How To Sell Your Car (The Right Way)
Selling your car can be a complex process, and plenty can go wrong. You want to find a reliable buyer and receive what you believe the vehicle is truly worth. And just as importantly, you don’t want to be held liable for anything after you have officially sold the car. Here are four legitimate ways to sell car and ways to avoid running into problems along the way. The information provided here is for general information only and should not be used as legal advice.
Four Ways to Sell Your Car
- Sell the car privately. This way may bring in the most money for your vehicle, since there’s no middle man. You’ll place ads online or in newspapers, meet with interested buyers, and negotiate with them. It’s extremely important to create a bill of sale, which states you are selling vehicle “as is,” and that the buyer has inspected it to his or her satisfaction. This will help ensure you’re not held liable for anything the buyer finds wrong with the car after the sale.
- Sell the car to a dealership. This way tends to be quicker and more convenient than selling privately. Head to a dealership that sells your brand of vehicle and have them make an offer. Shop it around to multiple dealerships to see which will give you the most. Note you’ll likely receive less money this way than when selling privately, as the dealer is out to make a profit when re-selling the car.
- Trade in the car. This is a practical option for those seeking to buy a new car from a dealership. The trade-in amount will go toward the down payment. The dealer does the DMV paperwork on your behalf and often agrees to pay off any money you still owe on the vehicle you’re turning in.
- Sell to a cash-for-cars company. This might be a last resort, as you’ll likely get the least money this way. If your car’s condition is poor and you haven’t had luck selling it privately or to a dealership, this might be the only option.
When selling my car privately, what sort of payment should I accept?
If it’s not cash, require a cashier’s check in payment. A personal check can bounce, and you’ll have to go after the buyer to get paid properly or recover the vehicle. When you receive the cashier’s check, cash it at the same bank that issued the check. Only after you’ve done that should you turn over the car and its title to the buyer.
What should I include in the bill of sale?
In a private sale, you’ll create this form and have the buyer sign it after they have inspected the car. Some states even require this document be part of a sale. You can get a free printable bill of sale template online. Both parties should sign it and walk away with a copy. This document helps protect you from legal issues down the line. It should include the following information about the transaction:
- Vehicle make and model and vehicle identification number (VIN)
- Mileage on vehicle at time of sale
- Sale price of vehicle
- Names of buyer and seller
- State and county where the sale transaction occurred
- Any warranty both parties agreed upon
Factors that Affect the Resale Value of a Vehicle
How much you’ll rightfully receive for your car depends on mileage (a good rule of thumb is 10,000 miles per year), condition of the exterior (a well-maintained look free of dents goes a long way), and mechanical performance (buyers run away from oil leaks and smoky exhaust pipes). Even the color can affect resale value: Experts say white is currently the most popular color among many vehicle categories; gold tends to be least popular.
What should I bring when trading in my car at a dealership?
When trading in your car, in addition to giving it a thorough cleaning, bring the following items to the dealership:
- All sets of keys
- Certificate of title, if you have it. (If it has gone missing, contact your state’s department of motor vehicles about getting it replaced)
- Any auto loan account information and payoff document
- Vehicle registration
- Owner’s manual
Selling your car can be a complex process. You want to find a reliable buyer and receive the amount you feel the vehicle is rightfully worth. And you especially don't want to end up liable for anything after you've handed off the car. Take the story of a man who bought a used Prius and sold it years later when the odometer indicated it had 95,000 miles. The next day, the angry buyer called him to say a Toyota mechanic found the mileage recorded by the dealership for the car years ago was actually a whopping 292,000 miles instead.
The seller knew nothing of these additional miles and concluded he had been the victim of odometer fraud when he originally bought the car used several years ago. Now the new buyer wanted his money back. Should the seller be forced to take back the car and return the money? Help protect yourself from falling into a bad situation like this by selling your car the right way. Here we'll list four legitimate car-selling options.
Option #1: Sell the car privately. Not going through a middle man will help ensure you get the most money for your set of wheels. After you determine the vehicle's market value, place ads online or in local newspapers, and meet with potential buyers so they can take a test drive. You'll want to create a bill of sale stating the vehicle is being sold "as is," and has been inspected by the buyer. For help creating a bill of sale, check out our guide to selling your car. You can find it right beneath this video.
Not going through a middle man will help ensure you get the most money for your set of wheels.
Personal finance writer William Baldwin recommends a number of measures when selling your car to another person. These include thoroughly cleaning your car, taking photos in sunlight, setting up a dedicated Gmail or Hotmail address to communicate with potential buyers, and meeting in a safe public parking lot. If the person wants a test drive, take a photograph of his or her driver's license before they leave, just in case.
While we aren't lawyers and this isn't legal advice, it is important when selling your car to be careful with advertising. In your online or written ad, ensure you accurately represent the condition of your car. This way, no one can sue you for breach of contract after they buy the car.
Option #2: Sell the car to a dealership. This may prove much quicker than selling to a private party. Look up the trade-in value of your car before you visit the dealership. Go to a dealership that sells your brand of vehicle. If you don't like the offer they make, shop it around at other dealers. While selling to a dealer may be more convenient than selling privately, know that you'll probably get less money for your car this way.
Look up the trade-in value of your car before you visit the dealership.
When selling to a dealership, consider finding one in a city with higher demand for used vehicles. That's how C.N.B.C. reporter Jimmy Im got more money for his 2013 G.M.C. Terrain sport utility vehicle. He used an online service to shop the car around to dealerships and found out he could get $2,000 more from a dealership in Atlanta than from any dealerships in his home town of New Orleans. He made the trip after determining the extra mileage would not affect the value of the vehicle.
Option #3: Trade the car in. While we're on the subject of dealerships, if you're purchasing a new car from one, trading in your old car is a practical option. Note that you will not likely receive as much money as if you sold the car privately, but many people believe in paying for the convenience. The dealer does all of the D.M.V. paperwork on your behalf, and some states provide a tax advantage for trading in your car. You may need a number of documents and other items before trading in your vehicle. For a list of them, refer to our full guide to selling your car. Scroll below this video to read it.
If you still owe money on a car when trading it in, the dealership will often commit to paying off the loan. Make sure they follow through on such a promise. Take the story of Miguel Claussell, who traded in a Toyota Camry at a New Jersey dealership which agreed to pay off the loan on the car. However, after two months and several visits to the dealership, Claussell said he was still waiting for them to pay off the loan. In the meantime, he had to make the payments on the Camry no longer in his possession, reports said.
In the meantime, he had to make the payments on the Camry no longer in his possession, reports said.
Option #4: Sell to a cash-for-cars company. This might as well be your last resort, as you'll likely get the least money out of it. If for whatever reason, you don't want to sell your car to an individual or to a dealership, you can find a local company that will give you cash for it. Maybe you feel your car is junk and worth so little that almost no one would want it. In that case, a company like this might be the right option for you. "We buy cash for almost any car," one such company advertises.
In all, you've got many options for selling your car. Which one you choose will depend on your preferences and situation. As always, being careful and doing the proper research will surely pay off. We've got more tips on getting the most for your car and protecting yourself during the sale. For these valuable resources, scroll below this video to find our full guide to selling your car.
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