funds can also be transferred to your account electronically.
 
Make sure to document the sale in writing. Make a Bill of Sale that includes the vehicle year, make, model, and VIN number, its current odometer reading, how much is being paid for the vehicle, and make sure to include that the car is being sold AS IS. Then date and sign the document as the seller and have the buyer sign and date it as well.
 
If the buyer wants you to drive to another location to arrange a loan or pick up the funds for the sale, do not go for it. Let the buyer know to leave you a deposit on the car if they are serious and go and secure the funds for purchase. When they have the funds, they can call you to conclude the sale. Most importantly, keep the vehicle Title unsigned and out of sight until you have been paid in full for the car. Cash or a cashier's check are the most foolproof forms of payment. Also, don't cancel your insurance on the vehicle until the Title and registration has been transferred to the new buyer.
How do I handle the Title Transfer?
Transferring the Title and handling other paperwork when selling a car to a private buyer varies from state to state. Check with your Department of Motor Vehicles on procedures for transferring the vehicle's Title to the new owner. It is best to go with the buyer to the DMV to process the paperwork. This may include the Title that you have signed over to them as well as the mutually signed Bill of Sale, a Release of Liability form, and an odometer disclosure form.
 
An accurate odometer reading is very important because once you sign off on the odometer disclosure, it acts as proof of the exact mileage when you sold the car. Otherwise, the new owner could have an accident after the sale and claim the car was still yours at the time.
 
Make a copy of all sales documents for your records. Make sure you copy both sides of the Title. You can find a sample Bill of Sale form and Release of Liability form at dmv.org as well as excellent articles on car selling.
 
It's important that your state DMV has the signed Release of Liability form to make sure you are not held responsible for anything that happens to the vehicle after it has been sold. For more information, contact your local DMV.