Selling your car yourself can command higher prices than selling it to a dealership for cash or trading it in, giving you extra cash toward your next vehicle. However, there are more boxes you need to check when you sell the car yourself, including a bit of paperwork.
If you’re wondering what paperwork you need to sell your car, you’re in the right place. In this post, you’ll learn about the essential documents you need to sell your car legally as a private seller and some helpful tips for a smooth and stress-free process.
Pre-Sale Preparation
You have to get a lot of ducks in a row when you’re selling a car, but having the right documents is the most important part of ensuring the process is legal. Many of these documents serve as proof of ownership transfer and protect both parties from disputes or liabilities.
For example, having the buyer sign a bill of sale and transfer the title ensures that you’re not on the hook for toll violations or accidents the new owner may get into after buying the car. Likewise, documentation ensures that the buyer legally owns the car and isn’t getting scammed with a stolen vehicle.
Essential Paperwork for Car Sellers
Selling a car privately can get you higher prices, but it comes with some extra work and a lot of time. Here is the essential paperwork you need to sell your car:
Vehicle Title
The vehicle title is the most important document for a vehicle sale because it proves ownership. In fact, trying to sell one without a title may be illegal in your state and can leave you vulnerable to legal trouble if the new owner gets traffic or toll violations.
The title should include details like the make, model, year, and vehicle identification number (VIN). If you still owe money on the vehicle, the lienholder may be listed on the title or may physically hold it until the loan is paid off. You will need to get the payoff amount and determine how to proceed with the sale.
Bill of Sale
In some states, the seller is required to present a bill of sale to the buyer to sell a vehicle. This often includes information like the VIN, a detailed description of the car, the date of the sale, and the purchase price. Both parties must sign the bill of sale when the vehicle is sold, but it doesn’t legally transfer vehicle ownership. It outlines the conditions of the sale and acts as a receipt and waiver of liability.
Release of Liability or Notice of Transfer
In some states, a notice of transfer or a notice of release of liability is a necessary document to inform the Department of Motor Vehicles (DMV) that ownership of the vehicle has changed. It must be filed with the DMV within five calendar days of the sale or transfer.
The notice of transfer typically includes the new owner’s name and address, the license plate number, the last five digits of the VIN, the vehicle odometer reading, and the vehicle’s make, model, and color.
Service Records
You should have your vehicle’s service records when you sell a car, especially if you’re selling it privately. Service records indicate that you’ve maintained your vehicle properly, which can improve its resale value. They may serve as negotiating power if the maintenance is under warranty.
If you have detailed maintenance records, such as receipts for major repairs or repairs after an accident, they should be included. Remove your name, address, phone number, or any other contact information from the records before giving them to the buyer.
Odometer Disclosure Statement
The odometer disclosure statement is a legal document that confirms the mileage of the vehicle’s odometer at the time of transfer from seller to buyer. It’s required by federal law in all 50 states and is usually necessary when vehicles are returned, purchased, or traded.
When you sell your car, you must disclose the current mileage to the buyer in writing on the odometer disclosure statement and sign it. The document should include your name, and the odometer reading in whole miles. You will need either a statement that the odometer reading reflects the actual mileage or a certification that the odometer reading is not the actual mileage with an acknowledgement of the discrepancy and the body style, year, model, VIN, last plate state, and last plate number.
Vehicles may be exempt from disclosure requirements if they are 20 years or older or have a gross vehicle weight rating of 16,000 pounds or higher. Model year 2011 or newer will only be exempt from disclosure requirements after 20 years.
Warranty Documents
If your vehicle is still under manufacturer warranty, the remaining warranty coverage can be transferred to the new owner at purchase. This can add value to the sale as well. Factory warranties that are tied to a vehicle’s VIN should automatically transfer, but you may need to take additional steps to transfer a third-party extended warranty. Contact the warranty company and understand the transfer steps – as well as any applicable fees – when it’s time to sell the car.
