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Precautions to Take - Selling Car

1977 Views 13 Replies 10 Participants Last post by  1972ford
Hi All,

wanted to get some advice on selling my X3 privately.

What are 4-5 basic precautions I should take to avoid getting ripped off, transferring title correctly, paying proper taxes, etc...?

Obviously a valid driver's license is in order, but does my insurance cover them in a test drive? What kind of payment should I ask for, and how do I make sure it's good? Any and all constructive advice is appreciated. If I am selling it to someone out of my state do I go to my DMV a notary republic, etc..... or if they are nearby is it easier to go to their state and do the paperwork?

Maryland's laws are so screwy I want to also make sure everything transfer's correctly to the new owner and any taxes or fees are paid correctly so as not to financially burden myself or the buyer.

I have not bought a car privately in years. Pennsylvania is easy, but everything MD does is a real PITA.
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Not sure about the insurance question, but every time I've sold a car privately, I've required a bank cashiers check, and to provide extra security, I've always had the buyer meet me at my bank so we can transact in a "safe" place and my banker assures me the funds are good.
one more thing - I always write a pretty basic receipt of sale. I keep it fairly short, but mention the car model, make, year, VIN, mileage and price and always write "sold as-is" with no warranties. I figure that might keep me out of hot water should something unforeseen happen after the buyer takes the car.
I agree with "jrapo" on the funds: certified bank check or wire transfer, with funds confirmed by your bank, is best. Cash works too, but with the dollar amounts you're talking about here, that's probably impractical... I personally would even accept a personal check -- if the buyer is willing to allow time for the check to clear before taking possession of the vehicle. As "jrapo" also suggests, a bill-of-sale, signed by both parties (and perhaps even notarized), is also a good idea. It doesn't have to be anything elaborate; just a sheet of paper briefly detailing the vehicle and the agreed selling price.

Your insurance agent should be able to answer the question about coverage during a pre-sale test drive. I would think you'd be covered, either by your insurance or that of the potential buyer, but...? :dunno:

Within-state transactions are relatively straight-forward; as I recall, the People's Republic of Maryland requires a 'safety' inspection prior to the title transfer? Sometimes the seller will acquire that to entice potential buyers, but ultimately I believe it's the buyer's responsibility. Having never transferred a vehicle to/from another individual during the time I lived there, I can't recall if Maryland requires a notary to transfer the title...? :dunno: Perhaps the best thing to do is meet the buyer at a nearby MVA office and take care of everything right then and there...?

Out-of-state transactions can be more involved, depending on the state of origin and the state to which the vehicle is being transferred. Different states seem to have different paperwork expectations, so you'll have to handle that on a case-by-case basis. Perhaps the only thing you need to know is what the expectations of Maryland will be in order to smoothly transfer the title to another state (notarized title signed over to the buyer, etc.)...? I'd check with the MVA. Regardless, the out-of-state purchaser will need to obtain a temporary/transit plate (usually cardboard) and registration, issued by Maryland in his name; don't agree to let the buyer drive off with your plates under the promise he'll mail them back to you; as I recall, Maryland expects you to turn them back in if the plates are not transferred to your new vehicle.

In the case of either transaction, if you don't witness the transfer yourself (e.g., buyer insists on taking the vehicle back home before transferring it), most states offer a form or some way to notify the MVA that the vehicle has been sold. I would look into that, as the procedure varies from state to state. This is designed to protect the seller, in case the buyer does not submit the paperwork to transfer the vehicle like he's supposed to do. If the vehicle is involved in an accident (or worse yet, some sort of criminal activity), and it's still registered/titled to you, they come looking for you first with any issues...

I don't think you have any tax obligations, as the seller; at least not so far as the sales taxes go. That's the buyer's concern, and he'll typically pay those only in the state in which the vehicle is to be registered/titled.
keep in mind, any time you walk into a bank (or any retail establishment for that matter) with $10,000 or more in cash, you will be required to complete a federal form documenting the cash. This is done to notify the government of the large cash transaction to control money laundering. That's the #1 reason why people shouldn't be transacting in cash when in excess of $10,000.

You should stick with certified funds (cashiers check) for the safest and most convenient transaction for both parties involved.
Ah, that's true. Good point!
keep in mind, any time you walk into a bank (or any retail establishment for that matter) with $10,000 or more in cash, you will be required to complete a federal form documenting the cash. This is done to notify the government of the large cash transaction to control money laundering. That's the #1 reason why people shouldn't be transacting in cash when in excess of $10,000...
I just sold my 04 M3 yesterday to a guy from Bosie,ID and we did a bill of sale and $1000 deposit and then a week later when he flew here here and brought the remainding amount on a cert. bank check. I have done this several times and it's a fast easy process.
I've sold three cars on private sale and purchased 5 on private sale.

I always have a signed, notarized bill of sale stating the VIN, mileage and no warranty implied by seller.

I always provide/accept certified bank check or wire.

Complete the local sales transfer form that the DMV wants to see when you register the car with the new title.

Pretty simple really. At least in the states I've dealt with: OH, KY, AL, MI, PA.
Have a professional bill of sale specific to your state. Make sure it indicates as is, no warranty implied or otherwise. The biggest thing is to get a cashiers check for a local bank and go with the buyer to the bank to cash it. Do not let buyer drive it alone and ask to see drivers license and insurance prior to test drive.
Wire transfer is really easy, even though most buyers have never done one and can be put off by it. These days, scam artists commonly forge "certified" forms of payment, like cashiers' checks and bank checks. Pretty much every week, the federal banking agencies are sending out email alerts to financial system participants warning that instruments of such-and-such bank are being forged and presented in the market. Even with a legit cashier's check, the presenting bank (seller's bank) can encounter difficulties actually collecting payment for it from the issuing bank (buyer's bank), if the buyer goes back to the bank and raises certain issues. So there's really no way to take a certified form of payment to the seller's bank and get an on-the-spot determination of collectibility before turning over the keys and title. Even holding onto the title is no protection, since hot luxury cars are typcially sold on the international market where nobody cares.
Bank can verify check ahead of time

On my sale a couple months ago it was an out of town buyer who was coming on a Saturday. I had him email a scan of his banks check. I then called their bank and verified the check was in fact legit. I deposited it while they were with me that Saturday with no issues.
Funny, People here jump up and down that they are looking for an MT, but when it comes to actually buying one I had one PM. Guy never returned the e mail I sent or PM. His loss. The car is way under-priced compared to what it should sell for. I am also leaving the Alpine speakers in the doors, the carbon fiber roundels, and the custom aluminum pedals. I have to say I am a little disgusted/irritated.

At this point I am trading it in since my S4 has arrived and the extras I asked for have been applied and installed. I will be picking it up this Friday. If anyone is interested let me know asap.

Thanks for all your advice. If there is a last minute holler I will take a wire to a bank account.

BTW look to pay it forward for some freebies :thumbup:.
Why not list it on Craig's list? Sold my Acura MDX in a week on it and my Nissan Murano in 2 days. Both transactions were smooth as can be. Highly recommend it!
I think most people who say they really want (or wanted) a manual might *prefer* it, but aren't really bothered by the alternative so they go with what's a good deal when they need/want a new car. Others (myself included) will ONLY consider manual cars when looking and therefore must be more patient. When I see a car listed as "automatic" it might as well say "has been hotboxed daily" or "salvage title" as far as I'm concerned. Next!
Funny, People here jump up and down that they are looking for an MT, but when it comes to actually buying one I had one PM.
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