When it’s time to sell your car, you can do it in a variety of ways. To choose the best course for you, consider your comfort level with each potential route. Then, weigh them against the time you have to invest in selling your car and, ultimately, how much money you want to make from the sale.
This step-by-step guide walks you through the process from deciding exactly how you want to sell, to signing on the dotted line. If you want to skip ahead, use the jump links below.
- Step 1: Decide How and Where You Want To Sell Your Car
- Step 2: Get Your Paperwork in Order
- Step 3: Find the Value of Your Car
- Step 4: Prepare Your Car for Selling
- Step 5: Advertise Your Car
- Step 6: Answer Your Texts or Emails
- Step 7: Schedule Test Drives
- Step 8: Finalize the Deal
- The Best Way to Sell Your Car Peer-to-Peer
Step 1: Decide How and Where You Want To Sell Your Car
There are three basic ways to sell a car by owner: direct-to-dealer, private sale, and instant cash offers (ICOs). There are pros and cons to each, but it’s important to first familiarize yourself with what these methods are.
| Direct-to-Dealer |
| In a direct-to-dealer sale, you sell your car to a dealer or another entity that will resell it. If you also want to buy from that dealer, you may be able to credit your trade-in value toward the cost of the new vehicle. |
| Private Sale |
| In a private sale (also known as a peer-to-peer sale), you are responsible for all aspects of the sale, including advertising, preparing the vehicle for sale, paperwork, and payment verification. |
| Instant Cash Offer (ICO) |
| An instant cash offer (ICO) service connects you to in-person or online dealerships using your VIN and other details. You get an ICO to take to the dealer who made the offer. After an evaluation to confirm the vehicle’s condition, the dealer hands you a check, and you walk away or use it as a down payment on another car. |
Spoiler alert: The biggest advantage to selling a car peer-to-peer is the opportunity to score a higher transaction price. However, it also requires more effort and time, and you must decide whether the extra money is worth it.
Selling Your Car to a Dealer
Most new and used car dealerships will buy your car. Whether it’s a franchised new car dealer, a national used car network, or your local corner used car lot, many will make an offer. If this route appeals to you, the Instant Cash Offer option is a no-fuss way to go.
| Pros | Cons |
| Eliminates having to list and advertise the car. | You will have significantly less negotiating power. |
| No fielding of phone calls from potential buyers. | Lower transaction price because the dealer needs to generate a resale profit. |
| You don’t need to provide interested shoppers with test drives. | You don’t need to offer test drives to interested shoppers. |
| The dealer handles all the issues with transferring the title and so forth. |
Selling Your Car in a Private Sale
Selling your car to another individual means extra involvement from you. If you are willing to invest that time and energy for a private sale, the reward will be more money in your pocket.
| Pros | Cons |
| You get to set the selling price. | You assume the entire transaction’s burdens, including paperwork and setting up test drives. |
| The potential to make more money from the sale than a dealer’s cash offer. | You will be responsible for working out the payment type and verifying it. |
| The sale will often be to a stranger, which maximizes the need for security and payment verification. |
What About Online or Instant Cash Offer Sales?
When you request an instant cash offer, you will provide the VIN and additional information about the condition of the vehicle. In turn, nearby dealerships will submit cash offers to you. You take the car to the dealer, who will inspect the vehicle and complete the transaction by cutting you a check. Some services may come directly to you to pick up the car if it is non-operable.
The biggest downside of an ICO is that you will sacrifice profit for convenience. However, if you just want to sell quickly and without a lot of back-and-forth, an ICO may be the best option for you. We recommend Kelley Blue Book’s Instant Cash Offer to help you complete the deal.
Step 2: Get Your Paperwork in Order
Having your paperwork in order is one of the most critical things to do when selling your car privately. Assuming you own the car outright, you’ll need to have the title in hand to prove you own the vehicle. Moreover, you need the title to transfer ownership to the buyer. If you don’t own the car outright and carry a loan balance, you must involve the lender before money changes hands. Any outstanding loan balance must be satisfied before you can pass the title to the new owner.
What Paperwork Do I Need to Sell My Car?
Here are some of the other documents your state or the buyer may require, in addition to the title:
- Bill of sale: A mashup of a contract and a receipt, this document should include information such as the date of sale, VIN, odometer reading, and the full names of the buyer and seller, with signatures and addresses for each. Furthermore, the vehicle’s make, model, and year must also be included.
- Vehicle history report: This can be obtained online through sites like AutoCheck. It includes any reported accidents, past registered owners, maintenance, etc.
- Maintenance records: If you were thinking ahead, you’ve kept a record of your car’s scheduled maintenance visits. For example, regular oil changes, transmission fluid changes, and so forth will add to your car’s value.
