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How to Sell a Car

How to Sell a Car

Tired of having a car payment? Selling so you can upgrade to some new wheels within your budget? Whether you’re kicking debt to the curb or you’re just ready to upgrade to a car that doesn’t have a cassette player in it, we’ve got you covered!

The thought of selling a car can be kind of intimidating. But it doesn’t have to be! Here’s how to sell your car and get a great deal faster than you can say “test drive.”

Selling a Car:

  1. Set Your Asking Price
  2. Gather All the Necessary Paperwork
  3. Give Your Car a Makeover
  4. Advertise Your Car
  5. Prepare to Meet Buyers
  6. The Test Drive and Car Inspection
  7. Negotiating the Price
  8. Seal the Deal

Selling a car? We'll walk you through the entire car selling process! Download our free Car Guide today!

Selling a Car

Why should you sell your car in the first place? Oh, we can think of a few reasons—530 of them, to be exact. That’s right. The average monthly payment for a new car is $530 (and it’s almost $400 per month for a used car).(1) That’s insane! Imagine what you could do if you had an extra $530 every month. Don’t let a car payment put a choke hold on your ability to build wealth!

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If you’re selling a car in order to upgrade to a newer one, be sure to nail down your budget early and take a good look at the used car market to get the most bang for your buck.  

Ready to get started? Okay, let’s go!

Step 1: Set Your Asking Price

Just how much is the ol’ Silver Bullet worth? Getting an estimate for your car up front will keep you from shooting in the dark when you officially set your asking price. 

There are several ways to find out the value:

  • Ask the experts. Online sites like Kelley Blue Book (KBB) or NADA Guides can help you see what your car is worth in a matter of minutes. If you’ve been having problems with your car and you can’t decide if you should fix it or sell it, these sites can help you figure out what makes sense.

  • Compare similar listings. Find out what other sellers are asking for cars similar to yours. 

When you set your price, be sure to leave wiggle room for negotiation. So if your car’s market value is $8,400, you might want to price it a little higher—maybe around $8,900. Then if a buyer makes a lower offer, you have room to counter. 

Step 2: Gather All the Necessary Paperwork

Okay, before a buyer will show you the money, you’re going to have to show them the paperwork. It’s time to go on a scavenger hunt! 

Here are the most important documents you’ll need to sell your car:  

1. Title

The title is the legal document that shows you own the car. If you bought your current car with cash, that’s awesome! You should already have the title. Once you’ve completed the sale, you just sign over the title to the new owner.  

But if you took out a car loan or a car fleece—er, lease—and you still owe money on it, then you don’t own your car. Your lender does. That means your lender, whether it’s a bank or car dealer, has the title and you’ll have to work with them to make sure the title transfer to the new owner goes smoothly. 

2. Bill of sale 

Think of a bill of sale form as a receipt for the car sale—it’s proof you sold the vehicle and it includes information about the car and everyone involved in the transaction. 

The bill of sale will show:

  • Vehicle type and information (make, model, year and vehicle identification number)
  • Information about the buyer and seller (names, addresses and signatures)
  • Purchase price and sale date 

You can find a bill of sale form online or at your local DMV office.(2)

3. Notice of transfer and release of liability

After you’ve sold your car, you’ll need to tell your state’s DMV. Why? Because if the new owner gets into an accident or runs a red light and the car is still registered under your name, you might end up getting the bill. Just ask your DMV for a notice of transfer form! 

4. Vehicle history report

Buyers are going to want to know everything about your car before they buy it. The vehicle history report (VHR) will tell them what they’ll need to know, including the car’s accident history and repair records. 

5. Warranty documents

Is your car still under warranty? That warranty is usually transferrable when you sell your car.

6. As-is documentation

If your car isn’t under warranty, you’ll want to make it crystal clear the new owner is responsible for any repairs and damage once the car is sold. 

Step 3: Give Your Car a Makeover 

Let’s be real: Nobody wants to see crumpled fast food wrappers on the passenger seat when they come to see your car for the first time. 

Simply put, clean cars lead to better offers. Here are a few things you can do to your car before inviting buyers to see it: 

  • Give the exterior a good wash and wax.
  • Vacuum the floor and seats.
  • Clear out all personal items and empty the trunk. 
  • Clean the rims and tires.
  • Fix any other small issues (like broken headlights and fluid levels).

Don’t want to do it yourself? A good car detailing will help make your car look, smell and feel as good as new and it’ll probably cost you anywhere between $100 and $300.(3)

Step 4: Advertise Your Car

Okay, here are some good rules of thumb to help you create an ad that will have car shoppers calling in no time: 

  1. Take lots of good pictures. Seeing is believing, so make sure your ad includes plenty of great photos of your car! You should have multiple shots from every angle—the front, the back and both sides inside and out. Most smartphones have cameras that are better than some digital cameras, so there’s no excuse for blurry photos! 

  2. Create a detailed description of the car. The more information you put in your ad, the better. Highlight as many positives about your car as you can, but also be honest about any significant flaws—they’ll probably show up in a vehicle history report anyway. Here are some of the basics to include in your listing:

    • Asking price
    • Current mileage
    • Recent repairs, upgrades or modifications
    • Accident history and mechanical problems
    • Number of previous owners
  1. Pick places to advertise your car. There are plenty of free (or almost free) ways to let folks know your car is on the market. Consider using online sites like eBay Motors,, Autotrader, Craigslist or Facebook Marketplace to post your listing. Depending on where you live and work, you could go old school and put a “For Sale” sign in one of your car’s windows or hang a flyer in your office breakroom. The more places you advertise, the more potential buyers you’ll attract!   

