How to sell your car: A guide

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In a Nutshell

Whether you’re planning to sell your car to a private party or dealership, doing some upfront research, optimizing your car listing and negotiating the price can help you maximize how much cash you get in the sale.

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Trading your old car in at the dealership may be one of the simplest ways to get rid of it, but it might not net you the most cash.

Understanding the ins and outs of how to sell a car can help you speed up the process, minimize the stress and get as much cash as possible out of the sale.

Here are seven steps to follow to sell your car, from deciding where to sell it to closing the sale.


  1. Decide where to sell
  2. Gather all your documents
  3. Set a selling price
  4. List the car and screen potential buyers
  5. Take advantage of the test drive
  6. Negotiate the price
  7. Close the sale

1. Decide where to sell

Before you do anything, you’ll need to decide where you want to sell your car. You have three main options.

  • Sell it to a private buyer
  • Sell it to a dealership
  • Trade it in at a dealership for credit toward a new car

Selling your used car to a private party can require a lot of work. Not only do you have to advertise the vehicle, but you may need to take phone calls from interested buyers and go with them on test drives.

And if you buy a new car before selling your old car — and you still owe money on your old car — you might find yourself dealing with two monthly payments.

While it isn’t easy, you’ll typically get more money selling your car to a private buyer than if you were to sell to a dealership. Unlike a private buyer, who is typically looking for a car to drive, dealerships typically plan to turn around and sell the car for as much of a profit as possible.

Depending on the car, you could lose out on hundreds or even thousands of dollars by selling or trading it in to a dealership instead of a private buyer. But you don’t have to worry about the hassle of putting up ads or dealing with strangers if you sell the car to a dealer — simply take the car to the dealership.

If you plan to trade your used car in, you may be able to use its value as a down payment or credit toward the new car. If you still have a loan out on the car, some dealers might pay off the old loan for you when you trade in your car — but if you owe more than the trade-in value of your car, you’ll still be responsible for paying off the loan.

2. Gather all your documents

Whether you plan to sell your car privately or to a dealership, you’ll need to gather some information, including your title, maintenance records and original sale documents.

To transfer ownership of the car to a private seller, you’ll need its title. If you haven’t paid off the auto loan, the lender will likely hold the title until you do. Get in touch with your lender to find out what you need to do to arrange the sale and paperwork — the buyer may need to make a check out to your lender to get the car’s title.

Also, check your state’s department of motor vehicles or transportation agency website to see if you need to complete any other forms for the transfer of ownership, like a bill of sale, odometer disclosure statement or a notice of release of liability.

It can also help to have a record of the car’s maintenance schedule to show that you’ve been taking care of it.

Lastly, the original sale documents will describe any optional features you added to the car. This list will come in handy as you estimate your car’s fair market value in the next step.

Collecting all the paperwork you need early on can you help speed up the process of selling your car. It may also help you avoid any hiccups when you’re trying to close the sale.

FAST FACTS

Should I order a vehicle report to show prospective buyers?

A vehicle report from Carfax or Autocheck can give buyers a history of the car, including damage or accidents and how many owners it’s had. Having a clean report in hand can put a potential buyer’s mind at ease. These reports might cost between $10 and $40.

3. Set a selling price

Regardless of where you plan to sell the car, doing some research can help you set expectations around how much you can expect to get for it.

Websites like Kelley Blue Book and Edmunds may tell you what private sellers in your area are asking for your make and model. These sites can also give you an idea of how much dealers in your area are offering for a trade-in of similar cars.

If you’re selling your car to a private party, you can base your sale price on the estimates you receive. Some buyers may want to negotiate on the price, so consider setting it a bit higher than the car’s market value to start.

If you’re trading in your vehicle, that value can give you an idea of what to expect when you get to the dealership. But expect the dealership to do its own appraisal and give you a price based on what it thinks the car is worth.

