Question: I am thinking of selling my car privately. What obligations do I have to a buyer?A. Selling your car privately can be a great deal for both parties. Because there are no dealer overhead costs, the buyer pays a lower price than they would at a dealership, while the seller generally gets more than a dealer would pay for a trade-in. But selling your car privately is not easy. You need to be courteous, patient and extremely organized. Most of all, you need to be honest.
Before listing your car online, determine your vehicle’s fair market value (somewhere between the trade-in and retail values). Compare local dealer offers for similar vehicles at autos.lendingtree.com to help you choose a competitive selling price.
You will need a lot of patience and free time to schedule people to see the car. Answer any questions about the car’s mileage, condition and problems honestly. Keep all of your car’s paperwork in order so that prospective buyers can view it. This includes the title, registration, any inspection reports and repair records. A well-documented maintenance history can help get you a higher price for your car.
Once you have found a buyer and have negotiated a price that is acceptable to both of you, you will need to complete the required paperwork. Specific paperwork requirements vary from state to state, so you should check with your local Department of Motor Vehicles to find out the requirements for your area.
Generally, you will need to write a bill of sale for the buyer, signed by you and any other joint owners listed on the title. In some states, the back of the title serves as the bill of sale, with pre-printed boxes to fill in the information. The bill of sale should include your name, the buyer’s name, the vehicle identification number, year, mileage, make and model of the car, as well as the price and date of sale. Be sure to list somewhere that the car is being sold “as is” to avoid potential liability problems. Keep a copy of your bill of sale for tax purposes and consult a tax advisor about how the sale affects your tax situation.
Finally, you will need to transfer the title to the new owner and turn in your plates (if your state requires it). Don’t forget to cancel your registration and insurance. Keep photocopies of all paperwork from the sale for at least a year.
SVP and General Manager, Autos