How to Sell a Car

Selling a car can be intimidating. But it doesn’t have to be when you know what to expect.

We’re breaking down every step of how to sell a car—from gathering the right documents and advertising your car to meeting up with buyers and negotiating the best price. Follow these tips and you’ll be ready to safely and successfully sell your car!

How to Sell a Car in 9 Steps

1. Decide the best way to sell your car.
2. Gather the necessary documents.
3. Get your car ready to sell.
4. Choose the right asking price.
5. Advertise your car the right way.
6. Screen potential buyers.
7. Meet up for a test drive and an inspection.
8. Negotiate the price.
9. Seal the deal with payment and paperwork.

There are a couple of different ways to sell a used car: privately or through a dealer. Both have pros and cons, but the best way to sell a car depends on what’s most important to you. Selling a car privately will usually get you the most money, but selling to a dealership can be faster and less hassle.

Pros of a Private Sale

• You get more money for your car.
• You can negotiate the price and accept the highest offer.
• It’s usually easier to sell a car with higher mileage.
• There are no overhead costs.

Pros of Selling to a Dealer

• It’s usually faster (you don’t have to advertise and wait for buyers).
• You don’t have to negotiate (unless you want to).
• The paperwork is handled for you.
• It can be safer.

A lot of online dealerships, like CarMax and Carvana, will give you an instant cash offer for your car. While this is super quick and convenient, the offer is usually way lower than what you could get with a private sale.

And sometimes, the cash offer is only good if you trade in your car for another car loan—which, if you want to actually turn a profit on your car, you should steer clear of!

When selling a car, it’s important to have all your ducks in a row. And by ducks, we mean paperwork. Here are some documents you’ll need to sell your car:

• Car title: The title is the legal document that shows who owns the car. You should already have the title if you bought your car outright or if you’ve paid off your car loan. But if you currently have a loan on your car, then you won’t be able to get the title until after you sell the car (more on that later).
• Vehicle history report: The vehicle history report (VHR) tells potential buyers what they need to know about the car, including the accident history and repair records.
• Service records: You want to show that you’ve taken good care of your car (or at least be honest about the current state of it). So contact your regular mechanic or service center to get a summarized statement of your visits and what work has been done on your car.
• Warranty documents: Is your car still under warranty? It’s usually transferrable to the new owner—which could be a good selling point.

Is there a large crack in the windshield? A loud clattering sound when you put the car in park? A door handle that sticks? These things can be red flags to potential buyers.

You may not want to put any money into your car before you sell it, but some fixes can help you get a lot more for it. So get an estimate for repairs and decide if you want to fix any major issues before you list the car—or if you want to just sell it as is.

You also want to give your car a mini-makeover before you take pictures or invite buyers to come look at it in person. Because let’s be real: Nobody wants to see crumpled fast-food wrappers or dog hair on the passenger seat. 

Simply put, clean cars lead to better offers. A good car detailing can help make your car look, smell and feel as good as new. Just know a standard detailing job will probably cost you anywhere between $200 and $350.¹ Or you can do it yourself!

Get Your Car’s Exterior Ready to Sell

• Remove any stickers or magnets.
• Buff out any scratches.
• Make sure the headlights and taillights are working.
• Fix windshield cracks. (Depending on your car insurance coverage, this might be free to fix.)
• Inspect the tires and rims.
• Give the exterior a good wash and wax.

Get Your Car’s Interior Ready to Sell

• Clear out all personal items and empty the trunk. (Don’t forget to check the CD player and seat-back pockets.)
• Vacuum the floor and seats.
• Try to get rid of any stains or odors.
• Wipe down the dashboard, mirrors and other surfaces.

If you’re selling a car privately or you plan on negotiating with a dealer, you need to set a reasonable asking price for your car.

Just how much is the ol’ Silver Bullet worth? You might think it’s a priceless treasure, but the value of your car really depends on the current market and your car’s condition. While you don’t want to undersell your car, you also don’t want to turn buyers away with a ridiculous asking price.

