What Paperwork Do I Need To Sell A Car?

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.

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.

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.

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:

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

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.

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.

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.

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.

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.

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.

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.