How to buy and sell a vehicle – a checklist
Consider using a Vehicle bill of sale agreement as a checklist before the sale takes place.
Prepare the paperwork
The seller should prepare the paperwork, including the V5C registration document (logbook), manual or handbook, MOT certificate and service log and warranty (if there is one). The seller may have to apply for a new logbook if they have changed their name or address, or made changes to their vehicle.
Inspect the vehicle
The buyer should carefully inspect the vehicle and add any problems, such as flaws or damage, to the agreement so that it is ‘sold as seen’. Selling a vehicle ‘as seen’ (or on an ‘as is basis’) helps protect the seller from liability in case the buyer later has a problem with the vehicle.
Potential buyers can ask to see the seller’s logbook to check if the details match the vehicle they’re inspecting. To avoid someone obtaining a fraudulent copy of the logbook (putting the vehicle at risk of being stolen), sellers should take care not to share:
the logbook document reference number
pictures or copies of the logbook
Enter into an agreement
Both parties should agree on the price and fill in the necessary details (date, price, registration, make and model, names and addresses) on the Vehicle bill of sale.
Make two copies of the completed agreement (one for the seller and one for the buyer) and sign both.
The seller must inform the Driver and Vehicle Licensing Agency (DVLA) that they have sold their car. How this is done depends on where the buyer is registering the vehicle.
If the buyer is registering the vehicle in the UK, the seller should give the buyer the logbook’s green ‘new keeper’ slip. The seller should tell DVLA that they have sold the vehicle, providing the full name and address of the buyer. This can be done online or by completing their logbook and posting it to the DVLA.
If the buyer is registering the vehicle abroad, the seller should complete the logbook’s ‘permanent export’ section and post it to DVLA. They should include the buyer’s full name and address. The buyer should give the rest of the logbook to the buyer so that they can register the vehicle abroad.
When the seller tells DVLA that the vehicle has been sold, the vehicle tax will be cancelled and the seller will automatically get a refund.
The seller must hand over to the buyer the vehicle, handbook, service log and MOT certificate (if it has them).
Insurance arrangements for the vehicle must be changed to reflect the change in ownership.
If a caravan is being sold, the type of agreement needed will depend on the type of vehicle being sold. There are a variety of different types of caravans, such as motor caravans and trailer caravans.
'Motor caravan’ typically means a special purposes passenger car constructed to include living accommodation. It contains at least the following equipment:
seats and table
sleeping accommodation which may be converted from the seats
This equipment should be rigidly fixed to the living compartment. The table may, however,be designed to be easily removable. For more information, read the Government’s guidance.
In this instance, motor caravans are usually classified as 'vehicles' and a Vehicle bill of sale can be used.
'Trailer caravans' are usually seen as those which are towed by another vehicle (such as a car). In this instance, as these are usually stationary (only with the exception of when they are being towed), they would normally be classified as 'goods'. As a result, a Sale of goods agreement may need to be used for the sale of trailer caravans.
For more information on what categories caravans come under, read the Vehicle Certification Agency’s guidance.
If you are selling the vehicle...
If properly completed, the Vehicle bill of sales creates a legally binding full and final settlement for peace of mind. This is the case even if the vehicle is damaged provided that the:
seller accurately described the vehicle in any advertisements
seller does not tell the buyer something which is untrue
vehicle is roadworthy
seller has the legal right to sell the vehicle
It provides a reminder to the seller of the important details to check before the sale to avoid problems or price reductions.
It also includes an obligation on the buyer to pay the whole sum within a certain time in cleared funds before the buyer can take ownership of the vehicle.
If you are buying the vehicle...
The Vehicle bill of sales provides a list of the important details to check, such as the correct paperwork and whether the vehicle has been used as a rental car.
Under this agreement, the seller must tell the buyer about any damage or problems before the sale. This is because under the Consumer Rights Act 2015 private buyers who buy from private sellers have certain (limited) consumer rights.
It also includes an obligation to send the New Keeper registration certificate document to the DVLA.
What if a business is buying or selling vehicles?
The situation is a bit different when it is a business, rather than a private individual, who is buying or selling vehicles.
If a business is selling vehicles to consumers (ie private individuals) they will need to comply with the Consumer Rights Act 2015. Under the act, goods sold by businesses to consumers must be:
of a satisfactory quality
fit for purpose, and
If a business is selling vehicles to business customers or if a business is buying vehicles from a business seller the Consumer Rights Act 2015 does not apply. Instead, such business-to-business (or ‘B2B’) transactions are governed by the terms of the agreement (eg Terms and conditions) between the parties. If any of the agreement’s terms are broken, this can result in a breach of contract. For more information, read Breach of contract B2B or Ask a lawyer.