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How to sell your car

Culturally, we build a lot of sentimentality around our first car purchases, and for good reason—it's a big deal. But selling a car, despite receiving comparably little attention, is arguably just as momentous and fraught. When it comes time to sell your car, it's important to take all relevant factors into consideration. Here's what you need to know.

Fortunately, people looking to sell cars now have more options than ever before. If you're looking to sell your car, your primary options are to do so privately, online, to a junkyard or to a dealer.

How to sell your car privately

To sell your car privately, first make sure all of your documentation is in order: Your ID, the title, vehicle history report and any maintenance records. Then you need to list it (usually in local newspapers), providing basic information like the year, make, model and mileage, as well as any significant cosmetic or mechanical problems. As for pricing, a good vehicle history report taking the vehicle's condition into account should provide a fair market value for what you can expect to get both privately and as a trade-in.

There are many advantages to selling privately. You avoid the high-pressure environment of a dealer showroom, and you can often get more for the car because the buyer is a person in need of a car, not a dealer looking to make money on it. On the other hand, you have to do all the work yourself, and there are some scams to watch out for.

How to sell your used car online

Selling your used car online is just another way of selling your car privately, with the added advantage of reaching more potential buyers than a local classified ad ever could. Like a private sale, you'll need to gather your documents, create a listing and find a buyer. Some sellers find it more convenient and less intimidating to conduct negotiations online versus in person, which is a perk of online selling. Selling online often also offers an added layer of security, as many online car marketplaces will verify payment before finalizing a sale.

One downside to online sales is that sites will often charge a fee for the listing, or a percentage of the sale. This covers the services they provide, but it still means you come out with less money in the end. It can also be hard to stand out in an online marketplace, as your listing is competing with others from all over the area, not just your locality.

How to sell your junk car

If your car is no longer operable and not worth repairing, a junkyard can be a great option. The paperwork requirements tend to be a little less strict; some states will allow you to junk a car without a title, though others won't. Assuming you have the needed documentation, selling a junk car can be as simple as calling local junkyards and getting price quotes. Often, they'll come pick up the car and haul it away free of charge and pay you cash on the spot.

Another way to get rid of a junk car is to sell off individual parts. In this case there's no paperwork required, you simply remove the part, clean it and sell it to either a junkyard or a private buyer. If you're not mechanically inclined, another option is to advertise that the car is being parted out, and invite DIYers to harvest the parts they want. In either case, you'll have to do some research to determine fair value for the individual parts. Searching for similar parts on eBay is a good place to start.

How to sell your car to the dealer

We think of dealers as places to buy cars, but the used cars they sell have to come from somewhere. Just like a private sale, come prepared with the title, your ID, maintenance records and a solid understanding of the market value of the car. Your best bet is an independent used car dealer rather than one affiliated with a manufacturer, unless your car was made by that manufacturer. The dealer will inspect the car and make you a cash offer on the spot. They'll also take care of transferring the title over with the DMV.

What you need to sell your car

In many cases, selling your car is simpler than buying one. In terms of what you need, it really boils down to the proper documentation, clear ownership of the car and other miscellaneous items.

Documents

The most important document for selling a car is the title. The title is a record of who owns the car kept on file with the DMV. When you can definitively prove that you own the car, there are few barriers to selling it. Along with the title, you'll want a government-issued ID that assures buyers that the name on the title is yours.

Other documents that aren't required (but are nonetheless nice to have) include maintenance records and a vehicle history report. Maintenance records give buyers confidence that the car has been well cared for, while the vehicle history report can (among other things) assure them that the car hasn't been in an undisclosed accident.

Can you sell your car without a title?

Generally, no. Titles are proof of ownership, and it's hard to legally sell a big ticket item like a car without it. Some states allow junkyards to buy cars without titles, and in some states the DMV may issue the buyer a title if they can produce a detailed bill of sale. But in most cases, the easiest solution is to simply ask the DMV for a replacement title. If you own the car in question, it's as simple as filling out a form and paying a small fee.

Full ownership

While it's not impossible to sell a financed car, it's a much bigger headache than if you own it outright. The loan will have to be repaid in full in order to transfer ownership. Given that cars depreciate rapidly from the day they're sold, there's a chance its market value is lower than the amount you owe, and you would be on the hook to pay the difference. A financed car also means the lender, not you, is in possession of the title.

Other odds and ends

Do you have all the keys and fobs that came with the vehicle? Is the owner's manual in the glove box? If the car came with a spare tire, is it inflated and in good condition, along with any tire changing kits? Is the car up to date on inspections and emissions tests? Are the oil and fluids fresh? None of these outright prevent you from selling a car, per se, though making sure all the boxes are checked makes you appear more responsible as a seller and avoids hassle for your buyer.

How to avoid scams when selling a car

The good news is that sellers have less to worry about than buyers when it comes to scams. You are in possession of the car, after all. Provided you can verify the payment method, there aren't really many avenues for scammers. Your greatest risks, to the extent that there are any, come when selling privately.

How to protect yourself when selling a car privately

If you're going to get scammed, this is when it's most likely to happen. Again, it's difficult to successfully scam a seller, and next to impossible if you take the following precautions.

Make copies of everyone's ID

It's a good idea to ask the buyer for a printed copy of their ID, and they may ask the same of you. In your case, were the buyer to do something such as abscond with your car during the test drive, you have a printed record with their name, address and likeness that you can provide to law enforcement.

Full ownership

Payment is your biggest risk of getting scammed, but aside from counterfeiting, there's no way to be scammed when the buyer hands over cash. If they don't have enough cash and need financing, use an escrow service to park the funds and withhold the vehicle until the money is secured. The biggest scam risk when selling a car is a check that bounces.

Make inspections pre-sale

Another potential scam, one that comes after the sale, is angry correspondence from the buyer claiming their mechanic looked at the car and found all sorts of costly problems. Depending on where you live, there's a chance they may be able to take you to court and hold you responsible for the "damages." Buyers are entitled to their own inspection (it's a good idea, in fact), but you should stipulate that they happen before a deal is closed and in your presence.

Hold onto the title until the end

Signing over the title should be the very last thing you do. After a deal is reached, after any inspections occur and after the money changes hands. If you sign it over at any earlier point, they become the rightful owner of the car and untangling any problems will be time consuming and potentially costly.

Follow common safety advice

Selling a car to a stranger in person carries the same risks as selling anything else. Always meet in a public place during daylight hours. Bring someone else with you if possible, and tell others where you'll be and how long you'll expect to be there. The keys should stay in your possession until the deal is closed, except during the test drive.

As for whether to accompany them on the test drive, use your judgement. Riding along may deter theft, but if the person has decided they're driving away with the car no matter what, it would be best if you weren't in the car. If you do choose to go along, take the extra step of sending a digital copy of the buyer's ID to someone you trust.