How to Figure Out Your Car’s Value

• Use online valuing tools. Sites like Kelley Blue Book (KBB) or Edmunds will give you an estimate of what your car is worth in a matter of minutes—for both private sale and instant cash offer.
• Compare similar listings. Check out what other sellers are asking for cars similar to yours, especially in your area.
• Consult a mechanic. A mechanic can point out any major issues with your car and give you an estimate for repair costs—which will help you know how to adjust the asking price.

When you set your price, be sure to leave some 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.

You might have a good car on your hands. But if you want to sell it yourself, you’ve got to get the word out! You need to create a car ad that will reach the most people and stand out in the sea of used cars. The more information you put in your ad, the better.

What to Include When Advertising Your Car

• Basic description: Start by stating the main aspects of your car, including the make, model, year, current mileage, number of owners and asking price.
• Selling points: Does it have low mileage? Heated seats? New tires? Highlight the key things that may interest potential buyers.
• Why you’re selling it: People want to know why you’re getting rid of your car, so just go ahead and tell them.
• Current condition: Mention any recent improvements you’ve made to the car, but also be up-front about any significant flaws. You can even list the vehicle identification number (VIN) if you want to show you have nothing to hide. (Any issues will show up during the inspection anyway.)
• Price terms and acceptable payment: Your price can be firm or negotiable, or you can just say “best offer.” But whatever you decide, make it clear. It’s also a good idea to include how you want to receive payment—cash, certified check, Venmo, etc.
• Lots of good pictures: Make sure to get multiple shots of the front, back and both sides, as well as inside the car. Again, be honest here—you may be tempted to leave that large dent out of your ad, but any potential buyers will definitely see it when they come look at the car in person.

Best Places to Sell Your Car

The more places you advertise, the more potential buyers you’ll get. And while you could attract more people in an online posting, don’t underestimate the power of old-school advertising!

Car Sale Sites:

• Cars.com (free)
• Autotrader ($49)²
• eBay Motors ($19–79)³
• Craigslist ($5)⁴
• Facebook Marketplace (free)

Other Advertising Ideas:

• Share on work messaging platforms like Microsoft Teams or Slack.
• Post on your personal social media.
• Put a For Sale sign in one of your car windows. (If you have alternate transportation, park your car in a high-traffic location—even just on the weekends—for visibility.)
• Write an ad on the back windshield with window markers.
• Hang a flyer in your office break room or in the lobby of your apartment building.
• Tell your friends (but maybe not in a huge group chat, okay?). Yes, word of mouth still works. You’d be surprised how many friends of a friend might be looking for a used car.

Once the responses to your ad start pouring in, you’ll need to screen those buyers and pick the ones that mean business.

You also want to be safe and protect yourself from fraud, theft or physical harm. (When you’re selling something worth thousands of dollars, you have to watch out for nutcases.) 

How to Stay Safe When Selling a Car Privately

• Get people 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 or text, 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! 
• Make sure payment is lined up. Ask them how they’re planning to pay for the car. If they give you the runaround or say they can pay some of the money now and the rest later, that’s an immediate no-go!
• Pick a public meeting place. Giving your home address to a bunch of strangers? Bad idea. For your own safety, agree to meet up somewhere public, preferably during the day. Many police stations have safe exchange zones with cameras for this exact reason.
• Bring someone with you. It’s always a good idea to have someone else with you when you meet potential buyers in person.

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 you up too. So be friendly, be honest, and make sure you know what you’re talking about.