Step 3: Find the Value of Your Car
- Get accurate valuation: With your paperwork in order, it’s time to find your car’s book value. Use the Kelley Blue Book car valuation tool to determine what your vehicle is worth. Be as specific as possible about the car’s condition and details to receive the most accurate valuation.
- Provide an honest car assessment: To get the correct valuation for your vehicle, you will need to know the car’s year, make, and model. Entering your ZIP code will also help determine the local price, as vehicle prices can vary by location. Be honest with yourself about your car’s condition and features to ensure you get the most accurate valuation.
- Check the private-party value: If you’re selling your car privately, research the vehicle’s private-party value. This estimate differs from the trade-in value, which is generally lower than what you get if you sell the car.
- Set the vehicle price: After receiving an accurate, honest valuation of your car, you can confidently set a price. Whether you are open to negotiating or have a firm price, have a target floor price under which you refuse to go. Remember, you now know the true value of your car and have the last say on its selling price. Unless you are so desperate that you’ll take almost any offer, exercise patience and wait for the right buyer.
Step 4: Prepare Your Car for Selling
Whether you sell your car yourself or go with a dealer cash offer, you should do some prep work to maximize the vehicle’s value. When the buyer (or a dealership used car evaluator) first sees your vehicle, the desired reaction is that you took care of the car and that it’s in good shape.
- Clean the car inside and out: Let’s be honest. Nobody wants to spend their money on a dirty car. So, if you want somebody to buy your car, detail it so well that it looks like it’s fresh off the showroom floor. Washing the exterior is a given, but thoroughly cleaning the interior might be even more important. Few things will turn off a buyer quicker than sliding into a car with a messy interior. You’ll have a hard time finding a buyer willing to meet your asking price if there are fast-food bags, crumbs, and other trash on the floor of your car. Remove any trash, vacuum the carpets and floor mats (including in the trunk), clean the inside of the windows, and if you really want to impress buyers, spray some air freshener. Moreover, you should wipe down every surface. If this seems intimidating, you can always spend a few bucks and have a professional detailer clean the car inside and out.
- Stage your car: After that thorough cleaning, it’s ready for its close-up. We can’t stress enough the importance of taking descriptive photos when selling a car. Plenty of high-quality photos make your car look its best. Also, it helps potential buyers know exactly what they are getting. You don’t want them surprised when they arrive for a test drive. When they don’t find them, their first thought is, What are you trying to hide? If you are having trouble coming up with picture ideas, think about the sort of photos you would need to see in a used car listing.
- Exterior photos: Photos snapped in a pretty or interesting setting are more appealing than those shot in an apartment complex parking lot. Whether you use horizontal landscape mode or vertical portrait mode, ensure you can see the entire vehicle or the specific section you want to highlight. Do a quick walk-around of the car to take a clear photo of every angle, keeping the whole car in the frame. If there are any exterior flaws, such as dents or scratches, take close-up photos so potential buyers aren’t surprised.
- Interior photos: Capture clear photos of all the seats, the cargo area, and the dashboard, showing the steering wheel and sound system. Also beneficial — try taking a “POV,” or point of view shot of what the driver sees when sitting in the driver’s seat. Snap a photo of the odometer to confirm the car’s mileage. PRO TIP: When shooting photos of the instrument panel, have the ignition on to highlight the displays and touchscreen. As with the exterior, take close-up photos to avoid any surprises, such as a tear in the upholstery, a sagging headliner, or broken plastic.
- Under the hood photos: Take one or two photos under the hood. If possible, add a couple of pictures underneath the car, especially if it’s an older car where buyers will be wondering about rust. If the engine bay is dirty, clean it before shooting any photos.
| If you’ve decided to do a direct-to-dealer sale, you can skip ahead here to Step 8! |
Step 5: Advertise Your Car
At this point, it’s time to list your car for sale. Here’s what to include in the advertisement when you post your car online.
How to Create an Effective Car Advertisement
Although photos are essential, they’re not all you need for an effective online car advertisement. You must also write a compelling description of the car. When writing, consider the facts that would motivate your interest.
- Describe the notable features of the vehicle. Cover the year, make, model, trim, and any unique features like all-wheel drive and any other features adding to your car’s appeal.
- Highlight key points, such as low odometer mileage, or if you are the original owner.
- Personalize the description. If it’s an SUV, explain how your family enjoyed a vacation to the mountains or the beach. Praise its roominess and comfort. If it’s a compact car, applaud its easy parking and its high fuel economy.
Autotrader makes creating an online listing easy. When you create your ad, we already have common selling points listed for you. Select the phrases that match your car.
