Car Sale

How To Sell a Car

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  • Online car dealers typically offer the easiest and quickest way to sell a car.
  • Going to a dealership is best if you want the trade-in value of your old vehicle.
  • Private sales usually offer the highest price for your used car, but they take extra work.

Knowing a few strategies involved in how to sell a car online or in person can be a huge benefit during this somewhat complicated and financially significant process. To help you make informed decisions, our team put together the following guide, which outlines tips and strategies related to selling a used vehicle.

How To Sell a Car: Overview

Below, we’ll give an overview of the steps in the process before going in depth on each.

1. Gather Documents Needed To Sell Your Car

As you take the first steps to learn how to sell a car, you should have your vehicle identification number (VIN), license plate number, and details about the make and model on hand. There are some other documents that you’ll need later on, but gathering these at the start can help you stay organized.

2. Learn How Much Your Car Is Worth

Once you have your VIN and other vehicle information, it’s smart to get an online estimate of how much your car is worth. This estimate can help you put the offers you’ll receive into context. However, consider this estimate to be a very general one, as individual factors about your vehicle will affect its selling price.

3. Prepare Your Car for Sale

Depending on how you plan to sell your vehicle, you don’t necessarily need to get photos of it. Taking a few steps to ensure that your car looks its best before listing it could help you get more money, though. At the very least, it’s a good idea to wash your car’s exterior and vacuum its interior before putting up a listing.

4. Decide How To Sell Your Car

There are three main choices as you navigate how to sell a car: list it for a private auto sale, hand it to an online dealership, or sell it to a local car dealership. Each method has advantages and disadvantages, so the best method will depend on your vehicle, preferences, and goals.

5. List Your Vehicle for Sale

Skip this step if you plan to sell your vehicle directly to a local dealership. Those who hope to sell their car to an online dealership usually only need to enter a few details to list it. Drivers who want to sell their car to a private buyer must create a listing on a site like Facebook Marketplace or Craigslist. It’s typically much simpler to list a vehicle with an online dealership than through a private marketplace.

6. Work With a Buyer To Complete the Sale

When you work with a local dealership, you’ll have a little room to negotiate the sale or trade-in price of your car. For private party auto sales, this step can be a lengthy part of the process, involving meetups for test drives and inspections. When it comes to online car dealers, it means setting up either a pickup or an in-person appointment to sell your car.

As you learn how to sell a car, remember that you need to document the sale. Both local and online dealerships will handle this part of the transaction for you. In a private party auto sale you may need to use your own bill of sale as proof that the transaction actually occurred.

7. Get Paid for Your Car

Once the transaction is complete and the bill of sale has been signed, it’s time to get paid for your car. This is simple with both online and local dealerships, since they often issue payment immediately or within a few days. Collecting money from a private buyer may be a little trickier, especially if it involves a loan for either party.

8. Complete Necessary Paperwork

There is some paperwork involved with the completion of every auto sale. This means working with your state’s department of motor vehicles (DMV) at a bare minimum. If you have an active loan on your vehicle you’ll also have to work with your lender. While dealerships almost always take care of this process for you, you’ll be responsible for completing this step if you choose to sell a car privately.

Documents You’ll Need To Sell Your Car

To move through the car sales process, it’s critical that you know certain details about your car. Collecting these documents at the start can help ensure a smooth transaction.

Required Vehicle Information

Before you learn more about how to sell a car, have the following on hand:

  • Current mileage
  • VIN or license plate number
  • Make, model, year, and trim level
  • Installed accessories or modifications
  • Lienholder information if you have an active loan

Required Documents

To sell a car, you’ll need to verify your information and ensure compliance with local regulations and involved third parties. The documents you’ll likely need include:

  • Valid registration
  • Vehicle title if you own the car outright
  • Photo IDs for everyone listed on the car title or loan

Depending on where you live, a bill of sale may not be required by state law. However, it’s strongly recommended that you have one on hand to officially document the transaction.

