Selling a car: How to limit your risk
Selling a car on your own almost always means getting more money for it than if you had traded in the vehicle.
So far, so good.
In order to keep that cash, you need to take steps to ensure nothing goes awry during or after the sale.
When your vehicle changes hands, you open yourself up to the possibility of committing fraud (if you've been untruthful about the car's condition) or becoming the victim of a scam or crime yourself.
But you can reduce the chances of any of this happening to you.
Kristen Anderson is head of market intelligence for Instamotor.com in San Francisco. Her company connects local people, free of charge, who want to buy or sell a car. It also has iPhone and Android apps so people can easily shop for a car on their devices.
Anderson is familiar with the trouble sellers occasionally see.
Follow these tips to limit your risk when selling a car:
Tip 1: Be truthful
When you create an ad designed to sell your car or truck, all statements must be accurate to the best of your knowledge, Anderson says. So report what you know.
In most states, it's assumed you're selling the vehicle as-is. Still, you have the responsibility to do what you can so the buyer doesn't blame you for problems later on.
"Potential buyers often request a vehicle history report that reveals what has happened to the car in the past," says Anderson. "If you misrepresented the facts, a fraud claim can be made against you."
For example, if you said the vehicle wasn't salvaged, but in reality it had frame damage and a salvage title, then you've opened yourself up to legal action due to fraud, Anderson says.
Most of the time, transactions go off without an issue, she says, but you can take steps to protect yourself in case the seller isn't aboveboard.
Tip 2: Guard against scams
Anderson also recommends researching the prospective buyer. You want to know who you're dealing with.
Screening buyers also makes the sale go more smoothly.
"Ask them to send you their social media profiles like LinkedIn, if they have an account," says Anderson.
Another way to get better acquainted is to ask questions about what they're looking for and what they need in a vehicle. As they talk more, you'll get a better feel for them.
If you start to feel uncomfortable or the conversation sends up red flags, tell the person you're turning the sale over to an auto broker and bow out of the conversation.
If you’ve decided the seller seems legitimate, make plans to show the car.
Tip 3: Meet in public
Schedule your encounter during daylight hours, take someone with you and meet in a busy place.
Remove all valuables from your car before you go, then drive to a police station parking lot, shopping center or another public space where you'll have peace of mind.
Before the test-drive, ask to see the prospective buyer's driver license. Make a copy of it, if possible, or at least write down the number and name. Leave that information with your companion.
Keep the test-drive short, and stay in well-populated areas. Agree to a mechanical inspection to close the loop on any problems and diminish the chances of future claims.
If all goes well, you'll have made a sale.
Tip 4: Monitor the paperwork
You don't want to be held liable for something that happens to the vehicle after the buyer takes possession.
Do some research on your state's Department of Motor Vehicle (DMV) or secretary of state website to find out what paperwork is needed to transfer the vehicle title.
Anderson says failure to check the requirements is a common hang-up.
Every state has different requirements and forms to fill out. If you can, go to the DMV or secretary of state office with the buyer to transfer the title. That's the only way to avoid problems, Anderson says.
"If something does happen to the vehicle after you have transferred the title, and you’ve been completely aboveboard about any problems with the vehicle, then you can't be held responsible," says Anderson.
Taking these precautions is the safest way to sell a vehicle.
Don't fall victim to a scam like the one by a prospective buyer who asks you to ship the car to a foreign country, promising to pay upon receipt.
You'll no doubt receive a counterfeit check as payment, leaving you without a vehicle and with a significant hole in your bank account.
photo credit: Westend61/Getty Images.