Check Other Boxes
Make sure to mention any modifications or any recent service. For example, it’s worth mentioning the new set of tires you just mounted on the car. It’s just as important to point out flaws, such as unusual noises or malfunctioning air conditioning.
Remember, you dictate the final transaction price. When creating the listing, if you have specific payment terms, be sure to include them. If you’re open to offers, make sure you note “OBO” (or best offer).
If the advertised price is firm — that is, you won’t negotiate the price — you should include that in the ad. If you insist on a cash deal, say “cash only” so you don’t get any buyers with weird ideas about payment plans. Buyers will want to know the car’s ownership status, so mention whether there is a lien (loan balance) on the car or if you have the title in hand.
Step 6: Answer Your Texts or Emails
After placing your car for sale, you must interact with potential buyers. In other words, answer your email or texts. Responding promptly and politely is critical. Shoppers will always have questions that need answering before considering your car further. Second, yours probably isn’t the only vehicle they are considering. If you are unresponsive, even the most interested shopper may move on to the next car on their list.
Step 7: Schedule Test Drives
If you’ve answered a shopper’s questions satisfactorily, the next step is to schedule an inspection and test drive appointment. This is not only where the rubber meets the road, but also when you assume a degree of risk.
Most potential buyers will want to see the vehicle in person, take a test drive, and maybe even have it inspected by a mechanic. Who are these strangers with whom you will meet and hand your car keys to? You can’t avoid this interaction. However, you can take some precautions.
Stranger Danger
Unless you live in Mayberry, it’s likely you aren’t acquainted with the potential buyers who want to test drive your car. We suggest taking some precautions to ensure your safety, as well as your car’s safety.
- Telephone interview: A phone call with a potential buyer is an opportunity to provide information about your vehicle and answer the shopper’s questions. However, it’s also an opportunity for you to vet the caller while laying out the ground rules for the rest of the buying process. Before you take the first shopper’s call, you should have already decided on the form(s) of payment you will accept, such as cash or escrow service. This is the time to inform the caller of the required form of payment. Additionally, if you are scheduling a test drive, outline any ground rules for it (see below).
- Inspection or test drive: Even in this day of doing business over the internet, most serious shoppers will want to lay their eyes and hands on your car. Here, you must weigh inconvenience against security. Never invite a total stranger to your home. To minimize the threat, we suggest arranging to meet the potential buyer at a third-party location, preferably a public parking lot with plenty of traffic or in front of a police station or city hall. Furthermore, we recommend inviting a friend or adult family member along. When arranging the meeting, inform the potential buyer that you will need to see their driver’s license and snap a photo of it with your phone. Know the area around the scheduled meeting location and have a test-drive route in mind. Insist on riding along on the test drive.
- Other precautions: Any paperwork the potential buyer wants to review, such as maintenance records, should be copies or the originals with any personal information blacked out. In other words, don’t share your address or other personal information that might lead to identity theft or some other fraud.
Step 8: Finalize the Deal
The ideal outcome of a completed test drive is for the shopper to make a serious offer to buy the car. If your asking price exceeds the lowest (floor) price you are willing to accept, you will need to negotiate a final price based on your floor price and the offer.
What Is the Safest Payment Method When Selling a Car?
There are several ways to exchange funds in a peer-to-peer car sale. Each poses some risk for the buyer, the seller, or both. Using an escrow service is often considered the safest option. The buyer’s money is held in escrow until the vehicle transfer is complete. While the service is secure, it’s also pricey. A typical fee is 2% of the transaction. That’s $500 on the $25,000 selling price of a car.
How to Exchange Funds for a Used Car
| Cash |
| Cash, while straightforward, involves a high amount of risk when exchanged between strangers. Cash is the quickest form of payment, and the most untraceable. |
| Certified Check |
| A certified check is a personal check that has been verified to be legitimate by the payer’s bank. Accepting a certified check opens the door to fraud. Though this method is safer than cash, we recommend against accepting it. |
| Cashier’s Check |
| Treated by most banks as cash, a cashier’s check is issued by a bank against its funds. The issuing bank transfers the check amount from the buyer’s account into the bank’s account before issuing the cashier’s check. Still, cashier’s checks can be fake. Verifying with the issuing bank beforehand. Review the stipulations for accessing the funds with the issuing bank or your own. Imagine selling the car and being unable to access the funds immediately. |
| Escrow Service |
| In this scenario, the buyer deposits the negotiated transaction amount into a third-party account, where it’s held until the vehicle exchange is complete. It provides a high degree of security to both buyer and seller. However, the fee can often be as much as 2% of the transaction price. |
| Bank Transfer |
| Here, the buyer’s bank transfers the transaction price to the seller’s bank. It’s safer than exchanging cash and doesn’t have the room for fraud that a cashier’s or certified check does. The two downsides are: First, the buyer must trust the seller to fulfill the vehicle exchange. Second, the exchange may take 24 hours or more to complete and involves a transfer fee. |
| Digital Payment Platforms |
| Operating in a manner similar to bank transfers — but nearly instantaneous — digital payment services like Zelle, PayPal, and Venmo provide a secure way to transfer funds. The downsides are that both parties must have verified accounts, there may be transfer limits, and you will need to check beforehand whether the transaction falls within those limits. |
Transferring a Car Title
Transferring a title is the buyer’s responsibility. As long as you have a free-and-clear title to the vehicle, you must fill in the owner’s and seller’s portions of the title and hand it off to the buyer. If your state requires a bill of sale, you’ll need to fill out the appropriate form, sign it, and have the buyer sign it. Keeping a signed copy for your records is a good idea.