Optional Documents

There are some documents that, while not required, can be extremely helpful when selling a car. These pieces of information include:

  • Service records
  • Owner’s manual
  • Most recent inspection report
  • CARFAX vehicle history report
  • Warranty information if you have one

How To Price Your Car for Sale

There are many websites such as Kelley Blue Book (KBB) that can give you an estimate of your car’s market value before listing it. Most sites provide a simple form where you can enter your car’s information. The more accurate the details you provide, the closer your estimate will likely be to the final price when sold.

Be aware that many of these sites partner with dealerships and other buyers – or buy cars themselves. They may use the information you provide for marketing purposes. If you’re only doing research and not ready to enter into the sales process just yet, CARFAX may be a good option since the company isn’t aligned with a single dealership or buyer.

How Much Is My Car Worth?

How much your used car is worth depends on a few key factors.

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Those wanting to know how to sell a car for the most money should consider their vehicle’s various details as they determine a fair rate. You’ll get far more for a new or low-mileage used car than for one that’s better suited for the car recycling process.

How To Prepare Your Car for Sale

Doing a little work to make your car presentable can help you get more money for it, especially in a private sale. These are some steps you can take to get your vehicle ready:

  • Clean the interior
  • Wash the exterior
  • Vacuum all upholstery
  • Wipe down all surfaces
  • Remove all personal items
  • Clean the windows and windshield
  • Remove debris from the engine block
  • Remove brake dust and clean the wheels

Should You Fix a Car Before Selling It?

If you’re selling the car to a dealership, it usually doesn’t make sense to fix small problems before the transaction. Car dealerships typically have in-house repair centers or relationships with shops and almost always pay less for repair work than you would. As a result, the increase in the sale price is unlikely to compensate for what you’d spend on repairs.

When it comes to private party auto sales, however, getting repairs done before you list the car may make sense. Even if you only break even – or come close to doing so – a car in good working condition will typically sell more quickly and easily. Car buyers can also use mechanical issues as a strong negotiating point to lower prices.

Best Ways To Sell Your Car

Of the three key methods below of how to sell a car, which option is best for you? That depends on your vehicle, goals for the sale, and personal preferences. Note that you could have entirely different options if you’re looking to offload an unusable junk car.

Private Party Sale

A private auto sale is where one party sells a car directly to another party without a dealership or another intermediary. This is often done through listings found on localized sites like Craigslist and Facebook Marketplace.

When you research the value of your vehicle, you’ll notice that the estimated private sale value is higher than the estimated trade-in value. While it’s true that selling a car privately can net you more cash for your car, it also involves significantly more work on your part, and some risk.

Private Party Sale: Pros

  • More personal experience
  • Flexibility over sales terms
  • Can fetch a higher selling price

Private Party Sale: Cons

  • More work involved
  • Potentially lengthy sales process
  • More paperwork and compliance needs

Best Choice For:

Private auto sales are best for people who are trying to get top dollar for their used cars and who don’t mind putting in some extra time and effort.

Online Car Dealers

Online car dealerships like Carvana, Vroom, and Cars.com have made the car selling process extremely simple and efficient. With basic information about your vehicle, companies like these can give you a cash offer in just a few minutes.

Most of these providers also sell vehicles, so you can either get cash for your car or use it as trade-in value toward your next car. Many of them can pick your old car up from your home and pay you on the spot, meaning that you won’t need to take a trip to the dealership.

Online Car Dealer: Pros

  • Fast, easy selling process
  • No dealing with salespeople
  • Can complete most or all of the transaction from home

Online Car Dealer: Cons

  • No room to negotiate
  • Offers tend to be lower than private sale values

Best Choice For:

Online dealerships are best for people who want a no-hassle car selling experience. These companies cover most administrative tasks and paperwork, and they’ll often pick up your car. The online dealer Peddle is an easy way to get rid of scrap cars through the same process.

Local Car Dealerships

Traditional dealerships remain a popular choice for people looking to sell a car. They combine the security of using a large company with the personal experience of selling a vehicle directly to other humans.

As with online dealers, you can use your old car as trade-in value toward another vehicle. Unlike with online used car dealerships, however, you can use that value toward the purchase of a brand-new car when you go to a local branded dealership.

