How to Sell a Car


how to sell a car

You’re likely to make more money if you sell your car yourself. If you sell to a dealer or do a dealer trade-in, the dealer has to have a little padding in order to make money when the car is sold again.

Motor vehicles are different than other owned properties. A state’s department of motor vehicle registration is involved in the process, with certain paperwork required (varies a bit by state). If you’re selling your car privately, you’ll be responsible for the paperwork. If you sell to a dealer or transfer ownership via a trade-in at the dealer, the dealer will handle the paperwork.

The Used Car Market in 2023

The used car market in 2022 was fabulous. In 2023, new car prices are predicted to go down by about 5%. Used car prices are expected to drop by 10 to 20%.

There are so many factors involved in pricing used cars. For example, you may think your gas guzzler truck will be a tough sale, but RV sales boomed during the pandemic times. People need a vehicle with enough horsepower to tow an RV.

On the other hand, as fuel prices rise, many people are looking for gas-sipping or hybrid vehicles. If your used vehicle is in good condition, you’ll find a buyer.

How Will You Sell Your Car?

Potential buyers don’t just haunt car dealerships. They use the internet to find the type of vehicle they want.

It’s up to you to decide how you want to sell your car.

Private Party Sale

The private party transaction takes place between you and another private party. You advertise the vehicle by various means, such as a newspaper advertisement or a private party sale website. You can even park it at your home with a For Sale sign on it, where potential buyers can see it.

Trading a Car

Trading in a car is a scripted sales process, with each step like a chess move. With most dealers, you get an offer on your current car, and you try to negotiate the best price on another used car or a new car. Some dealers advertise an instant cash offer which is a higher price, but may later downgrade the trade-in value.

How to Sell a Car Privately

There are a couple of very tricky elements to the private party sale, and one of those is the test drive. You’re going to allow a stranger to take a test drive using your vehicle. Later, we’ll give you some direction on how to handle that part of the deal with a potential buyer (see How to Sell a Car Safely, below).

1. Set a Price

Start with a car sale appraisal website, such as Kelley blue book (KBB). The KBB site will give you two values – one for a private sale and one for a trade-in. Then honestly list any defects the vehicle has – for example, a ripped bucket seat or a rear bumper dent. Leave yourself some wiggle room with the price, because any prospective buyer will want to negotiate down from your number. Check the pricing on similar cars. Price it right if you’re hoping for a quick sale.

2. Fix the car, or don’t Fix the Car

This is a price point issue. If you’re selling your car for a minimal amount of money, prospective buyers may be willing to overlook certain issues, as long as the car drives safely. In fact, an interested buyer could be a mechanic or someone who owns a used car dealership, with access to his or her own mechanic. However, a current inspection sticker is a huge selling point.

3. Get a Carfax Report

Buyers will want to know if your vehicle has ever been in an accident.

4. Gather your Service Records

When has the vehicle most recently gotten new brakes, tires, inspections, etc.?

5. Write a Description of the Vehicle

In your detailed description don’t forget to include key basic information such as the mileage, reason for selling your car, type of seating, and any special features such as a sunroof or tow package. Be honest about the car’s condition, especially if it is an old vehicle.

How to Sell a Car

6. Take Pictures of the Vehicle

Don’t be afraid to take pictures of the defects, if you’ve listed them. Remember, people are going to come to see your car sight unseen, and you may even attract an out-of-town buyer. They’ll feel more comfortable if they know what to expect.

7. Advertise

Where to advertise is an important decision. On some social media platforms, such as Facebook Marketplace, if you list your phone number you can expect to get responses from people who have no interest in buying a vehicle.

8. Choose When to Schedule Appointments

Try to have appointments for people to see the car and do a test drive during daylight hours. It may also be wise to arrange for the actual sale -transfer of funds and paperwork – to take place when a notary is available.

9. Get a Trade-in Price at a Dealership

You’ve already calculated your price. If you get a price from a dealership, you’ll also know the bottom number you’d get there. This is a good thing to know as you negotiate.

10. Be ready to Negotiate

Your asking price is a starting point. The new owner isn’t going to start there.

11. Clean the Car

If you want to sell a car quickly, have it looking its best. Scrape off the bumper stickers. You may even elect to have it professionally detailed (which can totally revamp an old car). Remove all personal items.

StepActionTips and Insights
Set a PriceDetermine a competitive asking priceUse car appraisal websites and local market research. Be prepared to negotiate.
Repair or NotAddress safety concernsPrioritize fixing safety issues. Cosmetic repairs may enhance appeal.
Get a Carfax ReportObtain a vehicle history reportProvide transparency and address any incidents or repairs reported.
Gather Service RecordsOrganize maintenance historyDemonstrate a well-maintained vehicle with recent service records.
Write a DescriptionCreate a detailed listingInclude essential details, be honest about the condition, and highlight features.
Take PicturesCapture high-quality photosShowcase the car's appearance, inside and out, including any defects.
AdvertiseChoose effective advertising platformsCraft compelling listings, respond promptly to inquiries, and schedule viewings.