A title transfer becomes more complicated if it involves a lien. That is, if you still owe a balance on the car loan or if you used your car as collateral on some other financial commitment. In this case, the best course of action is to complete the transaction and the vehicle handoff at the lender’s offices. Otherwise, the buyer must trust you as the seller to pay off the outstanding loan balance, obtain the title, and then forward the title to the buyer. That’s a lot of trust.
The Best Way to Sell Your Car Peer-to-Peer
Nearly every negative aspect of a peer-to-peer car sale detailed above can be avoided with Autotrader’s Private Seller Exchange.
What Is the Private Seller Exchange?
Think of Private Seller Exchange as an unbiased broker, providing a robust and secure marketplace for peer-to-peer car deals. Consequently, it benefits both the seller and the buyer. The exchange is designed to allow car sales to take place directly between a private seller and a private buyer without sacrificing convenience, speed, or security. It creates a bridge of trust between seller and buyer through communication, investigation, and verification, aspects of which are all overseen and validated by Autotrader. This includes guaranteeing the integrity of the money exchange.
Private Seller Exchange (PSX) is a platform where buyers and sellers can select the services they want from a list covering virtually every step of the car sale process. Every aspect of the sale, except the test drive, can be completed on a smartphone. And PSX will even help set up the test drive.
Among the seller services, it provides access to thousands of car shoppers, price guidance, help writing the ad, bringing top dollar for the vehicle, secure payment service, scheduling the test drive (time, place, etc.), no-hassle title transfer, and more.
For buyers, available services include a large inventory of cars for sale, access to sellers, help arranging test drives, payment facilitation, lien-free title, no-fuss title transfer, access to gap insurance, private-party pricing, and more.
To get started, all a buyer needs to do is browse the used cars for sale by owner on the Private Seller Exchange and pick a car, truck, or SUV from the inventory.
Editor’s Note: This article has been updated since its initial publication. Austin Morris contributed to this report.
I want to buy a car through AutoTrader site. Besides Vehicle License and Title Transfer fees imposed by states, does AutoTrader/PSX charge any fees to the BUYER? If so, what is the cost to the buyer?
Hi Janis. Buyers a documentation fee that varies by state from $80 to $400. That fee partially covers the services and costs for the following:
Ensuring the transaction is secure and finalized
Preparing Documents (so you don’t have to!)
Title Delivery to you or your lender (when applicable)
Temporary permitting that allows you to drive your vehicle legally until your permanent plates or tags arrive by mail.
so the ad wont let me list my phone number, how will buyers contact me?
Hi Doug. Instead of giving out any of your personal contact info, you will receive messages and test drive requests from buyers through PSX, and you can respond through the site or mobile app.
How long does the ad stay up
Thanks for reading, Loida. Generally, your ad will run, until your vehicle sells or until we determine that your ad has become inactive, which is based on your lack of response to inquiries from potential buyers.
I am getting multiple potential buyers who don’t ask any questions or request to see the vehicle in person, as they are from out of state area codes. Worse, they promise to purchase at my asking price and then ask for name and address to send the “cashier’s check/bank check” to, not contract…sight unseen. Sounds VERY fishy.
You are right to be skeptical, it’s a scam. Once you give them the keys and sign off on the title and the check bounces you are stuck with no car and no money. Some scams are more elaborate but still end up the same.
I haven’t found a way to share my Autotrader ad on social media sites. Is that possible?
I have gotten 5 responses so far but they either want me phone number or email to ask questions. Why don’t they just ask on the Autotrader site? I don’t feel comfortable giving that info out.
How long does the ad stay up?
It would be great if you could instruct a seller how to attach a carfax report
When you sell a car privately using Autotrader, a free vehicle history report is automatically included with your listing. You won’t have to do anything to attach the report to your listing; it is available to be viewed by anyone once your listing is published and live on the site.