When an individual who already owns a car is considering buying one to replace it, he might be faced with the task of selling his old one. In some cases, the individual will trade in the car to a dealer, or, if the car is in ruinous condition, scrap it. However, it often makes better financial sense for the individual to sell the car on the second-hand car market. This can be complicated, requiring not just business savvy but an ability to follow the rules for selling a car set out by the state Department of Motor Vehicles.
Research what the car is worth. Before you list the car, find out its fair market price. Get a range of opinions from companies such as Edmunds and Consumer Report. There might be some regional variation in price, so look up in local ads what similar cars are going for.
Advertise the car. To attract buyers, make it known the car is for sale. Unless the car is a rarity and one that people from other parts of the state or country would be interested in buying, keep your advertising local, such as in the classifieds or on Craigslist.
Show it to prospective buyers. In most cases, the buyer will want to take a look at and test drive the vehicle before agreeing to buy it. Before you let any prospective buyers test drive your car, call your insurance company and ask if another driver will be covered. If not, ask the buyer to show proof of his own insurance policy. Ask him to agree to collateral, such as his own car, before he gets behind the wheel.
Negotiate a price. A prospective buyer might agree to pay the asking price for the car. However, it's more likely she will offer a lower price and see if you'll agree. When negotiating, weigh several factors, such as how many buyers are interested in the car, how much the car is really worth, and how much it's costing you in the time spent transacting the sale.
Sign the paperwork. Each state has its own regulations to govern the sale of a used car. In most cases, the seller and buyer will both be required to sign a title document and potentially a bill of sale. In addition, both parties will be required to report the sale to the DMV. Check with your state DMV for a rundown of the correct procedure.