Tips for a Safe Test Drive

• Check your insurance coverage. Hopefully, nothing will happen during the drive, but you want to be prepared if it does! Contact your insurance company beforehand to see if they cover injuries or damages for test drives.
• Ask to see their driver’s license. This is an easy one to forget, but you want to be sure the buyer has a valid driver’s license before they get behind the wheel of your car.
• Go on the test drive with them. Don’t just let someone drive off with your car! It’s normal to ride along during the test drive. And again, safety is important, so bring a buddy. If no one can go on the test drive with you, at least tell someone where you’ll be and ask them to check in.
• Stick to populated areas. The driver wants to get a good feel for the car, but they don’t need to go on an off-road trek. Try to keep the test drive relatively short (15–30 minutes), stay in the general area, and say no if they ask to go to a secondary location.
• Make your pitch. This might be your last chance to remind potential buyers about your car’s benefits, so don’t just awkwardly ride shotgun in silence. Point out the car’s best features and answer any questions they may have.

If a buyer really likes your car, they may also want to have a mechanic inspect it—which is a reasonable request. Once you both agree on the mechanic (the buyer will probably want someone they trust), pick a date and time to meet up for a full inspection or diagnostic check. Typically, the buyer is the one who foots the bill for an inspection.

Hopefully, by this point you’ve got someone who’s excited to buy your car. If they’re willing to pay your asking price, great! But usually they’ll make you an offer—which means it’s time for everyone’s (least) favorite part: negotiating.

How to Negotiate When Selling a Car

• Know your lowest acceptable price. If you don’t decide this beforehand, it’s easy to get talked down too low when the haggling starts.
• Be prepared to walk away. If the buyer’s offer is too low and they refuse to come up, don’t be afraid to say, “Sorry, I can’t do that.”
• Get the full price up front before you give them the car. Never (ever!) accept a down payment for a car or agree to let a buyer pay in monthly installments. If you sign the title away and they stop making payments to you, there’s nothing you can do about it because that car is no longer yours.

Almost there! But before you hand over the keys, you need to make sure you’ve got everything legally squared away with payment and paperwork.

Safest Forms of Payment

When selling a car privately, the safest forms of payment are cash, a cashier’s check or a money-transfer app like Venmo or PayPal (just make sure the money clears into your account before you hand over the title). If you’re worried about any funny business, you can meet the buyer at the bank.

Some people use an escrow company to be extra secure with payment. This is a third party that makes sure funds are legit and holds them until the sale is complete. But escrow services aren’t free! So unless you’re selling a car to someone across the country, you should be able to handle the payment yourself.

How to Finalize a Car Sale

The exact paperwork you need to fill out or turn in to your local DMV depends on your state. But here are some of the main things you have to do when selling a car:

• Complete the bill of sale. A bill of sale acts as proof that you sold the vehicle (like a receipt). It lists information about the car and the transaction—including vehicle type, VIN, current mileage, buyer and seller names, addresses and signatures, purchase price and sale date. You and the buyer will both sign and date the document, and you’ll each keep a copy.
• Transfer 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 fill out this form and take it to your local DMV to prove you no longer own the car. 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.
• Let your insurance company know. Don’t forget to remove the car from your auto insurance policy once it’s sold.

Selling a Car but Don’t Have the Title?

If you still owe money on your car, you may have to pay off the loan before you can get the title from the lender. Just be up-front with the buyer that you’ll get them the title as soon as you can. You could also agree to do the sale at the lender’s office to put the buyer at ease. That way, you can pay off the loan and immediately hand them the title.

What to Do After You Sell Your Car

Congratulations, you’ve sold your car! Now what?

Before you run off and buy a new car, you need to add the money you just got for your old one to your budget. Why? Because a budget helps you prioritize where that money should go.

Right now, you may think you know how much car you can afford. But your budget might tell you differently. Maybe you need to get a cheaper, used car for now while you pay off credit card debt or build your emergency fund. It all depends on you and your financial goals.

So, plug the profits from the car sale into your budget and decide the best way to make that money work for you.

If you don’t already have a budget, you can create one for free with EveryDollar. It’s super easy to make a plan for your money every month—so you can keep up with your spending and stay on track with your goals (including buying a car).

It’s time to put yourself in the driver’s seat of your finances. Download EveryDollar today!