“I want to sell my car to a private party and am not sure about the steps involved in selling a used car to a private party. What happened is that I can no longer afford the monthly payments on my 2003 Honda. I just started advertising if for sale and would like to know if there are other costs involved when a private party sells a used car to another private party. I am aware that buying a car from a car dealer involves sales tax, transfer of title, registration fee’s, etc. But since I want to sell my car myself, I need to know what happens after the buyer and I agree on a price? I realize of course that I will need to get the payment from them and then I have to pay off the loan, but then what else happens?”

A reader submitted the above questions on I want to sell a car to a private party…

Okay so lets break down your questions into bite sized chunks here.

• Sales Tax: The buyer pays the sales tax at the DMV (or whatever you call the government agency that handles car paperwork where you live).

• License and/or Registration Fee’s: Its a little more difficult to sell a car if the license or registration fee’s aren’t current. Just know that the buyer may try to negotiate with you to either get that current or they will want to deduct some off your asking price so they can pay it themselves.

• Transfer Of Title: The transfer of title fee is paid by the buyer.

• Release Of Title: You need to pay off the car loan so you can get the title because the lender will not release the title to anyone until your loan is paid off. After you agree on a price with the buyer, then I suggest you make up a little agreement for them to leave you a non-refundable deposit on the car because no one is going to want to fork over X dollars for a car that isn’t going to be really their car. And it won’t be their car until they get the car, the keys, and the title. You can always ask them to come right with you to the lenders so they can be their when you pay off the loan.

• Smog and/or Safety Checks: Some states/countries require you to get a car smogged and possibly a safety check too. You need to check with your DMV to see what the requirements are for your state. For example; in California they require a smog certificate whenever you transfer a car. In spite of that fact that most people think the buyer is supposed to provide a smog check, the fact is that legally its not the sellers responsibility to have the smog certificate. However it can be difficult to sell a used car without one because most buyers know that it can be a major hassle (and expensive) trying to get some cars smogged.

Thats it for answering your question on I want to sell my car. Just know that most of it is negotiable and it is up to you as the seller to know how far you are willing to give…or not. Also, most states are pretty much caveat emptor (buyer beware) so the burden is really on the buyer to know if the car they are buying is any good or not.