A man purchasing a car from a dealership

How To Sell A Car: What You Need To Know

Squeeze logo
April 6, 2021

Looking to trade your car in for some dough but don't know where to start? This is your step-by-step guide on how to sell a car correctly. Tips like fair pricing, effective advertising, and determining the right buyer will help you in your endeavor. 

Reasons you might be selling your car can vary. Reasons include: 

  • Car insurance premiums are sucking away your savings.
  • You're moving to a city.
  • Gas prices are too unpredictable.
  • You're taking it in for tune-ups too frequently.
  • You're getting too old to drive.
  • You'd rather commute by using public transit.
  • You don't drive enough to justify the costs.

Once you've decided to sell your wheels, it's time to get down to business. You may not be aware of the many factors that go into selling a car. Let's get into it.

Step 1: Identify your potential buyers 

If you are a newbie to the used car market, determining who to sell to is a great first move. Consider what's most convenient and logical first. Below is a list of potential buyers you should consider.

  • Friends and family
  • Dealerships
  • Online retailers

Friends And family 

Why not start with the people closest to you? Selling a used car to a friend or family member is probably the easiest option. They can potentially be tough customers, but you may run into less problems if you follow these tips. 

The one downside to selling a car to a loved one is that you might not make as much money on the car sale. This is especially true if you feel shy asking for a higher price from a friend or family member. 

It can also be tricky if the car has problems down the road. Your friend or family member could accuse you of selling them a lemon. The transaction could potentially cause arguments depending on the type of relationship you have with the person. Handling the sale properly reduces the risk of this occurring. 

  • Be honest: If you are selling them a 10-year-old car for a few thousand bucks, tell them that the car may not have that many years left. 
  • Provide the car’s full history: Disclose any previous accidents, damages, or issues. 
  • Independent inspection: Encourage your friend to get an independent inspection. 
  • Provide service records: Provide them with all service records. Even if you don't have receipts tell them the name of your mechanic and give them a list of the maintenance you remember getting done on the car. 

Honesty, transparency, and documentation is the best way to avoid potential conflict down the line when selling a car to a friend or family member.


This is ultimately the safest way to sell your car. Dealerships are experienced. 

The drawback of a dealership is that you might not make as much money off of your car as you would if you sold it through other means. Dealerships tend to underestimate your car and provide you with a lower offer. 

If you are interested in trading in your car, then a dealership is definitely a great avenue for you. Trading your car allows the value of your old vehicle to contribute to payments on your new one.

Online retailers 

The internet is always there, even when you're looking to sell something as valuable as a car. That's right. Selling your car through an online retailer is quick and easy. 

Retailers include: 

  • Craigslist
  • CarMax 
  • CarGurus
  • Cars.com
  • Autotrader
  • Carvana
  • Vroom
  • Kelley Blue Book

Not all online retailers include free options. It also might take a considerable amount of time to find the right buyer. 

Step 2: Collect your paperwork 

Paperwork must be accounted for before you list your vehicle anywhere. You also need to complete a few tasks before moving forward with the selling process. 

  • Collect your car title: It's also known as a pink slip. Your car title gives you legal permission to sell your used car. 
  • Check with your lender: If you owe money on your vehicle, you must check with the lender to learn the proper steps to arrange a sale. 
  • Visit the DMV online: The DMV will inform you of what paperwork is required in your state in order to transfer ownership. 
  • Order a vehicle history report: This is a proactive step. Showing this report to prospective buyers will increase the likelihood of making a sale. 

Step 3: Prepare your car 

What's the key to selling a used car? Easy: Making it look new. If you take the time to tend to small issues and damage, you can substantially increase the offer. 

In life and used car sales, first impressions are everything. It's pretty crucial to obtain the asking price for a vehicle by giving a good first impression. 

If your vehicle looks like you've been taking care of it, most buyers will trust that it's a good deal. 

Only take time to deal with minor car issues if you feel it will increase the value. Chances are, if you are trying to sell a ten-year-old car with 100,000 miles on it, your offers will be pretty low no matter what work you put into it. 

Step 4: Declare a reasonable price 

Declaring a price is the next step. Once you feel your car is ready, it's time to figure out how much money you can get for it. 

Evaluating your car through online tools like Kelley Blue Book is helpful. Once you have done proper estimate research, you can set a price that you think is fair. It's always smart to start high because there will likely be some negotiation. 

If you'd like a more concrete estimate, take your car to a local mechanic. They'll tell you exactly how much you can get. 

Step 5: Create an advertisement 

Your advertisement will give potential buyers a first impression. Make sure to deliver. It's essential to include the following in your ad:

  • Good quality photos: Lots and lots of photos will give buyers a sense of the car: the more photos, the better. Make sure to take them to a tasteful location. Shoot from many different angles. 
  • Provide a detailed description: More information in your description means a more effective advertisement. Make sure to include the features and condition of your car. The more you include, the fewer questions you'll have to answer. 
  • List the asking price: State the asking price at the beginning of the ad. People want to know what they are working with. 
  • Highlight any modifications: Toot your own horn! If you've modified the car above standard condition, be sure to note that in the ad. 
  • Include warranty info: If your car is still under warranty, it can be transferred to the new owner. This is important information to include.
  • State issues that need fixing: You don't want to waste anyone's time with false advertising. Be clear and open about the true condition of the vehicle you are selling. 
  • Include your negotiation terms: If you are open to negotiation, say so. If you are firm on your selling price, state that too. 
  • Terms of payment: Buyers will want to know what kind of payment you accept. Do you take personal checks, Paypal, cash? There are many options. Be specific. 

Step 6: Safely show your car 

You've done it! You landed a potential buyer. Now what?

Schedule a time and place to show the vehicle. Showing your car to a total stranger proposes some threats. Be smart about where you show the car in order to avoid issues. 

Make sure you show the car in a public area with plenty of bystanders. For example, a mall parking lot, bank parking lot, or restaurant parking lot are good options. Most parking lots nowadays have cameras, so you could acquire video evidence if anything were to happen.  Take a friend along with you for safe measure.

Let the interested customer take your wheels for a test drive. Make sure you go along with them. On the drive, avoid trying to persuade them to buy the car. Simply answer their questions. You don't want to seem pushy. 

Step 7: Allow the potential buyer to inspect your car 

Sometimes, it can give potential buyers peace of mind to have the car inspected themselves. This is very common. It is not your responsibility to pay for the inspection. The potential buyer should put out the money for the job. 

You should probably lower the price if they return to you with a long list of problems. Only address the issues that require immediate fixing. You don't have to compensate for every small issue on the list. 

Step 8: Seal The Deal 

Once the test drive has taken place, hopefully, the potential buyer will want to negotiate a price. Allow them to make the first move. If they ask you about the price, tell them that you think the asking price is fair. If you are open to a counteroffer, let them know. 

Be sure to negotiate slowly and repeat numbers often. That way, there is no miscommunication. Make sure that the buyer is ready to pay by either cash or cashier's check before agreeing to a sale. 

Usually, you'll sign and date the car's title and give the buyer a bill of sale

What's next? 

Woohoo! You did it. You sold your used car. What's next? Make sure to cancel your auto insurance policy

However, even if you don’t own a car but you plan to drive someone else’s, you will need to keep coverage.