How to Protect Yourself when Selling a Used Car

a line of yellow, red, and green cars with dollar bills flying down on top of them

When you are selling a used car, you need to ensure that you get the best price and not get ripped off. Thousands of people sell their used cars privately each year, and only a small percentage of these will have any problems with their buyer. However, you certainly don't want to be included in that percentage, so follow these tips for a safe transaction, and always trust your instincts.

Meet in Public Places

If you don't want to give your home address out to a prospective buyer then arrange to meet them somewhere public with lots of people around, such as a local mall or parking lot. Be careful when choosing a location, however, as in some public areas it is prohibited to engage in commercial activities. If you do decide to meet the buyer at your home, let someone else know the prospective buyer's details and the time you expect to meet them, or ask someone else to be present during that time.

Test Driving

Opinions on whether you should go along on a test drive with the buyer or not are mixed, but if you don't go along, you are putting a lot of faith in a stranger to return your vehicle. If you do decide to go on the test drive, make sure you take your cell phone with you, and if possible, have a friend follow you just in case anything happens. Alternatively, you could ask the buyer to leave their own car keys behind as security although this is not a good idea if the car you are selling is of a significantly higher value than theirs. Before allowing anyone to go on a test drive, you should check that they have a full and valid driving license.

Mechanical Repair

Before selling a used car, you should try to make sure that it is in the best mechanical state possible. Get all of your paperwork in order and ensure that you have copies of any documentation for parts that were recently replaced or any manufacturer's warranties that are still valid. Keep copies of this documentation just in case the buyer claims that the car has broken down after purchase. Make sure that you are clear in your advert about any issues with the vehicle and offer to let the buyer have a mechanic check the car prior to purchase.

Bill of Sale

It is possible to download a legal contract or bill of sale for a vehicle from the Internet or you could consult with an attorney. Having a legal contract offers you protection and you should make two copies, one each for you and the buyer. Insert an “as is” or “sold as seen” clause to prevent any problems caused by later complaints about the vehicle.

Transfer Registration

If possible go with the buyer to arrange the transfer of the vehicle registration. Once the transfer is complete and the buyer has their temporary tags, remove your own license plates and registration sticker from the vehicle. If you can't go with the buyer to arrange the transfer, check whether your state has an online registration form where you can advise them of a change of ownership. Normally this must be done within 30 days of the sale, but you should do it as soon as possible to protect yourself from being held liable for any accidents or tickets the new owner receives.


The whole point of selling your car is to get the money, so make sure that you don't become the victim of a fraud. Be clear in your advert what forms of payment you will accept. Cash is the best form of payment, but sometimes the value of the transaction is too high. If you accept a personal check, then you need to make an arrangement with the buyer to complete the sale after the check has cleared, which may not be acceptable to them, as they want to protect their own interests. A cashiers check is the best form of payment, but it is also possible to forge them so consider meeting at the buyer's bank, where you can witness the check being certified.