The Best Way & Place to Sell a Used Car Online Safely

Online car sales are here to stay. In fact, with the COVID-19 epidemic and concerns about the safety of shopping in person, creating an online listing may be the best way to sell a car.

Of course, if you want to sell a car online, it’s important to choose the right place to list it and to take all necessary safety precautions.

At Addition Financial, we strive to provide useful information to our members. Here’s the information you need to sell your car online safely.

The Best Sites to Sell Your Car Online

The first thing you need to do is decide where you will list your car for sale. There are many sites that may be viable, including both paid and free options.

As a rule, paid options are going to be safer than free ones. Some of the sites you may want to consider include:

The benefit of choosing a paid option is that you’ll have access to an audience of people who are serious about buying a car online. Some of these sites, such as CarGurus, allow you to search for similar cars locally. That can be a big help as you try to decide on a proper listing price for your car.

Free options have their benefits, too. The two best known options are Craigslist and Facebook Marketplace. A lot of people who want to buy a used car locally start with a search of Craigslist or Facebook and, if you have the right asking price, listing on these sites can help you make a sale quickly.

Of course, the downside of using Craigslist or Facebook is that you won’t have the same protections you would if you used a paid site. Safety is a key concern with any online transaction. We’ll talk more later in this article about how you can protect yourself if you choose to list your car on one of these sites.

One of our experts, LeeAnn Shattuck of The Car Chick, suggests using a price threshold to decide where to sell your car.

“If your car is worth more than about $5,000, consider listing it on and If your car is worth less than $5k, save your money and put it on Craigslist and Facebook Marketplace.”

If you have a classic car, then you should consider sites such as Hemmings or ClassicCars. These sites are where collectors go to look for classic cars.

Paperwork for Selling a Used Car Online

Selling a car online doesn’t eliminate the need for paperwork. You still need to make sure that you document the sale properly. Any decent buyer will want to see paperwork and it’s your job to provide it.

According to Autotrader, there are seven pieces of paperwork you need to sell a car on their site. Most other sites and buyers will require the same information. The paperwork you need includes:

  1. Maintenance records showing your car’s service and repair history
  2. Vehicle history report (such as CarFax)
  3. Transferable warranty (if the car you’re selling is still covered by a warranty)
  4. As-is documentation. When there is no transferable warranty, you will need a document specifying that your vehicle is being sold as-is and with no future obligation on your part. All future repairs and maintenance will be the responsibility of the buyer.
  5. Odometer disclosure statement. According to the Truth in Mileage act, you must disclose the odometer reading to the buyer at the time of sale for any vehicle less than 10 years old or weighing less than 12,000 pounds. Requirements may vary by state, so check with your state’s Department of Motor Vehicles to learn what your statement should include.
  6. Title. If you own your car outright, you may simply hand the title over to the buyer. If you have an outstanding auto loan, then you’ll need to request a payoff amount from your lender and pay the total due before you can officially transfer the title.
  7. Bill of sale. While you might be tempted to skip this step when you sell a car privately, we recommend drawing up a bill of sale. It should include a description of the vehicle being sold, your odometer disclosure, the purchase price and the delivery date. The bill of sale should be signed by you and the buyer.

It’s important to document the sale of your car accurately and completely. That way, you’ll be protected in the event that something goes wrong with the car after the sale.

Financial Precautions to Take

The biggest downside to not selling your car through a dealer is that you won’t have the protections in place that you would have if you chose to work with a dealer. That means you’ll be the only one looking out for your financial wellbeing.

The first thing you need to do is to be aware of red flags that point to potential scams. Here are a few of the most common red flags according to LeeAnn and Quinn Osha of Topmarq:

  • Be wary if an email you receive is poorly written or in broken English, as it may indicate a scam.
  • Beware of any buyer who wants to pay on an installment plan or who makes excuses for why they can’t transfer the money until after you hand over the title.
  • Don’t sell to anybody who offers to buy your car without seeing the car first. No serious buyer would do that.
  • Don’t use an escrow service because most of them are scams.
  • Be wary of anybody who isn’t local. Most people don’t try to buy a car long distance.

In terms of accepting payment, you have several viable options. These include:

  • Get cash in person
  • Get a cashier’s check
  • Get a certified check
  • Have the buyer transfer money to you electronically (or transfer it to your lender if you still have a loan balance) and verify you have received it before you hand over the title.

Even if a buyer seems trustworthy, you should never hand over the title until you have received payment. You can further reduce your risk by meeting at your bank. That way, the cash will be examined immediately and you’ll be able to verify that an electronic transfer has been sent to you.

The Checklist for Getting Your Vehicle Ready to Sell Privately

Personal Safety Precautions to Take

Now that we’ve covered the legal and financial protections you need to take, it’s time to talk about personal safety. When you sell any item online, you should be aware of the potential risks and take appropriate precautions.

Here are some of the things we recommend:

  • Limit the personal information available to potential buyers via your online listing. Your best bet is to use a throwaway email and phone number to minimize the risk of identity theft.
  • Always get the full name, phone number and address of anybody who expresses interest in your car. Someone who is unwilling to provide basic information is probably not a safe person for you to meet.
  • Before meeting anybody in person, Google the potential customer and make sure – as best you can – that they are who they say they are.
  • Don’t allow anyone except serious buyers to test drive your car. There’s no point in taking the risk of meeting someone who isn’t willing to pay what you need.
  • Do not allow any potential buyer to test drive your car without seeing a valid driver’s license and insurance card. (You should also make sure to compare the name on the driver’s license with the name they gave you.)
  • While normally you would take a test drive with the buyer, the COVID-19 pandemic makes that dangerous. If you decide to get in the car for a test drive, make sure that both you and the prospective buyer wear masks and gloves.
  • Don’t have prospective buyers meet you at home. Instead, arrange to meet them at a friend’s house or in a public place. It’s never a good idea to put yourself in a vulnerable position where strangers know where you live – and where your car is usually parked.
  • If you can, have a friend or family member present when you meet with potential buyers.
  • Finally, after each test drive, make sure to wipe down your car with sanitary wipes or clean it.

If anything feels wrong about a potential buyer, remember that “No” is a complete sentence. You’re under no obligation to allow someone to test drive your car or even see your car if you’re not comfortable. The most important thing you can do to stay safe is to trust your instincts.

Selling a car online is quickly becoming the new norm, but that doesn’t mean you shouldn’t take precautions. By selling through a reputable site and protecting yourself legally, financially and personally, you can have a safe and profitable transaction.

Are you in the market for a new or used car? Click here to read about Addition Financial’s competitive car loan options!

The content provided here is not legal, tax, accounting, financial or investment advice. Please consult with legal, tax, accounting, financial or investment professionals based on your specific needs or questions you may have. We do not make any guarantees as to accuracy or completeness of this information, do not support any third-party companies, products, or services described here, and take no liability or legal obligations for your use of this information.


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