4. List the car and screen potential buyers

If you’re planning to trade your car in with a dealership, you can skip this step. But if you’re selling to a private party, there are several places you can list your car online, including websites like Craigslist, Cars.com and Autotrader.

Boost your car’s curb appeal first

Making a good first impression is essential. Take some time to clean both the exterior and interior and consider having your car detailed. If the car needs some minor repairs or maintenance, think about spending some money to fix it up.

It may also be worth it to have a mechanic run a check to make sure there aren’t any major issues. You may be able to use the information to win over a buyer who isn’t sure or plans to do their own comprehensive inspection.

Create a detailed listing

For your listing, take a handful of pictures of the vehicle from various angles and with good lighting. Consider adding some photos of the odometer and under the hood.

Share a brief description of the car’s year, make, model and other basic details. Be honest about the condition of the vehicle and include the vehicle identification number, or VIN, so buyers can get a vehicle history report. Then state your asking price and whether you’re willing to negotiate.

Screen potential buyers

Once your listing is up, you may start to receive messages and phone calls about the car. Unless you’re willing to carve out time for each one, consider screening them.

Ask for callers’ full names and let them know which forms of payment you accept. Be careful though: If they start off the conversation with a low offer or ask about paying in installments, entertaining them may end up being more trouble than it’s worth.

5. Take advantage of the test drive

Set up test drives with potential buyers in a safe, public place (perhaps best during daylight hours). Plan always to accompany them for the ride, and have a friend or family member join you, as an extra safety precaution. Take the opportunity to share what you know about the car and be ready to answer any questions they might have.

Also, try to get to know potential buyers better and understand what they’re looking for in a car. This can allow you to talk about the vehicle’s strengths and validate your asking price. But avoid trying to sell too hard, which can turn them off.

Some buyers may want to take the car to a mechanic for an inspection. This is a normal practice, but let the buyer pay the bill.

6. Negotiate the price

Whether you’re selling to a private buyer or a dealership, brushing up on your negotiation skills can help you secure a higher sales price.

Keep the pricing estimates that Kelley Blue Book and Edmunds calculated for your car in the back of your mind and decide on the price range you’re willing to accept.

If you’re trading in or selling to a dealership, consider getting quotes from multiple dealerships in the area to give you some leverage and help make sure you get the best price for your car. And feel free to counteroffer with a higher trade-in amount. Dealers typically begin with a low offer.

With a private-party sale, remind the potential buyer of your asking price and willingness to negotiate, then let the buyer take the lead. If they won’t offer an amount within your acceptable range, be ready to move on.

Keep reading: How to negotiate your car price

7. Close the sale

Once your hard work has paid off and you’re ready to close the sale, it’s time to finalize the paperwork.

To close your private sale, you’ll need to sign over the title to the buyer and sign any paperwork your buyer will need in order to register the title in their name. Depending on the state, these documents may include …

  • A bill of sale
  • An odometer disclosure statement
  • A lien release

Your state may also require you to …

  • Submit a release of liability or notice of transfer form to your state’s department of motor vehicles or transportation agency (this could help cover you if, say, the buyer gets a ticket before transferring the title and registering the car in their name).
  • Cancel your car’s registration.

If you’re selling or trading the car in to a dealer, you’ll need to sign some paperwork to finalize the sale. If you’re buying a new car from that dealer and getting a credit for your car’s trade-in value, double check that the credit is accurately listed in your sales contract.

As a final step, make sure to remove the car from your car insurance policy once you’ve completed the sale and cancelled your registration.


Bottom line

Selling your car doesn’t have to be a stressful experience. Learning how to sell a car and taking the time to do your research and compare offers can help you get a deal on your car that you feel good about.

If you find you’re struggling to sell or trade in your car because you owe more on it than it’s worth, you might consider waiting to sell until you pay down your car loan. Depending on how the interest on your car loan is calculated and whether your car loan carries a prepayment penalty, making principal-only payments or paying a little more than your minimum each month could help you pay off your loan faster.

What is a principal-only payment?