Step 5: Prepare to Meet Buyers

Now that you’ve shouted from every hilltop that you’re selling your car, prepare to get bombarded with calls, text messages and emails from would-be buyers. 

Once the responses start to pour in, you’ll need to screen those buyers and pick the ones that mean business. You don’t want to waste your time on some goober who hasn’t even thought about how they’re going to pay for a car!  

You also need to think through ways to protect yourself from fraud, theft or physical harm. When you’re selling something worth thousands of dollars, you may be surprised by how many nutcases pop up. 

So how do you separate serious buyers from those just kicking the tires?

  • Get them on the phone. Pick several buyers that stand out from the rest and give them a call. It’s one thing to trade messages over email, but you get a better feel for a buyer’s motives and seriousness with a five-minute conversation on the phone. 

  • Ask for their full name. If they aren’t willing to give you their full name, that’s a huge red flag. Move along! 

  • Agree on acceptable forms of payment. Ask them how they’re planning to pay for the car. When it comes to selling a vehicle, cash is king! There’s nothing safer than accepting cold, hard cash for your car since you won’t have to worry about a bad check or counterfeit money order bouncing on you. A verified check also works, but make sure you don’t transfer your car’s title until the money clears into your account. 

  • Sell local. Look, selling a car is complicated enough. You really don’t need the hassle of trying to arrange a long-distance sale with someone who doesn’t even live in your state unless you already know them. Thanks, but no thanks.

Step 6: The Test Drive and Car Inspection

All right, so you have a buyer who’s ready to check out your car and take it for a spin. Remember: Car buyers aren’t just sizing up your car during the test drive—they’re sizing up you, too. So be friendly, be honest, and make sure you know what you’re talking about. 

Following these general guidelines will help your test drive run smoothly: 

  • Agree on a neutral meeting place. Giving your home address to a bunch of strangers? Bad idea. For your own safety, meet potential buyers during the daytime at a safe public place—maybe a shopping mall parking lot. If you can find a spot near a test drive route with light traffic, that’s even better. 

  • Bring a friend or family member. Again, safety is really important. If absolutely no one can go to the test drive with you, at least tell someone where you’ll be and ask them to check in. 

  • Make your pitch. This might be your last chance to remind potential buyers about your car’s benefits, so don’t just mumble a greeting and give them the keys! You don’t want to overdo it but, by the end of the test drive, you want them to be excited about the idea of buying your car. Here are some great benefits to highlight (if they apply to your car):
    • Good fuel economy
    • Low mileage 
    • Safety features (blind spot detection, backup cameras, etc.)
    • No accident history
    • Technology features 

Buyers are going to have questions, so come prepared. Don’t know an answer? Let them know you’ll try to find it and get back to them.  

If a buyer really likes your car, they may also want to have a mechanic inspect it. That’s a reasonable request! Once you agree on a mechanic, pick a date and time to meet them for a full inspection or diagnostic check. Tip: The buyer typically foots the bill for an inspection. 

Step 7: Negotiating the Price

Okay, you could see the excitement in the eyes of the buyer as they got out of the driver’s seat. Chances are they might be ready to make you an offer!  

Like we said earlier, you should have set an asking price that’s a little higher than your car’s current market value to leave yourself some room to negotiate. You should also have a lowest acceptable price in mind. If your buyer won’t make an offer that hits that number, be prepared to walk away.   

Or is it a “take it or leave it” asking price? Whatever the case, you need to clearly communicate that to your buyer.

And one more thing: Never accept a down payment for a car or agree to let a buyer pay in monthly installments. If you’ve signed the title away and they stop making payments to you, there’s nothing you can do about it. That car is no longer yours. Remember: Debt is dumb.

Step 8: Seal the Deal 

You made it! Now you’re ready to finalize the paperwork and exchange the keys for the cash. To finalize the paperwork: 

  • Complete the bill of sale. If the car is sold “as is,” then the bill of sale should show that. You and the buyer will both sign, date the document, and keep a copy for your records. 

  • Sign over the title. Once you and the buyer complete and sign the title transfer, you’ll hand over the title to the new owner.

  • Fill out the release of liability form. Depending on the state you live in, you might need to turn in this form to your local DMV. 

  • Hand over the keys. Accept the payment from the buyer and that’s it. Congratulations! 

After the Sale

There’s just one last thing you need to do: Remove the car from your auto insurance policy. 

If you’re buying another car to replace the one you just sold, this is actually a great time to take a fresh look at your car insurance needs and shop around for the best rates. 

To help you find the right coverage at the best price, we recommend working with one of our Endorsed Local Providers (ELPs). These independent professionals work with insurance companies to make sure you and your family have the coverage you need to protect you and your car. Find your ELP today!

Get a FREE Customized Plan for Your Money!

Get a FREE Customized Plan for Your Money! 

Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
Take the Assessment

Get a FREE Customized Plan for Your Money! 

Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
Take the Free Assessment