How to Sell a Car

How to Sell a Car When You Still Have a Loan

If you still owe money on an auto loan, you won’t have the car’s title. Buyers want to get the title – that’s why advertisements for vehicles often say “title in hand.”

Still, the paperwork isn’t daunting, but it can be time-consuming. You have options:

1. Pay off the Vehicle

This is a good idea, especially if you don’t owe a lot of money. You may even take out a personal loan. Call your lender and get the actual payoff amount before seeking personal loans.

2. Sell the Vehicle Outright to a Dealer

The dealership will handle the car loan pay-off paperwork and get the vehicle title.

3. Contact your Auto Loan Lender

Find out what the actual payoff amount is. Also, find out how the lender would like to receive the money for the sale. The lender may dictate exactly what paperwork you need and even provide escrow services. Have the buyer follow the lender’s directions. The lender may even function as an escrow service, or intermediary, holding the cashier’s check from the buyer until the vehicle’s title is released.

OptionActionInsights and Tips
Pay off the VehicleConsider paying off the loan- Paying off the loan is ideal if you don't owe much. Contact your lender for the exact payoff amount.
- Explore options like a personal loan to clear the existing auto loan. Ensure affordability.
Sell the Vehicle Outright to a DealerSell the car to a dealership- Dealerships can handle the loan pay-off paperwork, simplifying the process for you.
- They will obtain the vehicle title, which can be attractive to buyers.
Contact your Auto Loan LenderCommunicate with your lender- Contact your auto loan lender to determine the exact loan payoff amount and process.
- Inquire about the preferred method for receiving the sale funds and any required paperwork.
- Some lenders may offer escrow services, ensuring a smooth transaction with the buyer.
- Follow the lender's instructions for the sa

How to Sell a Car

How to Sell Your Car Safely

Scammers are everywhere and they may not just be after your vehicle. They may be trying to find out when you’ll be home or at work, for example.

Here are some steps to take:

  • Before someone comes to your property, get a copy of the potential buyer’s driver’s license. Have the person text or email you an image of the license. Check to make sure the license is valid (up to date).
  • If you’re selling a high-dollar vehicle, you can ask for proof of funds, such as a credit report. A request for a credit report will deter tire kickers.
  • Contact your vehicle insurance company and ask for their input on handling test drives. The company may insist that you accompany them on the drive. Some companies may have a type of rider that allows you to place a temporary driver on your policy.
  • Do not let the buyer drive off with the vehicle with your license plate still on the vehicle. The plate stays with the seller because the license plate number is registered to the seller. The buyer will get a new plate.
  • In addition to yourself, you may have another family member go along on the test drive.
  • More about the test drive – have your route planned. You may even opt to do some of the test drive in an open place such as a church or school parking lot.
  • Be careful when answering questions to set up a viewing appointment. For example, don’t say things such as “I’ll be at work from 9 to 5, and no one would be home to show you the vehicle.” Instead, plan statements such as, “We’re a busy family and are showing the vehicle between 3 and 5 pm.”

How to Sell a Car

What Paperwork Do You Need to Sell a Car?

Here’s a quick list of documents you’ll need to sell your car:

Vehicle History Report

Such as Carfax.

Car Title

If you still have a loan on the car you’ll have extra steps to clear the title.

Service Records

Have as many records as possible, especially for major jobs.

Warranty Documents

Especially include information about any recalls that have occurred and the action you’ve taken. Most newer cars still have a drive-train warranty.

Owner’s Manual

This is not a must as most companies make the manual available online.

Bill of Sale

This should include the names of the seller and buyer, the date of the actual transfer and the sale price.

State-specific Paperwork

Check with your state Department of Motor Vehicles. For example, in some states, you can obtain a temporary tag (license plate) to be used as you sell the vehicle.

How Do You Transfer a Car Title?

You will sign off on the back of the title. The transfer can be done at a AAA office or at your department of motor vehicles, by a notary or at some dealerships.

What Is the Most Effective Way to Sell a Car?

It’s up to you. Private party sales will bring you the most money, but also take up more of your time. You’ll be fielding phone calls, texts and emails for a short time; meeting people for appointments; and riding along on test drives.

With a dealer trade-in, the paperwork is handled by them. And you may even find your next car there.

What Is the Best Website to Sell a Used Car?

Autotrader has been long established as a top place to buy or sell a car online.

Where Can You Sell Your Car for the Most Money?

The price of a used car has a cushion built in when it’s sold at a dealership. That’s because the dealer needs to make money on a future sale. The amount of that cushion depends on the price of the car, and the dealer’s knowledge about the likelihood of making money on it. Even if you’re going to sell the car privately, it doesn’t hurt to get a price from a dealer, who may present instant cash offers.

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Lisa Price Lisa Price is a staff writer for Small Business Trends and has been a member of the team for 4 years. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She is also a freelance writer and previously worked as a newspaper circulation district manager and radio station commercial writer. In 2019, Lisa received the (Pennsylvania) Keystone Award.