How to Sell Your Car - Bill of Sale and Other Important Issues
There are several very helpful things to keep in mind and legal issues to consider if you need to sell your car. Here are some guidelines and helpful tips to make the process as easy and painless as possible:
Get informed. Before selling your car, do some initial research. Laws vary from state to state. Check your state's DMV website for specific laws and regulations.
Know your vehicle. Before you put your car on the market, be sure to note important information such as the car's Vehicle Identification Number (VIN), make and model, condition, mileage, color, maintenance history records, and any options or added special features that could attract buyers.
Know your market. What type of buyer might be interested in your car? Are you selling a sleek sports car or a family-friendly minivan? What types of cars are in demand in your area? Target your advertising by lifestyle, geography and demographics.
Set your price. When setting your price, look at local advertising to see what similar cars are selling for. In general, you'll do better by selling the car yourself versus trading it in at a dealership. Check the fair price for your car depending on its condition and whether or not you are selling it as a private party or trading in. Kelly Blue Book is a good source for this information.
Prepare your vehicle. Give the interior and exterior of your car a thorough inspection and cleaning to give it the best possible appearance. It probably isn't worth fixing major problems but you should repair minor dents, scrapes and cosmetic defects if possible. Also, have the maintenance records ready to show potential buyers.
Advertise. Post ads online, in local newspapers and magazines, and put "For Sale" signs in the car windows. Be honest and accurately communicate information about the car including any significant necessary repairs. However, you also want to include as much "sizzle" or marketing oriented language in your ads as possible.
Closing the deal. When meeting with the potential buyer, bring the necessary paperwork (e.g., pink slip) as well as maintenance records and warranty information (if applicable). Remember that requirements vary by state, so be sure to consult your state's DMV website for the specific requirements.
Car Bill of Sale. While not required in all states, a Car Bill of Sale is a good idea because it documents the terms and conditions of the sale in writing. It includes the agreed upon purchase price, VIN, vehicle model and year, warranty and odometer information, signed legal names and addresses of the seller, buyer and sometimes a notary. The Car Bill of Sale document represents the transfer of the RIGHT to ownership; the vehicle's certificate of title represents ACTUAL ownership. Thus, this document and a certificate of title are needed to complete the transfer of the vehicle.
Title Transfer. A federal law now requires that the seller must provide the vehicle title (i.e., "pink slip") and some form of odometer disclosure listing the vehicle's current mileage at the time of the sale in every state. The title transfer usually involves signing and dating the back. The buyer then needs to go to their local DMV and apply for a title in his or her name
Warranty Transfer. If applicable, make sure to transfer the vehicle warranty. This ensures that the buyer acknowledges and understands that he or she is accepting the future responsibility for vehicle maintenance and repair.
Insurance cancellation. Don't forget to contact your insurance company and cancel your insurance policy or change it to your new vehicle once the sale is complete.
By Juliana Olsson and the Rocket Lawyer legal team. Juliana Olsson is a writer and podcaster for Rocket Lawyer, Inc. (www.rocketlawyer.com). Rocket Lawyer provides a free service that allows users to personalize their own legal documents (e.g., car bill of sale), that can then be securely shared, e-signed, and reviewed by real attorneys.
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