What Paperwork Does One Need to Sell a Car?

By Glenda Taylor

  • Overview

    What Paperwork Does One Need to Sell a Car?
    When you're ready to sell your car, you might receive a higher price if you market it yourself instead of trading it in on another car at a dealership. Once you find a buyer, you must take the legal steps to transfer ownership in a way that protects you and the buyer. In most states, this is a simple matter--but if you still owe money on the car, you must ensure that your debt liability is released before you hand over the keys.
  • Preliminaries

    Locate the title to the vehicle. If you are still making payments on the car, your title will include the name of the lien holder, along with your name. Once the car is paid off, the loan company will release the lien and you will receive a new title, in your name only. Occasionally, the loan company does not complete the necessary paperwork and you will not receive the clear title. In this case, contact the lending company and request that it send a lien release to your State Department of Vehicles.
  • Additional paperwork

    Although you can sell or trade your car in any manner you choose, supplying copies of pertinent information will make the deal smoother. The vehicle registration, receipts for maintenance and repairs, a list of replacement parts and a copy of any required safety checks (if applicable in your state) reduce the risk of the buyer coming back after the purchase with complaints.

  • Details

    Some buyers will want more information about the history of your car and will request a vehicle history report. Locate your car's Vehicle Identification Number (VIN), usually located on the front left dash, right by the window or on the inside of the driver's door. Your VIN will also appear on your title, your automobile insurance policy and any safety records. The buyer may enter the number into an online vehicle history database and find out detailed service records, repair records and an accident history. (See Resources.)
  • The Deal

    A bill of sale allows you to detail the terms of the transaction; most states require one. You can make your own, purchase a fill-in-the-blanks version at an office store or download a printable one from the Internet. Carefully record the odometer reading on the bill of sale just before you complete the transaction. (See Resources.)
  • Considerations

    When you are still making payments for the car, the deal becomes slightly more complicated. Contact the bank or lending company and ask it to designate a local bank that will act as an intermediary for the transaction. You and the buyer will meet at the bank; the buyer will pay the sales amount (usually by certified check) to the bank officer, who will then issue a payment to the financing company and another payment to you for the balance of the amount. The local bank will make copies of the paperwork, and you may then hand over the keys to the new owner.
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