How to sell a car?

June 25, 2009 4:31 PM

After someone has agreed to buy my car from me, what are the steps?

I am selling my car. I am going to list in on craigslist, do some word-of-mouth, blah, blah. I'm not that concerned about how to get someone to notice it and buy it, but I have no idea what to do after someone makes an offer.

I currently owe $6500 on the car. It's worth a bit more, and I think I will be able to get $8000 for it, if any of this is relevant.

Anyway, so how does one transfer ownership? Am I supposed to assume that the buyer will just give me the money and I will just pay off what I owe? I really do not understand anything whatsoever about this process, so please explain to me, step-by-step, what I need to be prepared to do.

posted by foxinthesnow to travel & transportation (8 comments total)

Do you actually have the title, or is it owned by whoever loaned you the money? FWIW, on the back of my car's title are printed fairly detailed instructions on how to transfer ownership of the car in a way that keeps the state happy.
posted by hattifattener at 4:50 PM on June 25

This process usually varies by state, and it sounds like you don't have title to the car, since you have an outstanding balance on a loan for it.

Presumably, then, you need to contact the company that holds title to your car and ask them how you can sell the loan to another party.
posted by dfriedman at 4:57 PM on June 25

Take a look at this web site.
posted by dfriedman at 5:04 PM on June 25

(I'm assuming from your profile that the car is registered with the MI DMV.)
posted by dfriedman at 5:04 PM on June 25

Thanks, dfriedman. See, I'm so unfamiliar with this process that I didn't even know exactly what a "title" was!
posted by foxinthesnow at 5:14 PM on June 25

A title is a legal document stating that you own the car, as opposed a company who loaned you the money owning the car.

The car is the collateral for the car loan; once the loan has been fully paid, the company from whom you got the loan is supposed to file papers with the DMV transferring title to you.

Since your loan has not been fully paid off but you want to sell the car to someone else, I would expect that you have to contact the company that actually legally owns the car. I assume that is the same company with whom you have the car loan.
posted by dfriedman at 5:18 PM on June 25

If you don't have the title you will have to contact the lender; depending on the lender there are various ways this could go down. If the lender is local you can probably do the title transfer in their office -- the other party brings the money, gives some of it to the lender, who releases their claim on the title, and you sign it as well. If your loan has been bought by an out of state lender, things may be more complicated. I once bought a car from someone whose lender was in a different state and who simply would not release the title unless the car was paid off (it was kept in some location in texas). In this case you may need to figure out some way to pay it off yourself, as you may have a hard time finding a buyer who will hand you the money without getting the title right there (and they really shouldn't unless they know you or have some connection to you.)
posted by advil at 5:47 PM on June 25

The answer to your question is different for every state. Go to your state's Department of Motor Vehicles (or whatever it's called in your state) website and find the How to Sell Your Car page. Or knock on your middle-aged neighbor's door and ask her.

You can get in serious trouble following the generic advice above. One of my least pleasant brushes with the law was around an illegal mistake I made selling a car . . . that was the only legal way to do it in the state where I'd grown up.
posted by gum at 6:45 PM on June 26