Local Car Dealership: Pros

  • Selling price is negotiable
  • Many dealerships are locally owned
  • Trade-in value can be applied toward a new vehicle

Local Car Dealership: Cons

  • Requires travel to and from dealership
  • Selling process can take several hours
  • Many dealerships are high-pressure environments

Best Choice For:

Local car dealerships are good for people who want to sell their vehicles to help finance the purchase of a brand-new car. People who are confident in their negotiation skills may also be able to get a little more for their car than they would online.

How To Sell a Car Online

When it comes to private auto sales, how you list your car online makes a huge difference in how much you’ll get for it. With thousands of dollars potentially at stake, it’s worth knowing and using some best practices before listing your vehicle on local marketplaces. It’s best to get quotes from various online dealers to determine your best offer.

Featured Dealers To Sell Your Car Online

We reviewed the industry’s top dealerships for selling your car online and here are our featured picks.

Best Provider
Carvana

Our Rating: 4.5 out of 5.0

Great Choice for Older Vehicles
Peddle

Our Rating: 4.4 out of 5.0

Easy Process
Vroom

Our Rating: 4.2 out of 5.0

Take Good Photos

Photos are an important part of any used car listing since they allow potential buyers to see the actual vehicle before moving forward. First impressions are very important, so good photos are the key to making your vehicle stand out from other listings.

You don’t need to hire a professional photographer, but there are a few basic things to consider when taking photos for a used car listing:

  • Take photos in daylight: Lighting is key to getting high-quality images. Get pictures of your car during the day when you have plenty of light so that they’re bright and clear.
  • Prepare your car first: Make sure your car is clean inside and out when you take photos. A clean car will naturally look like it’s in better condition than one that’s visibly dirty or cluttered.
  • Consider your surroundings: The background that appears in images of your vehicle can affect how buyers perceive it. It’s worth taking photos of your vehicle in attractive locations like parks and natural areas to help it stand out from the crowd.
  • Capture the whole car: Listings that show every part of a vehicle inside and out are easier for buyers to trust than those with only a few photos. Make sure to capture the front, sides, and rear of your car’s exterior. You’ll also want photos of all interior spaces, with special attention paid to the driver’s seat and the instrument panel. Be sure to include a photo of the odometer reading.

Remove Personal Effects

Items like bumper stickers and dash ornaments reflect your individual personality, so remove them before taking photos. Making your car look as neutral as possible helps buyers picture themselves owning and driving the vehicle. In addition, personal items such as political bumper stickers may be divisive and could turn some potential buyers off.

Briefly Provide Relevant Information

The best listings are ones that provide all the information a potential buyer would want to know – and stop there. There’s no need to write a lengthy description of every detail about your vehicle, and doing so may be a red flag for some buyers.

Generally speaking, the information you should provide includes:

  • Mileage
  • Condition
  • Known issues
  • Recent repairs
  • Reason for selling it
  • Exact make, model, year, and trim

Many who don’t know how to sell a car write extremely detailed listings. That’s not recommended, as a long post may turn some potential buyers off.

Set the Price Slightly Above Your Target

Expect buyers to negotiate during the sale, so try to think of the listing price as your initial offer. In general, it’s a good idea to set your asking price around $1,000 to $2,000 higher than what you expect to receive. This leaves wiggle room for you to come down on the purchase price once negotiations have begun.

How To Complete the Sale

Private car sales can potentially net you thousands of dollars more for your car than if you sold it to a dealership. However, doing so takes much more time, work, and patience in dealing with prospective buyers. There are a few keys to working with car buyers strategically so that you can get the best price for your vehicle.

Wait For Several Offers To Come In

If you’re eager to sell a car, it can be tempting to engage with the first person who responds to your listing. It’s a good idea, though, to wait until you have a few offers before responding. If you’re trying to sell your car in Houston, Chicago, or any other major city, you’ll likely receive a large number of offers in very little time.

Keeping up communications can be time-consuming and stressful. Having a few offers in hand allows you to whittle down potential buyers to the highest bidders. If someone wants your car based on the listing, waiting a few hours or even a day or two won’t change that.

Only Negotiate in Person

When you list a car online, you’ll likely have potential buyers asking for your lowest price and attempting to start negotiations online or by giving you their phone number. However, it’s in your best interest to not respond directly, as you can expect further negotiations in person.

