Private sale of my car... help?

**terces** · 06-01-2010, 08:18 AM

If you are both military I would check with the legal services available to you on the base. They may able to draft a document for you...and for free.

**disneysteve** · 06-01-2010, 08:49 AM

This doesn't address your question but do you own the car outright or do you have a loan?

Also, why can't he get a loan and do things the traditional way? Why should you become the lender and take on that risk?

**creditcardfree** · 06-01-2010, 10:14 AM

Despite financing you will need a bill of sale. You can find examples online and draft your own up unless your state needs something specific. Generally, the date, full name of seller and buyer, description of vehicle including VIN, and the amount of sale. Might need addresses as well.

I would highly encourage the buyer to get their own financing.

**Seeker** · 06-01-2010, 12:54 PM

Originally posted by creditcardfree View Post

Despite financing you will need a bill of sale. You can find examples online and draft your own up unless your state needs something specific. Generally, the date, full name of seller and buyer, description of vehicle including VIN, and the amount of sale. Might need addresses as well.

I would highly encourage the buyer to get their own financing.

CCFree is correct, in addition, title (the car's pink slip) must go through the local DMV with their change of ownership forms filled out. It may or may not be necessary for a smog check (not sure of which car years are affected, and your local State practices/laws may differ. Milage needs to be recorded in the DMV forms.

Without the proper docs it is possible that you (as the last recorded owner) would be held liable for any property damages incurred by your non-transferred auto, or even for parking tickets.

**disneysteve** · 06-01-2010, 01:02 PM

Originally posted by Seeker View Post

CCFree is correct, in addition, title (the car's pink slip) must go through the local DMV with their change of ownership forms filled out.

I would definitely not transfer title until the car is paid for. You need to make sure that the buyer maintains insurance in his own name while you maintain the title so that you aren't held liable for anything that happens. I would require the buyer to provide you with proof of insurance regularly until the car is paid for and you do transfer the title. And Seeker makes a good point about tickets. Insurance wouldn't cover those so you could get stuck with those if your friend doesn't pay them.

All in all, I would repeat that you providing the financing is a really bad idea.

**maat55** · 06-01-2010, 03:20 PM

This is an huge risk. I would sell it out right. Trust is one thing, good business is another.

**FHA Loan** · 06-01-2010, 03:36 PM

I don't care how much you "trust" this person, I would avoid what you're considering like the plague. Deals like these can ruin relationships (not to mention YOUR credit).

If your car is paid for or at least has equity then consider selling it to someone else. Or a simple way is to simply go to CarMax and see what they will give you for it.

**kork13** · 06-01-2010, 03:43 PM

Originally posted by terces View Post

If you are both military I would check with the legal services available to you on the base. They may able to draft a document for you...and for free.

That's a good idea, I didn't think of that... If they'll do it for us, that would be great.

Originally posted by disneysteve View Post

This doesn't address your question but do you own the car outright or do you have a loan?

Also, why can't he get a loan and do things the traditional way? Why should you become the lender and take on that risk?

I do own the car outright, which makes the sale much simpler. I paid off the loan I had on it over a year ago, and have the title/lien release in my possession.

He didn't go into details about not wanting a loan, and thus-far I haven't pressed it. Admittedly, I really would prefer him just doing a loan through a bank, just so it's not something I have to worry about for the next 3 years. We've not gotten into the nitty-gritty details yet (there's still over a month before I'd be selling it to him), but I suppose maybe I should ask about him getting a loan, explaining that it would be much simpler and of less concern for me... I dunno. I'm happy to help him out, and do trust him, which is why I even consider doing it without him getting a loan. But for my own security, maybe I should press the issue...

**Seeker** · 06-01-2010, 07:44 PM

Originally posted by disneysteve View Post

I would definitely not transfer title until the car is paid for. You need to make sure that the buyer maintains insurance in his own name while you maintain the title so that you aren't held liable for anything that happens. I would require the buyer to provide you with proof of insurance regularly until the car is paid for and you do transfer the title. And Seeker makes a good point about tickets. Insurance wouldn't cover those so you could get stuck with those if your friend doesn't pay them.

All in all, I would repeat that you providing the financing is a really bad idea.

Oops, yes, you're right DisneySteve; my advice to transfer ownership was not well thought out. I entirely agree with the bolded part.

The only time I actually did this was with a 13 year old auto that the buyer was paying full sell price with a banks certified check; and with my full documentation as to the repairs that it needed. Since he was a mechanic, he could repair the car from his part sources; and he was spending a whole lot less money for purchase and repair than I could get anyone else to agree to.

With all the above in mind, I too wouldn't sell to any individual if they could not finance it on their own or through some third party. They can borrow from a friend or whatever... you don't want to be held responsible for an auto that is not under your control. Especially when you will be so far away.

Without documentation as to the responsibilities, the owner essentially takes the risk that the auto may be stolen, damaged or ticketed. The owner of record is the true owner legally. Ownership begets responsibility; people tend to take care of their property.

Not to say your friend would deliberately do anything to the car, but it's a huge world out there. Cars are subjected to external forces. Even acts of nature can destroy an auto. Even if your friend gets auto insurance coverage, and the auto is totally destroyed, he would still need to get yet another car. Will he continue to make payments on the car that was destroyed?Too much risk to you as a seller.

Either sell it to someone who can get financing such that you can turn title over (and be done with it), or pay to have it stored for that time when you are in Japan.

Either of those options would be my recommendation.

**snafu** · 06-04-2010, 11:37 PM

When selling privately, be sure to add the clause 'selling as is' in the Bill of Sale. While I agree with DS, you are smart and able to assess the level of risk you are willing to assume.

**segmond** · 06-09-2010, 06:01 AM

You will be surprised how fast long standing friendships can come to an end over money. Put that car up forsale in the classifieds and ebay, if you can sell it off. Do it, tell your friend that you need the money. He can start saving that $500/month and buy another one when he is ready.

**cypher1** · 06-15-2010, 07:55 AM

Originally posted by segmond View Post

You will be surprised how fast long standing friendships can come to an end over money. Put that car up forsale in the classifieds and ebay, if you can sell it off. Do it, tell your friend that you need the money. He can start saving that $500/month and buy another one when he is ready.

I 100% agree with statement. I'd rather take a slight hit for a few hundred dollars less, but have the cash in my hands, than stretch out payments over time. You may not "need" the money upfront, but payments spread out seem to drag on. A whole other mentality may creep in, even if they're late on one payment. Family or friend and all, but business is business. Nothing personal, but they don't mix IMO.

**kork13** · 06-15-2010, 08:56 AM

Thanks to everyone for your advice. It looks like I'll be able to get the sale documents done up by my base's legal office, so that'll make it easy for us... And I talked to my friend regarding getting a loan, and although he's not totally happy to use a loan, it seems that he'll be going that route, which as most of you have mentioned, will make the entire sale simpler and less risky for both of us. Thanks again, all.

**disneysteve** · 06-15-2010, 09:06 AM

Glad to hear that, kork. You being the lender just wasn't a good idea.

Private sale of my car... help?