Selling your car can be simple, but to avoid problems between you and the buyer, you should know what the law requires.
Before you sell your vehicle
Have a vehicle title in your name.
- You must have a title to the vehicle in your name, even if you have never driven the vehicle. You can't sell a car that isn't titled to you, unless you have power of attorney from the titled owner, or you are a licensed dealer.
Pay what you owe before you sell the car.
- If you owe money for the car, your title will show a lien (a secured party). You must pay what you owe and get a lien release from the lender.
Find a buyer
Post your selling advertisement either in newspapers or on Internet. A good free website is craigslist.
Selling process
- Sign and date the title in the area for the signature of the selling owner or owners. If the title shows more than one owner and the names are separated by the word "and", all owners shown must sign. If the word "or" separates the names, any of the owners shown may sign. If you lost the original title you will have to apply for a replacement title. Sign the replacement and give it to the buyer - even if you find the original. The original becomes invalid when a replacement title is issued.
- Fill in the vehicle odometer mileage statement on the title. This is required under federal law.
If your car is less than 10 model years old, write in the odometer reading - even if you sell to a family member. The current calendar year minus your car's model year equals your car's age. The odometer reading is the number of miles on the vehicle, not on the engine (even if the engine is newer than the rest of the vehicle). Write the miles in the space provided on the title and show whether the miles are:
- Actual = The odometer has always worked properly and recorded all miles the vehicle has traveled.
- Not Actual = The odometer was replaced and set at zero because of a repair; the odometer stopped working and the car was driven more than 30 days before repair; or, the odometer numbers were turned back.
- Complete the brand disclosure area on the title (if applicable).
A "brand" is a permanent note on a title that gives a prospective buyer important information about the history of a car.
Note: There are penalties up to $5,000 for failing to disclose title brand information.
Your title must be branded if, during the time you owned the car, you could answer "yes" to any of the following questions:
- Was your car used as a taxi or for public transportation?
- Was it salvaged? A "salvage" brand is needed if your car is less than 7 model years old and was damaged more than 70% of its fair market value.
- Was it flood damaged? A "flood damaged" brand is needed if water damage was more than 70% of its fair market value.
- Was it used as a police vehicle?
- Was it imported without US emission and safety certification?
- Fill in the selling price on the title. The Department of Revenue may check titles and investigates suspiciously low sale prices.
- Fill in the name and address of the buyer or buyers on the title.
- Provide the buyer with a lien release document from your lien holder; the buyer will need both documents to get a title.
- Remove the license plates from the vehicle. You may transfer them to another vehicle you own.
If you sell your vehicle and your plates aren't expired, you can transfer them to a car titled to you or your spouse. You can't transfer your plates to the buyer - even if it's another family member. If you don't use the plates, you can't get a refund for any remaining registration time for your registration fee or vehicle property tax refund.
- The Bill of Sale is provided for your convenience, it is not a required form. You may keep a copy with your records, and make a copy for the buyer as documentation of the sale. The Bill of Sale is required when you want to claim vehicle property tax refund.
In addition to sell your car to a private party, you could also sell it to a dealer or junk it.
Sell to dealers
Title branding laws that apply when you sell your car privately also apply when you trade it in to a dealer. A dealer may ask you to guarantee the condition of your trade-in under "Buyer's Representation" on the purchase contract. You must give accurate information, or the dealer may be able to sue you in court.
Junk it
If you sell your car as junk, and you don't want the car to be driven again, write the word "Junk" across the title before you give it to the buyer or salvage dealer.
If you lost your title, you don't need a replacement title to junk the car. You can show the certificate of vehicle registration as proof you own the car, and sign a junk bill of sale.
Note: Once a vehicle is junked it can never be titled or licensed again, even if someone repairs or restores it.
Call for a dealer license
Some states impose a limit on how may cars you can sell in a given year, for example, Wisconsin law says you can sell up to 5 vehicles (titled in your name) in 12 months. If you sell more than 5, or if you buy even one vehicle for the purpose of reselling it, you must have a dealer license.
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