You can tell a buyer that you’re flexible on the price but that you’d like them to see the car in person first. This will weed out people who aren’t seriously considering a purchase and pushes negotiations until the buyer has put some of their own time and effort into the transaction.

Document Everything

Even if your state doesn’t require a bill of sale to transfer titles and registration, it’s always a good idea to have one. A bill of sale serves as an official record of the agreement between you and the buyer, which is important in case of a dispute after the transaction.

The person who buys your car should have no problem signing such an agreement. If they don’t want to sign a bill of sale, that’s a major red flag and you should find another buyer.

How To Get Paid for Your Car

Collecting money for your car is, of course, one of the most important steps of the process. When you sell a car to a dealership, either online or in person, this part is easy. If you’re getting cash for your vehicle, the dealership will likely either pay you on the spot or mail you a check. If you are using your car as a trade-in, the value of your car will be applied to your next purchase.

How To Get Paid in a Private Sale

When you sell a car privately, the process can be much more complicated. Private party sales come with the potential for messy financial transactions or even scams. To ensure that you get paid what you’re owed, there are a few guidelines that you should make sure to follow.

Only Accept Safe, Verifiable Payment

Personal checks can bounce if the buyer doesn’t actually have the funds in their account. And while cash is guaranteed, having thousands of dollars in your pocket isn’t necessarily safe.

A teller’s check or cashier’s check is the most secure form of payment in a private auto sale, since they come directly from an organization. Funds are guaranteed to be available with certified checks, resulting in a safe and secure transaction.

Never Agree To Wire Transfers or Money Orders

According to the Federal Trade Commission (FTC), wire transfers and money orders are popular ways to scam others out of their money. People can easily fake money orders or evidence of a money order to make it look as though you’ll receive funds when you won’t.

Never accept payment via a wire transfer or money order, even if it’s from a reputable company like MoneyGram or Western Union. If a person actually has the money to buy your car, getting a certified check shouldn’t be an issue.

Wait For Finances to Clear

If you do accept a personal check, wire transfer, or digital payment through a service like Venmo or PayPal, wait for the funds to arrive before handing over your keys and documents. Even if a buyer has good intentions, it’s always possible for checks to bounce or for something else to go wrong. Just as a buyer would ask to verify the condition of your car by taking it to a mechanic, it’s reasonable for you to verify their payment before transferring your car over.

How To Sell a Financed Car

If you own your car outright, you can move on to the next step after you accept payment. But if you have an active loan on the car, you’ll have to pay it off before your lender gives you the title to transfer over to the buyer.

If you sell the car for more than your loan balance, this is relatively straightforward:

  1. Find the payoff amount: You should be able to look up the balance of your loan online. If you can’t, you can always call your lender or visit in person to find out how much you have left to pay.
  2. Pay the lender: To release the title, you’ll need to pay the balance of your loan. You can use the funds from your sale to do this if the buyer agrees to wait for the title. If you have good credit, you can take out a personal loan in the amount of the balance and pay yourself back once you receive funds.
  3. Collect and hand over your title: Once you’ve paid off your loan, the lender should be able to sign over the title immediately. Then, you can sign that title over to the buyer. Most banks and credit unions have in-house notaries to make the title transfer official.

Necessary Paperwork for Selling a Car

Once you’ve handed over your title, the new owner will need to register the vehicle in their name and take care of further steps. Even though you no longer own the car, there are still a few priorities that you should take care of.

File a Notice of Release of Liability

The person who purchases your car should register it in their name quickly after wrapping up the car buying process. However, if they fail to do so, you can potentially be held liable for the vehicle and face fines or other penalties.

To avoid this, you can file a notice of release of liability with your state’s DMV. This form lets the state know that you no longer have legal ownership of the vehicle, clearing you of responsibility.

Cancel Your Car Insurance

Car insurance follows the car, not the driver. That’s why you should wait to cancel your auto insurance coverage until it’s clear that you no longer have any responsibility for the vehicle. Canceling coverage while the car is still under your name could result in legal penalties.

Filing the notice of release of liability will guarantee that you are no longer legally liable for the vehicle. You should wait until you’ve filed it and it has been accepted to cancel your auto policy.

