Selling a car can be frustrating at times because it's very time consuming, that's why many people are tempted to sell to minors. However, when selling cars to minors you need to be very careful because there are lots of laws which make it very unfair to you. In fact, you should think seriously about ever selling anything to a minor.
There is nothing wrong with selling a car to a minor from a legal point of view. Minors are allowed to own cars and you are not breaking the law selling one to them. However, you are leaving yourself open to a lot of trouble in the future if you're not very careful.
The problem is that a minor cannot legally enter into a contract until they reach the age of maturity. The age of maturity is typically 18 although some states regard this as being 21. Selling a car is a contractual agreement, even if cash is paid for the car up front it's still a contract. A minor is not allowed to enter into a contract which gives them the opportunity to void the contract whenever they want.
A minor can only enter into a contract for essential items including clothing, shelter, and food. There is no way that you can safely sell a car to a minor.
Once a minor reaches the age of maturity they will be able to dispute the contract because they made the contract when they were too young to do so. This means that they can return the car to you and you are legally obliged to give them all the money that they paid regardless of the condition of the car.
The contract simply disappears because it was formed when the individual was under the age of consent, they simply weren't able to give their word or sign contracts.
When returning the car to you the condition is not important, this is a huge problem from your point of view. They could have crashed the car into a lamppost, but they can still return it to you for a full refund. If you refuse to pay, like most people would, then they can sue and possibly win. The law is designed to protect minors and this means that you should never sell a car to a minor.
The only reason that you wouldn't have to pay the money back would be if the minor fraudulently obtained the car. If he showed you a false ID showing that he was over 18 (or 21 depending on the state) then you can fight the case. The only other eventuality is that you either refund the money or wait to see what happens, but if they do sue then you will have to repay the money plus legal costs.
It's essential that you check the ID of anyone who buys a car. The only way that you should ever sell a car to a minor is if an adult is entering into the contract with them. The adult can be held accountable, but a minor cannot.