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How do I prepare for selling a car?

Preparation is the one thing that most people overlook when selling a car. Before selling your car, be sure to know what the law requires. Laws vary by state, so check with your state’s DMV for all specific laws and regulations. In California, for example, sellers must provide a recently passed smog check to buyers, in addition to signing over a title.

Before setting an asking price and placing an ad, you may want to gather your car’s paperwork and accurately assess the condition. This includes your original sales paperwork, the car’s title, and any service records that you may have. Give the interior and exterior of your car a thorough inspection and cleaning to make the best impression possible. Repair whatever dents and damage that you can, and have any maintenance records or mechanic’s reports ready to show buyers.

These documents will provide buyers with important information about your car, including your car’s style and any optional features it may have, such as leather seats, a navigation system, or keyless entry. These additional features will add to your car’s resale value and allow you to create a thorough description of your car. Service records also serve as proof that the car is well-maintained and in good working condition.

In addition to this paperwork, you may also create a Bill of Sale to be ready to make the sale official with your buyer. We offer a customizable Bill of Sale template that you can have ready to use to complete your sale.

Can I improve my car’s resale value?

While you always have the option of selling your car as-is, it is often better to go the extra mile to fix up your car and increase its resale value. Depending on the condition of your car, it may be worthwhile to:

  • Invest in a professional cleaning.
  • Replace the car’s lights.
  • Fix windshield chips or cracks.
  • Replace worn tires.
  • Fix any cosmetic blemishes.

It’s also a good idea to get the car’s oil changed and to perform any scheduled maintenance before putting your car up for sale. Depending on your car’s overall value, however, you may want to not put too much money into fixing it up. Taking good photographs for your online ad and creating a detailed and accurate description can help attract more potential buyers. 

How do I set an asking price and place an ad?

Setting an asking price is one of the most challenging parts of the process. Determining the value of your car is no easy task. Most sellers will first check the Blue Book value of their vehicle and set a price based on this number. It may also be a good idea to check the local classifieds and online ads to see what other people are asking for with similar cars. The three parts to setting your price include knowing your car, understanding the market, and setting a price to attract buyers.

Know your car. Before you put your car on the market, be sure to know all important information about your car, as potential buyers will want to know this. Know the car’s VIN, make and model, condition, mileage, color, maintenance history, and any special features that could attract buyers. These can have a significant impact on your price.

Know your market. What kind of potential buyers will be interested in your car? For example, are you selling a sleek, high-speed sports car or a more family-friendly minivan? Try to target your advertising to this demographic or geographic location, and understand what your buyer will need to pay for a similar car in your area.

Set your price. When setting a price, consult other advertisements to see what other similar car sellers are asking for in your area, and see where your car would fit in that range. Consider the condition and mileage of your vehicle against those in the market. You generally can get a lot more money by selling the car yourself rather than by trading the car in at the dealership. But many buyers will not pay the same price that a dealership would charge when buying a car privately. However, it is not uncommon for people to go to a car dealership just to see what the dealer would give them. If you choose to sell it yourself, define your accepted forms of payment to potential buyers.

If you’re looking for a quick sale, you may want to set your price lower than average, but above the trade in value. A lower price may also be appropriate if the car was in an accident or needs major repairs. Cars that are well-maintained, under a transferable warranty, or have just had new tires or brakes installed can demand a higher price.

Making your ad. Once you’ve settled on an asking price, you can place an ad in the local newspaper or online. If you’re unsure of how to sell a car online, most websites will provide you with a simple guide on how to upload your listing and interact with buyers. 

The better you advertise your car, the more likely it is to be sold. Increase your car’s visibility by posting ads in more than one place online, or in local newspapers and magazines, and put “For Sale” signs in the car windows. One of the most common buyer questions is the reason you are selling your car, so be sure to briefly answer this in your ads. Remember to be honest: caution them on anything about the car that needs fixing.

How do I screen potential buyers?

To make the sales process as stress-free and simple as possible, you should consider screening potential buyers before setting up appointments for test drives. Ask for the buyer’s full name and make sure that you clarify which methods of payment you accept. You may want to see a driver's license, and talk to the buyer before allowing a test drive, as well as confirm your car will be covered by your or their insurance.

You may want to limit buyers looking to pay in installments or who are trying to secure financing. Often, payment is made in cash, or through certified check or money order. Be sure to get payment in full before handing over the keys and signing over the title.

How do I complete the sale?

Once you find a buyer, you and the buyer will need to sign and date a Bill of Sale. While not required in all states, a Bill of Sale is a good idea because it documents the terms and conditions of the sale in writing. It includes the purchase price, the VIN, the model and year of the vehicle, the warranty and odometer provisions, and the signed legal names and addresses of both the seller and the buyer. In addition to completing a Bill of Sale, you’ll likely need to:

  • Sign over the car’s title to the buyer. A federal law now requires that in every state, the seller must provide the vehicle title and some form of odometer disclosure listing the vehicle's current mileage at the time of the sale. The vehicle title transfer usually involves signing and dating the back of the vehicle title. The buyer then needs to go to their state's DMV and apply for a title in their name.
  • Fill out, sign, and submit the release of liability to your local DMV, if required by state law.
  • Remove the car from your insurance policy.
  • Some states may require you to remove the license plates.

Before handing over the keys to the buyer, make sure that you make copies of all the signed paperwork. Additional paperwork may also be required by your state, so make sure that you research local laws and regulations before completing the sale.

If you have more legal questions about selling your car, reach out to a Rocket Lawyer network attorney for affordable legal advice.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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