What Paperwork Do I Need To Sell A Car?

Updated July 20, 2023
6 min read
Paper titled "Car Bill of Sale", pen, coins, dollars, keys, car

Introduction

There are countless reasons why individuals may decide to sell their motor vehicles. According to surveys, one of the most common reasons for selling cars in most states is a growing family need, from the arrival of a new baby to the addition of a furry friend. 

Some people sell a car to get extra cash to finance the purchase of their dream vehicle. Whatever the driving force, understanding the required paperwork when selling a car privately can ensure a smooth and quick process. In striving to sell a car, you're likely seeking a more profitable price than you'd get from a car dealer. 

To achieve this, you'll need to comply with state requirements and know all the necessary paperwork when selling a car privately. There are several documents that, while not mandated by your state, could expedite the process of selling your car. Here’s a simple insight into all the crucial documents needed to sell a car.

What Paperwork Do I Need To Sell My Car Privately?

When planning to sell a car, you'll need the certificate of title, and it's also advisable to have other essential documents at hand. For instance, some states also require an emissions test document.

Insight

Necessary papers to sell a car:

  • Certificate of title;
  • Bill of sale;
  • Service records;
  • The owner's manual;
  • Any warranty documents.
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Certificate of title

At the top of the "sell a car" paperwork list is a certificate of title. Your car title legally proves your ownership, clarifying key details such as the car’s model, make, year, and vehicle identification number (VIN). If your title has been lost, stolen, or damaged, don't worry, you can request a duplicate title. If you fully own the car without any unpaid debt, you’ll have what is known as a “clear vehicle title,” a guarantee that the car solely belongs to you. 

However, if you're yet to finish paying off your vehicle, the lienholder or financial institution will appear on your title until you clear your debt. You can sell a car with a lien but only transfer the title to the buyer after settling your debt in full and obtaining a lien release. When ready to sell, simply complete the “assignment of title by registered owner” section on the back of your title.

Bill of sale

Although not mandated in some states, it's prudent to have a bill of sale when deciding to sell a car. The bill of sale is a valid record of the transaction serving as an acknowledgment that the buyer accepts your used car as-is. 

The main car bill of sale components are the following:

  • Vehicle description: make, model, color, and year of the car

  • VIN (Vehicle Identification Number) code

  • Vehicle's odometer reading at the time of sale

  • Sale price

  • Names and addressees of buyer(s) and seller(s)

  • Date of sale

  • Signatures of both buyer(s) and seller(s)

Consider using this car bill of sale template from Lawrina, a trusted template provider.

Service records

Service records, though not required in most states, act as the vehicle's history to your potential buyers. These records vary from detailed car inspections to tire rotations. They show that you have diligently maintained your car and reassure the new owner.

Owner's manual

In striving to sell a car, an owner's manual can prove quite useful. Although not legally required, it could be a deciding factor for some buyers. Most manuals are available online as free downloadable PDF files in case you misplaced the original.

Warranty documents

If your car's warranty is transferable, the vehicle can attract more potential buyers, thus making it easier for you to sell a car. A transferable warranty can not only add value to your sale but also justify your asking price.

Emissions test documentation

Some states mandate a periodic emissions test when you decide to sell a car. Ensure yours is up to date before initiating the sale, as most buyers would prefer a car with updated emissions test documentation.

Payment agreement

In addition to those mentioned points, another important aspect to consider when selling your car is formulating a payment agreement with your buyer. This helps ensure you get paid accurately and on time. 

The payment agreement should clearly state the full price of the car, the way the payment will be made (cash, bank transfer, check, etc.), the date of payment, and any potential implications of late payment or non-payment. 

In some U.S. states like New York, it is strongly recommended that large transactions such as car sales should not be done with cash but a safer form of payment like a cashier's check. Having a clear payment agreement can safeguard you against potential financial disputes or fraud.

Transfer of insurance

When selling your car, another critical point to consider is the transfer of insurance. When you sell a car, your insurance doesn't automatically transfer to the new owner. In most states in the U.S., the car insurance is attached to the owner rather than the car, the insurance policy typically covers the vehicle's owner, not the vehicle itself. 

So when you do sell your car, you'll need to cancel your car insurance policy, or if you've bought a new car, you can transfer the policy to the new vehicle. Conversely, it's crucial to inform the buyer that they need to secure their own auto insurance for the vehicle, as driving without insurance can lead to hefty fines and potential legal troubles.

However, the exact process can vary from state to state and between insurers, so it's advisable to reach out to your insurance company to know the exact steps you need to follow. This not only protects the buyer but it also ensures you're not liable for any incidents that may occur after the sale.

Conclusion

Selling your car privately is an excellent means to earn some money, though it might require considerable effort and is often unpredictable. A surefire way to stay on top of your sell a car venture is to ensure you have all necessary paperwork before making any sales.

Article by
Yevheniia Savchenko
Lawrina

Yevheniia Savchenko is a Product Content Manager at Lawrina. Yevheniia creates user interface copies for Lawrina products, writes release notes, and helps customers get the best user experience from all Lawrina products. Also, Yevheniia is in charge of creating helpful content on legal template pages (Lawrina Templates) and up-to-date information on US law (Lawrina Guides). In her spare time, Yevheniia takes up swimming, travels, and goes for a walk in her home city.

If you have any questions or suggestions regarding the product or UX content for Lawrina, feel free to contact Yevheniia directly at y.savchenko@lawrina.org or connect with her on LinkedIn.

Frequently Asked Questions

What paperwork do I need if I have a lien on my car?

If you have a lien on your car, but you still intend to sell it, you must first pay off the lien. The lien is attached to the vehicle's title as a result of a car loan. Owning a vehicle with a lien shows that you do not have full ownership rights to the car. In the U.S., creditors or lien-holders have a legal claim on the vehicle until the debt is paid off. 

 

After paying off the lien, the lender will send you a notice of lien release. Once you have obtained a lien release, you can proceed to sell the car. 

 

In many U.S states, such as California, a lender is required by law to send you a notice of lien release within a specified number of days (usually 30) after you have paid your debt in full. Therefore, once you pay off the lien and obtain a lien release, you can transfer the title and proceed with selling your car.

What do I need to sell my car?

In order to sell a car, one of the first steps would be getting an in-person appraisal of your car before you decide an asking price. This process helps you understand the actual market value of your car. An appraisal can be conducted by visiting a local dealership, a professional appraiser, or by utilizing online resources. 

 

The Kelley Blue Book (KBB) valuation, for example, is widely accepted across the U.S to obtain a fair price estimate. Apart from the appraisal, a thorough inspection of the vehicle would be beneficial to uncover any unseen mechanical or cosmetic issues that may affect its value. Mechanic inspection records can be a selling point as they indicate your commitment to maintaining the car's condition.

What is a liability form?

A release of liability form, commonly used when you sell a car, protects you from being held responsible for any ensuing accidents or violations that occur after the car has been sold but is yet to be transferred to the new owner's name. This form, available from your state's Department of Motor Vehicles (DMV), should be filled out by the buyer immediately after the test drive and before the final sale. 

 

As an example, in the state of California, the Notice of Transfer and Release of Liability (NRL) needs to be submitted to the DMV within 5 days from the date of sale. Therefore, a release of liability form is crucial to protect your interests after selling a car.