If you have a car you no longer need and don't plan to use as a trade-in, you may want to sell it yourself. The process is relatively simple, but make sure you know your state's laws first. Here is a step-by-step guide for selling your used car.

Key Takeaways

  • Before selling your used car, it's important to know what it's worth. There are several good online resources for this purpose.
  • States have different rules governing the sale of used cars, so you'll want to consult your state department of motor vehicles website to make sure you have all the necessary paperwork.
  • If you're fortunate enough to sell your car at a profit you may owe capital gains taxes. Sales taxes, if any, are for the buyer to deal with when they register the car with their state.

Start With Estimating the Vehicle's Value

Selling a used car isn't a complicated process, though there are some steps involved. One of the first things you'll need to do is determine what the vehicle is worth.

There are numerous online resources you can use to assess a used car's value, including:

  • Kelley Blue Book (KBB)
  • CarFax
  • National Automobile Dealers Association (NADA)
  • AutoTrader
  • Edmund's

These online tools will estimate your vehicle's value based on the information you provide, including the year, make, model, mileage, and condition. Depending on which website you're using, you may be able to get estimates of both the vehicle's value for a private sale and what you might receive if you were to trade it in with a dealer instead.

Get Your Used Vehicle Ready for Sale

Before advertising your vehicle for sale, it helps to make sure it's buyer-ready. That can mean doing things like:

  • Cleaning the vehicle inside and out
  • Making minor repairs
  • Replacing worn tires
  • Having a mechanic inspect the vehicle to check for any major issues

You'll want to keep the cost of things like cleaning and repairs in mind if you're hoping to bank the most profit possible from the sale. Cleaning is something you could do yourself, for example, which can save a little money. But if there's a major repair needed, consider whether you want to pay for it yourself or pass that cost on to the next owner.

Of course, you'll need to be transparent and let the buyer know upfront if any repairs are necessary.

Check Your State Laws for Selling a Used Car

Each state has its own rules for transferring ownership of a vehicle from one owner to another. For example, in the state of Missouri, you're required to provide all of the following to sell a used car:

  • Certificate of title
  • A safety inspection certificate that's less than 60 days old
  • An emissions inspection if you live in certain counties
  • A lien release from a lender, if applicable

The sale must also be reported to the Missouri Department of Revenue and the seller must complete a notice of sale or bill of sale document.

In Virginia, on the other hand, the process is a little simpler. As the seller, you'd sign the title over to the buyer. You'd need to remove your license plates from the vehicle and notify both the Virginia Department of Motor Vehicles and your insurance company that you've sold it.

If you're unsure about what's required in your state, you can check with either your local DMV or Department of Revenue for more information.

Important

Canceling insurance on a vehicle you've sold but failing to notify your state DMV of the sale could lead to issues if the vehicle shows up in the system as registered in your name but uninsured.

Completing the Sale of a Used Vehicle

If you've gotten your vehicle prepped for sale and you know what's required in terms of paperwork, the next step is finding a buyer. There are many ways to advertise a used car for sale, including:

  • Facebook Marketplace
  • Local bargain groups
  • Craigslist
  • Newspaper ads
  • Online or print ads in vehicle trader publications
  • Word of mouth

Some of these cost money, while others are free. The more places you advertise, the more quickly your car might sell, but you'll also want to consider how much you're willing to spend.

When meeting with potential buyers, be prepared to answer questions about the vehicle, such as how many miles it has and why you're selling it. Also, be ready to negotiate on price.

Once you and a buyer come to an agreement on a sales price, the next step is signing over the legal documents and collecting the money from the sale. Payment options can include cash, a certified check, a wire transfer, or a person-to-person transfer via a mobile payment app.

Important

If you're concerned about your personal safety, consider meeting prospective buyers in a neutral location where other people are likely to be around.

Paying Taxes on a Used Car Sale

Selling a used car can sometimes have tax consequences.

The buyer, not the seller, is responsible for paying any sales tax—not to you but to their state DMV when they register the car.

However, you may be on the hook for capital gains tax if you sell the car for more than you paid for it. That rarely happens in the case of everyday used cars, but it might if you're selling an antique or collectible vehicle.

Selling a Used Car vs. Trading It In

You may be able to get more money for your used car if you sell it yourself rather than trading it in with a dealer. But if you're buying a new car anyway, simply trading it in can relieve you of a lot of the work and save you some valuable time.