When you have arrived at a satisfactory price with the car buyer, there's a few kinks to work on. And ignorance of the steps to take when you sell used car sometimes could spell trouble.
Rules governing auto sales vary from state to state. Check with the department of motor vehicles (DMV) in your state, and keep in mind that much of the information is now available on DMV Web sites. Or you can go to this unofficial DMV site to download forms about your sale. Just click on your
When you sell used car, you either request cash or a cashier's check, record the odometer reading of your car at the back of the car's title (the so-called pink slip) and sign the car's title over to the buyer. In some states, the license plates go along with the car. A new title will be issued and mailed to the new owner. Also, in most states, a release of liability form can be downloaded from the DMV web site. The following is a Notice of Transfer and Release of Liability Form at DMV California and gives you an idea of what information is required. In California, you are required by law to to notify the DMV from the time you sell or dispose of your vehicle. This is to protect you, the seller, from any liability arising from traffic violations and civil litigation after the sale of your vehicle to the subsequent buyer. This form establishes the time at which the car left your possession.
Also, bear in mind that after you sell used car you are released from any maintenance liability. In most states, the condition of a used car for sale is considered "as is" and no warranty is provided or implied. Therefore, if the car breaks down after you have sold it, you are under no obligation to refund the buyer's money or pay to have it repaired. When you show a car to someone who took it for inspection at a garage and the mechanic found nothing wrong with it, you have done all you can to protect yourself and the buyer.
Another issue of importance is when after you sell used car and you don't have the car's title, AKA pink slip. Yes, you still owe money on the car, and the bank is holding the title. You just want to get rid of this car and get another. There's no way you can pay off the balance and you depend on somebody buying the car so you can put that money as a down payment to buy a new vehicle.
First of all, I congratulate you in doing that; it's a great decision. Much, much better than trading your car at a dealership. Dealerships typically offer you $1500- $6000 less
than the market value of your car. You can attribute it to greed or just their way of doing business. But however you think why they do it, avoid trading your car at all cost. Sell a car first via a private party sale, realize the full value of your car, then use the extra money in the sale for down payment or extra monthly payment when you start paying your car loan.
If you sell used car and you've not paid it off, one way to deal with this
is to conclude the sale at the bank where the title is held. Arrange with them to have the title ready.
Then, once money has changed hands and the bank has been paid the balance of the loan, sign the title over to the buyer. If your lender is an out-of-state bank you can go with the buyer to the DMV and get a temporary operating permit based on a bill of sale. In California, here's a Bill of
Sale sample. Then, after you pay off the balance of the loan with the proceeds from the car sale, have the title mailed to the new owner. Sign it over to the new owner and the transaction is complete.
A couple more tips: after you sell used car and title had changed hands:
1. Remove all personal items from your car before it is driven away by the new owner.
2. Remember to contact your insurance agent to cancel your policy on the vehicle you have sold (or transfer the coverage to your new car).
Find out the best way to sell your used car by taking advantage of car-selling advice from this great car site or listing your car with them: