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How to Sell a Car to a Friend (Plus Alternatives to Consider)

Marc Skirvin
Marc Skirvin

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Has the time come for you to sell your used car? Options may include trading it in, selling it to a stranger, or selling it to a friend.

With respect, your friend may show interest in buying the car. But you may be asking, ”Will that person still be my friend after the transaction is done?”

The process of how to sell a car to a friend can be long and difficult. Knowing how to handle the sale correctly will ensure the transaction goes smoothly. Avoid tension by being clear about the nature of the transaction and the car’s condition.

So, how do you go about the process? Here is all you need to know about friendships and sales. Follow this guide to save money and time for you both.

Determine the Kind of Transaction You Want Make

First, determine if you want to donate the car to your friend. Or if you are more interested in getting the most cash for your used car.

There are times when the philosophy ”a friend in need” works. But in most cases, it doesn’t.

The most common reason why people sell their cars is to pay off their current car payment. So, research online to know the fair market value of your vehicle.

Then make a comparison based on your friend’s ability to make payment. Consider the condition of your car in terms of repairs, mileage, and other factors.

Decide on an agreement about the price in advance if you want to help your friend. Knowing your needs and what your friend can afford will make the transaction easier.

Don’t accept installment payments in exchange for the car. This exposes you to negative outcomes if your friend fails to clear up the rest of the amount. Know in advance how much you are willing to take if they cannot fully compensate you for the car.

Full Transparency

When selling a car privately, be open and honest with your friend about the car’s condition. Transparency helps to preserve goodwill.

Disclose any damage or accidents upfront. Don’t let them discover such issues of their own later.

Inform them about any issues with the car, like windows not rolling up properly or a bad engine. This doesn’t mean that your friend may say no to a car. Instead, they will be grateful and go ahead with the transaction.

Give them a detailed report on any mechanical issues the vehicle has had in the past. Be honest with them about the reason for the sale.

Are you selling because you don’t need it? Is it an extra car that you want to get rid of? Do you want to start using public transportation?

All this will help to ensure transparency. After all, you are selling to your friend, so you have nothing to hide.

Also, make sure you highlight the positives about your car. It may have a brand new sound system, new tires, or tinted windows. Market your car by mentioning the great assets it has.

Be clear about any future repairs. It’s good to inform them about any unresolved problems the car has.

For example, the vehicle may need a new battery or tires soon. Letting them know will help you agree on a price that’s fair to both of you.

Arrange for a Car Inspection With the Local Mechanic

Identify a trustworthy mechanic to conduct a car inspection. It will help you avoid selling a car with major difficulties to your friend.

Make sure you are both present during the inspection. That way, you and your friend will be clear about the condition and shape of the car. If repair work is necessary, discuss the details and decide how it may affect the price.

Inspection done by an experienced mechanic will help you know if the car is worth your set price. It opens the doors to negotiations. You’ll be able to give your friend the best offer and avoid potentially ripping them off.

Suggest a Vehicle History Report

A vehicle history report will help you determine the asking price. That depends on the condition of the vehicle.

As a seller, you have better knowledge of your vehicle’s past. But your friend does not have that knowledge.

The history report will show hidden damage that a mechanic may not have identified. It may indicate that airbags were deployed, which will give both of you an idea of the severity of the damage. It helps to distinguish between vehicles with clean histories and salvage vehicles.

The report will also show your friend the estimated mileage of the car. It will provide the service history, such as vehicle recalls and repairs.

Vehicle history reports are common tools that buyers use to make informed decisions. Your mechanic will do a thorough inspection to confirm the information on the report.

Ensure You Have All the Documents Before Selling Your Car

The best way to sell a car to a friend is to treat it as a business transaction. As the seller, you need to present some paperwork.

The paperwork may be little or lots, depending on where you live. Here are some of the documents you need:

Vehicle Title

A title is the most vital document to prove ownership of the vehicle. Make sure you have it before selling a car to a friend. You owe it to your friend to give the title to them.

If damaged or lost, go to the vehicle title office or DMV to get a duplicate title. You have to sign it over to your friend to complete the sale process. It proves that you have released your claim to the vehicle.

Transfer of Ownership

When selling a car to a friend, it’s important to transfer ownership of a vehicle to the buyer’s name. Ensure that all legal liability of the vehicle is transferred to your friend.

The process usually involves applying for RC transfer in 14 days within the sale of the car. It is your responsibility to apply for a transfer of ownership. You’ll be required to produce some documents.

Once you sell your car, find out if the transfer has gone through. You don’t want to complete the transaction and find out later that you are still liable for the vehicle. When checking transfer status online, you’ll need the chassis number and registration number.

Bill of Sale

Selling your car to your friend requires a lot of preparation. Most people tend to overlook the importance of a bill of sale once the transaction is complete. But it’s an extremely crucial document when selling your car.

It offers legal protection to the seller and buyer. It proves that the transaction took place. These details are necessary, and in case of anything, you’re able to prove that you notified the buyer.

Furthermore, you will not be responsible for any speeding and parking ticket. When creating a bill of sale, make sure both parties sign it.

Warranty Paperwork

If your car still has a warranty, you can transfer it to your friend. It’s a good reason to increase your asking price.

Even though they are your friend, you need to treat the sale as a business matter. So, don’t feel guilty when you increase that price.

Confirm that the warranty is present. Give your friend contact information for the provider of the warranty.

That way, they can contact the warranty department to know the balance of the warranty. They will also be able to transfer it to their name.

Maintenance Records and Paperwork

Maintaining your car is vital to keep it in good running condition. A regular maintenance schedule will save you hundreds or thousands of dollars. It prevents problems from escalating into big ones.

Keeping vehicle records will help you keep track of repair and maintenance. It will be easy to inform your friend when the mechanic checked the hoses and when you last changed the oil.

Such records can increase your resale value. Most people want to know if the car is in good condition or not.

Having records is proof enough that you took care of it. So, your friend will most likely pay the asking price.

Can I Sell My Leased Car to a Friend?

If you have leased a car and want to end it early, it’s possible to sell it to a friend. Selling a car privately requires you to know the payoff amount.

Find these details from the leasing company. They will let you know the amount you owe presently for the vehicle.

Confirm that the amount you owe is less than the vehicle’s total cost. You can buy the car from the leasing company to get the most profit. Then sell it to your friend after getting the title.

But if you cannot afford to purchase the vehicle, have your friend pay the lease. The leasing company will send the title to you, and you can sign it to your friend.

Either way, it’s a win. Your goal is to get out of the lease and sell your car at your profit.

Mistakes to Avoid When Selling a Car to a Friend

Your friend is interested in buying a car, and you have no problem selling it to them. But do you want to remain friends after the same process?

If so, you need to avoid common pitfalls when preparing to sell your car. Here are the most common mistakes you should avoid.

Not Knowing the Value of the Car

It’s your job to find out the value of your vehicle before you even start looking for a buyer. Many free online sites can help you get an estimate of the value of your vehicle.

Such sites will help you price your vehicle more competitively. You will make a good profit out of the sale.

Fixing the Car Before Selling It

It’s normal to want to sell the car to your friend when it’s in the best condition possible. So, you may be tempted to do minor and major repairs in advance.

But this may not be necessary. You can confidently sell the car to your friend as it is.

They can fix it later at a price. You can negotiate the cost of repair before they pay the final price.

Letting Your Friend Borrow the Car Before Buying It

You may want to share the car with your friend before reaching an agreement. But this could be a costly mistake. It could even mark the end of your friendship.

When your friend asks to borrow your car, say “no” politely. You need to ensure the sale remains a business transaction and nothing else. Your friend should understand that you need to keep things professional.

Being Dishonest

You want your friend to be professional when buying the car. It means you have to be transparent and honest with them. Let your friend know if your vehicle is failing. For instance, if it needs brakes or a new starter.

Disclose every single detail in advance. It’s not worth it to lose our friendship due to dishonesty on your part.

Not Having All of Your Paperwork in Order

As stated earlier, you must give your friend all the necessary documents. It means you have to do some legwork and computer work to get everything in order.

Thankfully, we live in an era where you can download almost everything from the internet. Apply for all the necessary documents.

Having missing disclosures and other required forms could delay the sale process. So, before you tell your friend that your car is up for sale, get all the paperwork required ready to go.

Use the Above Tips on How to Sell a Car to a Friend for a Smooth Process

Follow the above steps on how to sell a car to a friend to get the most profit. Research to know the value of your vehicle before selling it.

Let your friend know that this is a business transaction from the start. It will help to avoid any misunderstandings.

Here at Cash Auto Salvage will help you discover tips and tricks to get the most value out of your junk car. We offer in-depth details on how to sell a car auto parts common problems and other car selling tips.

Contact us today for more information about our services.

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About the Author

Marc
Marc

Marc is the Co-Founder of Cash Auto Salvage and Director of daily operations. He retired from a leading Internet Marketing company in 2013 and has been involved in the automotive industry ever since.

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