Sell a Car Privately: Handling the Money and Paperwork

The Right Way to Sell a Car Privately

Selling a car privately can be more profitable than trading it in to the dealer, but it also requires careful attention to detail to ensure the transaction goes smoothly. Whether upgrading, downsizing, or simply looking to make some extra cash, understanding the correct process to complete the sale is crucial. Here’s how I approach the process to sell a car privately while ensuring everything goes smoothly and securely.

How to get paid

When I sell a car, I make sure to think carefully about how I’ll get paid. There are two main methods—cash or a certified cashier’s check. But each comes with its own risks, so I always take steps to protect myself.

Certified Cashier’s Check

The problem with getting a cashier’s check is that there are way too many fake checks out there. See the tips below on how to get a valid cashier’s check.

Cash

The biggest concern with a cashier’s check is the possibility of fraud. Fake cashier’s checks are surprisingly common, so I’ve learned a few ways to ensure the check I’m accepting is legitimate.

1) I always go with the buyer to their bank when they get the cashier’s check. At the bank, I take a picture of the check, including the check number and routing number. This ensures the buyer hasn’t switched to a fake check in the interim.

2) Before finalizing anything, I call the issuing bank to confirm the check is valid. However, I never use the phone number printed on the check itself—those can be fake too. Instead, I look up the bank’s official phone number online and contact them directly.

How to deal with cash

If the buyer prefers to pay in cash, my first priority is personal safety. Carrying a large amount of cash can make me a target for theft, and counterfeit bills are another potential issue. To stay safe, I meet the buyer at their bank. Once the cash changes hands, I ask the bank to convert it into a cashier’s check.

How to handle the title

When I’m selling a car, I always transfer the title at the DMV or an authorized DMV office. Simply signing off on the title and walking away can be risky. If the buyer has an accident or causes damage before transferring ownership, I could still be held liable since the title would technically still be in my name.

If you have a lien on your title

Selling a car with an active lien requires extra steps. I’ve dealt with this before, and here’s the process I follow:

First, I meet the buyer at the bank that holds my car loan.
We park my car at the DMV, then drive to my bank together.
At my bank, the buyer pays off the car loan, and gets a lien waiver from the bank. The buyer holds onto the lien waiver until we get to the DMV
Finally, we head back to the DMV to complete the title transfer.

I know this setup might feel risky to the buyer since I could, in theory, leave the DMV with a paid-off car. But in reality, I’d still need the lien waiver to sell the car in the future, so it’s in everyone’s best interest to complete the process properly.

©, 2024 Rick Muscoplat