Activities Hobbies 8 Steps for Completing a Used Car Sale How to Complete a Used Car Sale with a Private Seller Share PINTEREST Email Print Comstock / Getty Images Hobbies Cars & Motorcycles Used Cars Cars Motorcycles Trucks ATVs & Off Road Public Transportation Contests Couponing Freebies Frugal Living Fine Arts & Crafts Astrology Card Games & Gambling Playing Music Learn More By Keith Griffin Keith Griffin Keith Griffin is a member of the New England Motor Press Association and has been an automotive journalist and new car reviewer for more than a decade. Learn about our Editorial Process Updated on 06/28/18 It’s difficult to pinpoint exactly what you need to do when completing a used car sale. The laws do vary from state to state. However, here are the right 8 steps to finishing the sale. You can check specific laws by going to DMV.org for links to your local motor vehicles department (or whatever your state authority is called). However, there are certain things you need to do in the midst of buying a used car or selling a used car. This article looks at the final steps in the sale procedure for both buying a used car and selling a used car. Elsewhere we have advice about inspecting a used car and test driving a used car if you are a buyer and preparing a used car for sale if you are the seller. Avoid Pressure Seller & Buyer: This is when mistakes get made. Don’t let the seller or buyer coerce you into a quick sale if you are not ready. Paperwork mistakes can be made that can come back to haunt you. Plus, pressure in a sales transaction normally means you are being taken advantage of either by the buyer or the seller. Contact Your Insurance Agent Seller: Determine that you are going to be free of liability for this vehicle once it leaves your driveway for the last time. Not taking this step means you could be on the hook if a collision occurs. Ask your agent the best time to cancel your insurance. They have the best understanding of the intricacies of your insurance policy. Buyer: Most states require you to have insurance before you can register a car. It’s important to contact your agent to make sure you can afford the car’s insurance premiums and you have the right amount of coverage. Put Your Papers in Order Seller: You have to be in possession of your title and registration before you can complete the sale. Buyer: Closely inspect the title to make sure the mileage recorded corresponds realistically with the car being sold. The mileage should not be lower on the car you are buying than what is recorded on the title without a great explanation. Also, you need to make sure the vehicle identification number matches the registration and the used car you are buying. Papers Please Seller: Turn over the title only when you have the money in your possession. This does not mean when you have the check in your possession. You have to have the funds in your account before you turn over the title. Trust nobody (except maybe your parents). Once the title is signed over, it is going to be awfully difficult to get your vehicle back without a lot of legal hassles – especially if your car is quickly sold again. Buyer: Ensure that the title is clear of any liens before turning over your hard-earned funds. Liens are typically marked on the title. Your seller needs to prove to you the lien has been released. If you have any doubts, contact the lien holder. States don’t release titles with liens on them but forged documents could lead to their wrong acquisition. The registration Seller: Do not let your just-sold used car leave your possession registered in your name for a number of reasons: You are responsible for the car as long it is registered in your name.You’re on the hook for parking tickets.You are liable if there is an accident.In states that charge property tax on motor vehicles, you are liable for taxes as long as the car is registered. Each state has different procedures for canceling your registration. What you need to do is get clear proof you have canceled it in case any questions arise - such as your buyer not properly registering the car at the time of purchase or tax officials trying to levy a bill against you. Buyer: Make sure the seller has his or her registration and all accompanying documentation out of the car. It could cause you some consternation during a traffic stop if you handed a police officer the wrong papers. The License Plates Seller: Again, check with your local motor vehicle authority on how to proceed with your license plates. I have a set of vanity plates from an old car of mine that I probably should not have kept. Fortunately, Connecticut motor vehicles did not come after me for them. At the very least, remove the license plates from your car. Bring them with you when you cancel the registration in case the motor vehicle authority does want them back. Some states may let you keep vanity plates because you paid extra for them. Buyer: Pending the inspection required by some states for used cars, you may be issued temporary plates for the used car you are buying. Laws vary from state to state. Do not expect the seller to allow you to use the plates currently on the car you are buying. Plus, you are not to want any liabilities associated with the previous owner. Taxes Seller: You are not required to collect the sales tax (or whatever your state calls it). That is the responsibility of the buyer. Don’t let the buyer attempt to put this burden on you. Buyers: Most states will require you to pay the sales tax associated with a used car purchase at the time of registration. Also, states expect you to pay the fair market value for the car and not what is on the bill of sale unless you can demonstrate why the car is worth less than market value. (Previously, owners and buyers would collude to lessen a car’s value on paper so the sales tax would be lower. The seller would collect the full price but put in writing an amount that was 50% below the transaction price.) Make Sure the Car Is Clean Seller: Don’t leave behind anything that is potentially troublesome. This includes old receipts with credit card info or personal papers. You would be surprised that some people think selling a used car “as is” means they can leave it a mess. Buyer: Give the car a good once over before taking possession. You might find important items that should be returned to the seller, including paperwork they need. There is no need for incriminating fingers to be pointed your way. You can’t keep found property. The seller is only selling the car and not all of its contents.