If you’re curious about how to sell a car privately, you likely already know that a private car sale can usually bring you more money than trading it in…but that it’s also a lot more work.
Indeed, says Karl Brauer, executive analyst at automotive research firm iSeeCars.com, “Selling to an individual, you can get much closer to market value without having to leave profit margin for a middleman.” On the other hand, it takes time and effort, and it forces you to deal with strangers.
There’s a lot to think about in terms of paperwork, preparing the car, pricing it, marketing it, and protecting yourself. So, we asked Brauer to guide us through how to sell a used car privately, how to sell a car safely, and how to sell at an attractive price.
Decide Whether a Private Sale Is Right for You
“One of the main considerations is that time is money,” Brauer says. Every day that passes without your car selling is wasted time, and you sometimes have to deal with a string of inquirers before you finally land a sale.
That’s a lot harder than walking into a dealership and taking what they’ll give you. “A lot of people say, ‘I don’t care how much money I’m losing. It sounds like a nightmare. I’m not going to sell my car privately,” Brauer says.
Gather the Paperwork You’ll Need
Before you list your vehicle, dig up all the important papers pertaining to it. Such as…
1. The Title
Of all the private car sale paperwork, the most critical is the title, without which a legal sale is nearly impossible.
A “clean title” (one without liens or a “salvage” or “rebuilt” status) makes a car much more desirable. If you can’t find yours, you’ll have to send away for a replacement, which could take weeks.
2. Bill of Sale
You’ll also want to prepare a private car sale bill of sale long before you have a buyer. This is the receipt that will show that you received the sale price and the buyer received the car.
Although the basic information it contains is similar nationwide, check your state’s requirements. Some prescribe certain forms while others allow you to write your own, and some require notarization while others do not.
See if your state DMV provides an online form or template. Generally, you and the buyer will provide such information as:
- Names and addresses
- Date of sale
- Odometer reading
- Vehicle identification number (VIN)
- Make, model, and body type
- Vehicle condition
- Agreed-upon price
Other documents
Car buyers love to know that a vehicle has been well cared for, so gather up whatever service records you’ve retained, including:
- Service and maintenance records
- Owner’s manual
- Warranty information
If there’s a lien on the car
You can still sell a car privately if there’s a lien on it, but, Brauer says, it’s trickier. “Say you’re selling the car for $20,000 and there’s still a $14,000 loan on it,” he says.
“Ideally, you and the buyer could go to the bank together. The buyer gives the bank representative the $14,000, the representative releases the lien, and the buyer pays you the remaining $6,000 right there in the bank.”
But what if you can’t meet the buyer at the bank holding your car’s loan? You’ll need to contact the lender before completing the sale and ask for:
- The exact payoff amount
- Accepted payment methods
- Instructions for releasing the lien
- Instructions for transferring the title
You may be able to arrange for the buyer to pay the lender directly and pay you the remaining proceeds. Alternatively, a reputable escrow or vehicle-transaction service may be able to coordinate the payments and paperwork.
Whatever method you choose, agree on the process in advance, document the payments, and make sure the buyer understands when and how the lien will be released and the title will be delivered. If the sale price doesn’t cover the loan balance, you’ll need to pay the difference yourself.
Price Your Car Realistically
“The single biggest variable in making a transaction happen as time-effectively as possible is choosing a realistic price,” Brauer says.
Too many people expect to make a fortune on their cars or believe that their vehicles are somehow superior to others of the same year, mileage and condition. When it comes to how to price a car for private sale, you have to be pragmatic. To expedite the sale, aim for just below market value.
Before you list your car, look for similar vehicles for sale in your area. And use the valuation tools available on sites like iSeeCars.com, KBB.com, and Edmunds.com.
Prepare the Car for Sale
You’ll want the car looking its best. Clean it and detail it. One trick, per Brauer: “The glass on the inside of a car can develop a hazy buildup. Simply cleaning it well with glass cleaner so that you end up with a crisp, extra-clear view through the glass gives a subtle, almost subliminal impression of quality.”
Make any small repairs that are cost-effective, such as replacing burnt-out bulbs, changing the oil, filling the washer-fluid reservoir, and taking out small dents using paintless dent removal. Such improvements can boost your price or speed up a sale.
Create a Listing That Builds Trust
“You want to be very straightforward while highlighting the most appealing aspects of the car,” Brauer says. “Communicate the basic elements as quickly as possible, without being overly sales-y.”
If the car has low mileage, say so. If you have all the service records or you’re the car’s only owner, say so.
But you must also be upfront about any problems. If you don’t disclose issues and someone comes to look at the car, you’ll have wasted everyone’s time.
Be thoughtful and thorough when you take pictures for your listing. “Presenting the car well makes a huge difference in the level of interest and the likelihood of getting the price you want for it,” says Brauer.
Pay attention to the lighting and background of your shots. Walk around the vehicle slowly, shooting as you go, so you end up with a 360 effect. Get in close on any flaws or damage. If there’s a ding in the paint, put a quarter or a pencil next to it for scale.
“A good listing will have at least 10-15 photos, though you could have dozens for high-value vehicles—the more the merrier,” Brauer says. “You’ll want a front three-quarter, a rear three-quarter, two profiles, a head-on front, a head-on rear, an engine shot, a driver’s perspective of the dash and gauge cluster, a shot of the front seats from the side, rear seats, and cargo or interior trunk. It’s almost impossible to provide too much visual information on a car.”
Screen Buyers and Set Up Test Drives Safely
Your time is valuable, so don’t waste it on low-ballers and tire-kickers. Earnest buyers will have lots of questions and won’t be in a hurry to arrive at a price.
Arrange showings and test drives in a public place, especially somewhere extra-secure like outside a police station. Bring someone with you.
Before any private car sale test-drive, make sure the prospective buyer has a valid license. Ask them for the keys to their own vehicle during the test drive, and request to ride in the passenger seat.
Negotiate the Sale and Handle Payment Carefully
No payment method is completely safe. Cash is possibly the most foolproof, although counterfeit bills do exist, and it can be dangerous to carry large amounts of money.
A cashier’s check is a good practical option if it’s obtained and verified directly with the issuing bank. But they can also be counterfeited.
For larger transactions, bank wire transfers are useful, but confirm receipt of the funds before transferring title. Personal checks are risky, as are payment apps and cryptocurrency.
Conducting the sale in a bank is smart even if there’s no lien on the car. You can ask a bank representative to confirm that the buyer’s check is good before you transfer title, and you can also have the bank’s notary certify any documents that require notarization.
Under no circumstances should you transfer the title before payment is secured. Never accept funds in excess of the agreed-upon price or send money back to a buyer who claims to have overpaid.
Complete the Transfer and Final Steps
Exactly what final steps need to be taken will vary by state. Educate yourself by visiting your DMV’s website before the sale. That will be your best resource for how to transfer title when selling a car, as well as other considerations.
For example, in some states, the license plate stays with the vehicle. Others have special vehicle release forms that, if not completed, retain your liability pertaining to the car.
As soon as you’ve made a sale, call your car insurance company to cancel the policy.
Final Thoughts
“Selling a car privately is something most people should be able to do,” Brauer says. “You just have to prioritize safety, paperwork, and accuracy.”
