How to sell a car privately: 5 steps

No car lasts forever — and when you’re ready for a fresh set of wheels, it’s important to understand all your options, including whether it makes sense to sell your car privately.

You could sell your car outright to a car dealership or use your equity in the car as a trade-in toward something else. Another way to go — selling it yourself to a private buyer — requires the most work but could be the best way to get the most money out of your vehicle.

Here’s what you should know about selling a car privately, from starting the process to finishing the paperwork.

• What are my options when selling my car?
• What is the best way to sell a car privately?
• What paperwork do I need to sell my car privately?

What are my options when selling my car?

Most Americans have two primary options for selling their car: selling at a car dealership or selling privately.

Selling the car to a dealership is typically the easier way to go — it’s usually less time-consuming than selling your car privately, and may be less of a hassle. If you’re buying directly from a dealer, you may be able to sell your current car to the same dealer as a trade-in.

But there’s a big disadvantage to selling your vehicle to a dealership: You’ll likely get less money for the car than you would from a private sale.

What is the best way to sell a car privately?

If you want to sell your car privately, here are five steps you can take to help make the process run smoothly.

1. Understand your car’s value and set an asking price

Before you put it on the market, determine the fair market value of your vehicle. Credit Karma members can use the Credit Karma car valuation tool, and there are other sources that can help you estimate how much your car is worth, including Kelley Blue Book, the National Automobile Dealers Association Guides, Edmunds and Consumer Reports. Using more than one source will help give you the most realistic idea of what your asking price should be.

2. Prepare the car for sale

When prospective buyers check out your car, they’ll give it a visual inspection — and they may even bring a mechanic along to take a look under the hood. So it’s a good idea to have your car inspected by a qualified technician before you make the vehicle available. This gives you a chance to make any necessary repairs that could otherwise hold up a sale.

There are some other things you’ll want to do, too.

• Check the oil and tires.
• Make sure the car’s lights and other accessories are in good working order.
• Give the car a thorough cleaning inside and out.
• Gather your maintenance records — something that can give you an advantage over other sellers.

To help protect yourself, clear any personal data you may have stored in the vehicle’s entertainment system. When you connect your phone to your car, it may download phone contacts, digital content and garage door codes to your home and office. By clearing the information, you could help prevent your information from accidentally ending up in someone else’s hands.

3. Spread the word

Make sure you let friends and family know that you have a car for sale, and use the Internet to your advantage. In addition to posting your car for sale on social media sites like Facebook Marketplace and Craigslist, you can also pay for an advertisement listing with your local newspaper or sites like eBay Motors and Autotrader.com.

If you decide to buy an online ad, list your asking price and current mileage. To help car shoppers understand the condition of your vehicle, it may help to buy a vehicle history report from AutoCheck or Carfax as proof of the current condition. You may also find out if your vehicle is subject to certain recalls by running a search on the VIN at safercar.gov.

4. Show your car to potential car buyers

A potential buyer will likely want to take a look at the car in person and take a test drive before signing on the dotted line. Start by setting up a time to meet your prospective car buyer in a public place that you’re comfortable with — and ask who will be coming when you meet. Some police stations or sheriff’s offices have Internet-trading zones to increase everyone’s personal safety. You can always ask a friend or relative to accompany you for additional safety.

Serious buyers will also likely want to test drive the car. Before you hand over the keys, examine their driver’s license and take a photo on your phone, with the understanding you will delete it if they decide not to buy. Ride with them on the test drive and answer any questions they may have. Again, if it makes you feel more comfortable, have a friend or family member join you.

5. Complete the sale

Once you’ve found a buyer for your car, secure payment via cash or cashier’s check. A cashier’s check is different from a personal check because it is issued directly from a bank or credit union and is backed by bank funds. If your buyer wants to pay using a cashier’s check, it may be smart to meet at their bank to complete the transaction. Don’t hand over your car keys without first having the money in hand.

After you’ve been paid, you’ll need to transfer ownership of the car. Consider meeting with the new owner at the local Department of Motor Vehicles office to deal with the necessary paperwork, including the title transfer. That way, you’ll have easy access to any documents you might need to handle the transfer of ownership.

What paperwork do I need to sell my car privately?

Here’s a look at the documentation you’ll generally need to finalize the deal on a private car sale.

Vehicle title

• The title to your car must be in your name. Typically, the only way you can sell a vehicle that isn’t titled to you is if you’re a licensed dealer.
• If you have any money outstanding on the car from an auto loan, you will typically need to pay what you owe before completing the sale. In most states, if you owe money on your car loan, the title will show a lien holder (lender). Depending on where you live, you may need to pay the outstanding debt and get a lien release from the lender prior to the sale. If you can’t pay the remaining balance, your only option may be trading in a car with a loan to the dealership.
• In most states, if your vehicle was used in certain ways or suffered certain types of damage, you’ll need to get a title brand from the DMV. For instance, you may need a title brand, which is a permanent notation on the vehicle record that lets prospective buyers know about the car’s history. A title brand could also be necessary if the car you’re selling has been used as a taxi or as public transportation. It could also be necessary if the vehicle has been flood-damaged or salvaged and repaired. Failure to get a title brand prior to selling your car may result in a fine.

DMV paperwork

• In many situations, you’ll need to sign or transfer the car’s title to the new owner, provide a bill of sale or notice of transfer, a statement of the odometer reading, and a release of liability to the new owner. Typically, the buyer will need to pay sales tax and registration fees.
• Check with your state’s DMV to see what the procedure is in your state and what paperwork is required to complete the sale.

What’s next?

Once the sale is complete, be sure to photocopy and save the signed title and bill of sale. This will be your receipt and help establish that you no longer own the vehicle if the question ever comes up in the months or years ahead.

Also, take your license plates off the vehicle before you turn the car over to the buyer. This will help make sure you don’t get stuck with any tickets the new owner may incur after the sale.

And finally, you’ll need to inform your insurance company that you’ve sold the vehicle, so it may update your auto insurance policy. Your provider won’t automatically know that you’ve sold your vehicle, so it’s important to give notice — otherwise it might continue to bill you for a car that you no longer have.