How to Sell Your Car

If you’re in the market for a new car and want to get rid of an old one, you’ll probably wonder if you’re handling the process correctly. Don’t worry. Asking “What do I need to do to sell my car?” is a good thing. Agreeing to a deal is the easy part. Let’s discuss the legal mumbo jumbo involved in selling a car.

Transfer The Title

The car’s title is the legal document proving ownership. You must have the original copy in your possession and it must be free of any liens before you can transfer ownership. There are different requirements for title transfers in every state. Be sure to read up on what’s required in yours. If you have lost the title to your vehicle, you can apply for a duplicate title from your state Department of Motor Vehicles (DMV), usually for a small fee. It may take time for the office to process this request.

Deal with Liens and Outstanding Balances

If you’re still making payments on the car, you’ll have to make arrangements with your lending institution. If you’re paying off the loan up front, you must obtain a lien release from the lender, which states that there are no outstanding loan obligations on the vehicle. If you’re unable to pay off the loan immediately, your best option is to close the deal at the lending institution. There, you can use proceeds from the car’s sale to pay off the remaining balance. Then, sign the title over to the buyer. A third option, if the lender is out of state, or if you cannot pay off the loan even after selling the car, is to get a temporary permit from your state’s DMV and pay off the loan. Afterwards, mail the new owner the title as soon as possible. You should try to avoid doing this.

If there’s still a lien on your car even after it’s been paid off, you’ll need to contact the lending institution to get the matter resolved. If it is no longer in business, you can contact the Federal Deposit Insurance Corporation to obtain a lien release. This could take up to a month. So, get going.

Report to the DMV

Once you and the buyer have signed the title, you must report the change in ownership to the DMV in your state. Many states require that you do so within a certain amount of time, sometimes as few as five days. This can be accomplished by filling out a transfer form at the DMV. Your state DMV may also require that you pay a transfer fee.

Bill Of Sale

The bill of sale is a receipt for both the buyer and seller that declares transfer of ownership and lists contact information, the car’s details, the car’s price, and mileage. Your state may or may not require signing one but it’s a good idea to do it. To get a blank bill of sale, contact your state’s DMV (most have one available for download on their websites) or search for a printable one online. Make copies for the buyer and for yourself.

Other Documents

Some states may require other documents when you sell your vehicle, including those indicating the vehicle has passed an inspection, emissions or smog test. Be sure to check with your state’s DMV to find out the exact requirements.

Wrap Up

Unless you live in California, remove your license plates from the car or have them transferred at the DMV. You may have to return the plates to the DMV, depending on what state you are in. The buyer should contact his or her state’s DMV ahead of time to apply for temporary tags for the car. Contact the DMV to let them know the car has been transferred to a new owner. And contact your insurance company to either cancel your current policy or transfer it to a new vehicle.

In most states, as long as you’ve transferred the title, met the legal requirements, been forthright about the car’s condition, and followed the other guidelines presented here, you should no longer have any liability for the vehicle. Most states regard person-to-person car sales as an “as is” transaction.

When you’re ready to get quotes for the vehicles you like, why not get them online? You can have them sent from your local dealers to your email inbox. It’s easy. Click here to request as many as you’d like, all for free.


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