How To Sell a Car: Conclusion

Depending on how you sell a car, the process can sometimes be long and complicated. However, online car dealerships have made that process much simpler and faster. That’s why our research team names online dealers as the best places to sell your car – especially if you’re busy or don’t have the patience for people and paperwork.

Private party sales and traditional dealerships may get you a slightly better value for your car or SUV, but both require far greater time and energy. The additional money may be necessary for some and others may not mind the extra effort. But for many, that additional work coupled with the stress of dealing with buyers in person just isn’t worth it.

How To Sell a Car: Recommended Dealers

Due to the ease and speed of their transactions, our team strongly recommends fielding offers from multiple online car dealers. With some basic information, you can get real offers from reputable companies such as Vroom and Carvana.

Featured Dealers To Sell Your Car Online

We reviewed the industry’s top dealerships for selling your car online and here are our featured picks.

Best Provider
Carvana

Our Rating: 4.5 out of 5.0

Great Choice for Older Vehicles
Peddle

Our Rating: 4.4 out of 5.0

Easy Process
Vroom

Our Rating: 4.2 out of 5.0

Vroom: Easy Process

The biggest advantage of online dealerships is how easy they make it for those still learning how to sell a car. Among those options, Vroom may have the easiest car selling process. Using a simple, guided online form, you’ll get a real offer on your car in just a few minutes. If you like the offer from Vroom, it’ll schedule a driver to pick your vehicle up and pay you on the spot.

Carvana: Best Provider

Carvana is one of the best-known names in the online dealership industry, and for good reason. The provider earned the highest score in our most recent study and gained the award for the “Best Provider.” With Carvana, sellers get consistently reasonable offers, reliable customer support, and a truly seamless car-selling experience.

Read more: Carvana sell my car review

How To Sell a Car: FAQ

Here are a few frequently asked questions about how to sell a car.

Do I need to pay sales tax when I sell a car?

In most cases, the buyer is responsible for paying the sales tax when they purchase a vehicle. So, sellers shouldn’t have to pay a sales tax during the transaction.

Do you need a notary to sell a car?

In most cases, titles must be notarized to be official. Most online car dealerships and many local dealerships will take care of title work for you. If you sell a car in a private auto sale, you’ll have to find a notary and handle the title transfer yourself.

How do I make sure of cash when selling a car?

You can make sure that the cash you receive for selling a car is legitimate by taking it to a bank and depositing it. It shouldn’t be a problem for the buyer to wait for you to make the deposit. If they have an issue, it’s a warning sign that something could be suspicious about the transaction.

How can I be careful when selling a car?

To be careful when selling a car, there are a few basic principles to keep in mind. Always meet people in well-lit public areas and bring a friend or family member along for the test drive. Insist on verifiable payment, preferably a certified check. Don’t accept wire transfers or money orders in any case whatsoever, as they’re often used in scams.

At what point is it best to sell a car?

The best point to sell a car in terms of value is when it’s still relatively new, without many miles on it. However, if you have a loan on the car, it’s also important to wait until you have positive equity to sell the vehicle. Otherwise, you could end up needing to make car payments on a vehicle you don’t even own anymore.

Our Methodology

In order to help people make informed decisions about where and how to sell their cars, our expert review team is committed to providing precise, accurate, and objective information. For our research, we evaluated each company on the same criteria across the following categories:

  • Cost: Our team conducted a secret shopper study to assess the offering prices of each provider. We also considered any fees or additional costs charged by companies during transactions.
  • Platform: We evaluated each provider’s online platform, rating them based on ease of use, speed, and available options. 
  • Transaction support: Because there are many other steps involved in selling a car online beyond simply listing it and accepting an offer, our team evaluated companies based on their support for transactions, such as whether they require a seller to travel for an in-person evaluation, if they manage loan payoffs, and more.
  • Customer experience: We scoured online reviews on websites such as the Better Business Bureau (BBB) and Trustpilot in order to gauge the opinions and experiences of real customers. Our team used proprietary metrics to normalize ratings across the industry in order to assess customer sentiment in context.
  • Industry reputation: To assess their standing within the auto sales industry, we considered each company’s rating with the BBB along with its years of service. We evaluated these factors using proprietary metrics to get a more accurate representation of specific company reputations compared to industry norms.