While it is of course easier to take a car into a dealer and have them sell it for you, they essentially charge you for this service by giving you less in a trade-in than your car is actually worth. When you consider they will charge you more to buy a car than that car is actually worth, you can end up paying several thousand dollars just to trade a car in at a dealership for a new car. You can narrow this gap by buying a car at a dealership and selling your own car yourself. Here are 5 steps to help you protect yourself when selling your car.
1. Have your car inspected by a mechanic prior to selling
While anyone that plans on buying your car should have it inspected by a mechanic, that doesn't mean they will. Before you sell your car, you should know if there are any major mechanical issues with your car. If there are, you can either have them fixed or list the car as being sold "as is." Selling your car "as is" protects you from any liability if the new owner discovers any issues with the car after purchasing it.
2. Before setting a price, do your research
People are often tempted to try and sell their car for what they owe on it or something close to what they paid for it. Keep in mind, however, that if you purchased your car at a dealership, you paid more for it than the car is actually worth. In addition, if you bought your car with financing, then you also paid additional money in interest. The value of your car will also be affected by how well you maintained it and what upgrades you may have done to it, but not all upgrades will necessarily increase the value of your car. Some may actually make it worth less. There are a number of places online such as What Is My Car Worth? that can help you set a fair and reasonable sales price for your car.
3. If you owe money on your car, meet at the bank, otherwise meet in a public place
When it comes time to meet the buyer, whether its to allow them to take the car on a test drive, have it inspected by a mechanic or conduct the actual sale itself, always meet at a public place. In addition, it is important to meet the buyer in person. While making arrangements online can broaden your pool of potential buyers, it can also significantly increase your risks of being swindled. If you still owe money on the car, you can call your bank ahead of time and have them prepare a title. You can meet the buyer at the bank, pay off what you owe on the car and then sign the title over to the buyer. If you own the car free and clear, you can sign the title to the buyer.
4. Check to see what happens to the plates and always fill out a bill of sale
In some states, the license plates will transfer to the new owner while in others the previous owner will keep the plates. You always want to fill out a bill of sale including the odometer reading and the time of the sale. This is so that if the new owner drives away and gets in an accident, you will be free from liability.
5. Only accept cash
There are a number of ways today to transfer funds digitally, but there are also a number of ways to make it appear as if money has been transferred when it actually hasn't. In many cases, transferring money digitally is much like writing a check. A person can transfer you money through an online service, the service will check with the bank to ensure the funds are there, but they don't actually transfer for a few days. By the time the transfer actually happens, the money may be long gone. Even cashier's checks are increasingly being forged, so the only safe, reliable way to transfer money is in cash. Cash also has some risks, but there are still safe ways to transfer cash that should be satisfactory to both parties.