Additional Documents That May Be Required
Depending on the state you’re selling the car in and its condition, you may need additional documentation:
As-Is Documentation
An as-is document is crucial to protect yourself from future claims or liabilities related to the condition of the vehicle after the sale is finalized. The buyer has the right to have the vehicle inspected by a third-party inspector before the purchase.
As-is documents include language that indicates the car is being sold “as is” and that the seller makes no guarantees about its condition or any warranties. Any problems or issues are unknown, and the buyer will be responsible for any repairs.
There are only certain conditions in which you can sell a car as is. It must be under a specific price, a certain age or older, and meet required safety features that allow it to be legally operated after the sale or it must have paperwork stating that it is unsafe to operate in its current condition.
Smog Certification
A smog certification is a test that measures the level of pollution a vehicle’s tailpipe emits. This is required according to certain state programs, such as California’s Smog Check Program which identifies vehicles with excess emissions so they can be repaired or retired.
Sellers must provide a valid smog certification to the buyer when selling a vehicle that is four years old or older. Vehicles that are under four years old don’t require a smog certification, but the buyer will need to pay a smog transfer fee.
Vehicle History Report
While it’s not required, a vehicle history report uses a vehicle’s VIN to track the number of past owners, the total mileage, and the previous accident or repair history. Like service records, a vehicle history report shows a buyer that you were diligent with routine maintenance and repairs and that you’re not hiding anything about the vehicle’s history, such as flood damage.
State-Specific Documentation
Aside from essential documents like a vehicle title, some states may have unique requirements to sell a car. It’s important to check your local DMV to get a list of required documents and procedures to ensure you’re compliant when selling your car.
Preparing Your Vehicle for Sale
Selling your vehicle yourself means you have to do the legwork, including getting it presentable for buyers. First impressions matter, so here’s what you need to do to get it ready to sell:
Perform necessary repairs: You don’t have to fix everything, but getting minor repairs done can help you get a higher sale price. At a minimum, top off fluids, ensure all major components are operational, and replace burned-out lights. If there are issues you don’t want to repair, make sure to disclose them to prospective buyers.
Clean your vehicle: Cleaning your vehicle to put it on the market involves more than a quick wash. You can hire a professional detailer or do the work yourself, removing any trash and debris from the interior, vacuuming, washing the windows, cleaning the wheels and tires, and polishing the trim and paint.
Take good pictures: The images of your vehicle that show up in online listings play a huge role in whether a buyer contacts you. Right after detailing, take multiple pictures of the interior and exterior from multiple angles, including the cargo compartment or trunk, under the hood, and the wheels.
Completing the Sale
Once the meeting, negotiations, and inspection are complete, if a buyer is ready for purchase, you will need to finalize the paperwork to complete the sale. This includes:
Filling out the bill of sale with the buyer and include details like the sale price, date of sale, and vehicle information. Both parties need to sign and keep a copy for their records.
Signing the title over to the buyer. Fill out all necessary fields accurately, including the odometer reading and sale price.
Completing the odometer disclosure statement with the buyer, which verifies the accuracy of the odometer reading at the time of sale.
Submitting a release of liability form to your state’s DMV to notify them that you are no longer responsible for the vehicle.
Completing any additional forms as required by your state.
If your state requires it, notify the DMV of the sale, which may be done online or by mailing in a form.
Keep copies of all paperwork involved in the sale for your own records, including the bill of sale, the release of liability, and any other relevant documents.
After completing the sale, you must contact your insurance company to cancel your coverage on the vehicle. Provide them with the buyer’s information and the date of the sale. Also, some states require you to remove the license plates from your vehicle and return them to the DMV, while others require that the plates stay with the vehicle. Check with your local DMV.
Get Ready to Sell Your Car
A lot of work goes into selling your car, including cleaning it, making a listing, and getting all your paperwork in order. Now that you know what paperwork you need when selling your car, you can get it on the market.
If you need more advice on car selling processes or you want to transport a vehicle you’ve sold or purchased, Nexus Auto Transport can help. Contact us today!
