6 Steps to Limit Risk When Selling Your Car Privately

Risks of Selling Your Car

If you are considering selling your car, one of the decisions you have to make is how you’re going to go about selling it. If you read our previous article, How to Get More Money for Your Car in 5 Easy Steps, we explained how selling privately on your own often results in getting the highest price compared to trading it in or selling it to a dealership. But the higher price you might get doesn’t reflect all the time, effort, money and stress the process includes. If you’re still determined to move forward with a private sale, here are six steps you can use right now to limit risk when selling your car privately.


Avoid Wasting Time with Non-Serious Buyers When Selling Your Car Privately

Not Serious Car Buyers

Make no mistake, you will get inquiries from people who aren’t serious buyers. It’s just a part of what happens when you’re selling your car privately. The one thing you can use to limit time wasted on non-serious buyers is knowing how to do good screening of the people who contact you about your car, and we’ll explain how to do it.

You Will Get Inquiries from People Who Aren’t Serious Buyers

After you’ve already spent a good deal of time getting your car ready to sell by thoroughly cleaning it yourself or having it professionally detailed, making any necessary repairs, crafting a great ad, taking lots of photos, and posting your ad and photos in several different places, the last thing you want is to waste any time dealing with people who aren’t even serious about buying your car.

Some people are just inquiring to see how quickly you’ll reduce the price. These are people who are trying to determine whether or not they might score a sweet deal at your expense. But there’s an even darker side to this you need to know about. The worst-case scenario is that some of these people are trying find an opportunity to scam you in some way. These are the people you have to watch out for because they will do their best to make you think they are legitimate buyers when they really aren’t. The key is to be aware of the kinds of things scammers say so you can identify them early before getting sucked into their webs of lies. The potential for getting scammed is one of the biggest disadvantages of selling your car privately, so it’s important to take the right steps to limit your risk, including screening each inquiry someone makes concerning your vehicle.

How to Avoid Time-Wasters and Scammers with Good Screening

Knowing how to screen each inquiry that comes in is the key to protecting yourself from time-wasters and scammers. When someone contacts you about your car, be sure to get answers these questions:

What is the person’s full name? If there’s any hesitation on the part of the person making the inquiry to supply this information, hang up or don’t reply on email.

Is the person in your area? People contacting you from far away or from overseas is always a red flag. It typically means they’re going to try to get you involved in some crazy scheme. In addition to their full name, get their phone number and address as well.

Do they want to see the vehicle? Anyone who wants to make you an offer (especially an offer above what you’re asking) without first looking at or test driving your car is another huge red flag.

The Tangled Webs Scammers Weave

Scammers are constantly coming up with different schemes to trick unsuspecting sellers. Some will say they’re willing to pay more than you’re asking for the car if you’re willing to ship the vehicle overseas and accept a money order from their country. You’re probably thinking to yourself, “Who in the world would fall for that?” You’d be surprised. Thousands of people find themselves victimized by scammers each year because those scammers can be very convincing. Using your common sense as you field inquiries is one of easiest ways to limit risk when selling your car privately.

Some will tell you a story about how they have a friend in your area who owes them money and that this friend will purchase the car from you to repay the debt. What they don’t mention, of course, is that the cashier’s check this “friend” is going to give you is a fake, which you don’t find out until you try to cash it and the car is already long gone.

Anyone who offers to wire you money for the car is probably up to no good. We’ll have more to say about safe ways to accept payment for your car in step #3, Safe Forms of Payment. Anything that sounds strange or overly complicated to you should be considered a red flag. Trust your gut instincts – if something seems suspicious, it probably is.

Besides knowing how to screen inquiries to weed out time-wasters and scammers, you also want to be sure you’re doing everything you can to protect your personal safety when you start meeting prospective buyers to show them your car, which is the next topic we’ll cover.


Avoid Stranger Danger When Selling Your Car

Risks of Strangers

Let us be clear that instances of people being harmed while privately selling their car are extremely rare, but it does happen. All you have to do is use common sense and take a number of precautions to avoid any potential problems.

Serious Problems are Rare but Can Happen

A San Diego man had a gorgeous 1973 classic Chevrolet Chevelle he advertised for sale on Craigslist. He became the target of a car thief who took the car for a test drive and just kept going. Much scarier, however, is what happened on June 30, 2017 in Lafayette. A man advertised his car for sale online and had the “buyer” come to his home to look at the car. Two men showed up, pulled a gun on him, robbed him, and then struck him in the head and fled the scene. You can read about this recent incident here. While serious problems like this rarely occur, you don’t want to end up being one of those rare occurrences, right? There are things you can do to stay safe when selling your car privately.

How to Stay Safe When Selling Your Car Privately

The first thing you can do when advertising your car for sale online is limit the amount of personal information you give out. Some scammers aren’t as interested in your car as they are in your personal information. To protect yourself from identity theft, stay as anonymous as possible. You can say you’ll only accept initial inquiries by email and set up a separate Gmail or Yahoo mail account so you’re not handing out your real email address. Don’t give out your home telephone number if you have one as that is a way savvy people can figure out your home address. If you’ll be sharing service and repair records, be sure to black out your personal information. Another thing you can do is make sure any photos you post online don’t have “geotag” data embedded in them. When you take pictures with your cell phone, it often includes longitude and latitude data, which means you’re giving your address away if you’re not careful.

Never have prospective buyers meet you at your home. Agree to meet in a very public area where there will be lots of people around, preferably someplace like a grocery store or retail outlet where you know the parking lot is under video surveillance. Always have a friend with you as well. Potential attackers will be deterred if you’re not alone and if you’re in a public place. Never agree to meet anyplace that feels deserted or isolated. If you can’t have someone with you, be sure you’ve informed a family member or friend about where and when you’re having the meeting and how long it will last. Make sure you have your cell phone on you so someone can check in on you to make sure everything is okay.

If you’re going to allow a potential buyer to test-drive the car, make sure you have a way to make a photocopy of the person’s driver license that has their name, address and date of birth on it. If you have a friend with you, leave that information with them while you ride along on the test-drive. Agree before the test-drive on the route you’ll take – and 15 minutes is more than enough time for a potential buyer to get a feel for the car.


Avoid Getting Scammed: Safe Forms of Payment

Avoid Getting Scammed When Selling Your Car

There are many ways that scammers try to take your car without paying for it. Most of them involve some form of a fake payment. We’ll tell you about the different ways scammers try to do this, and then arm you with the information you need about the safest ways to accept payment and conduct the transaction to limit risk when selling your car privately.

How Scammers Fake Payments

Cash may seem at first to be the safest way to accept a payment, but what if the bills are counterfeit? And do you really want to be receiving a big wad of bills on the street? Cash may be king, but when you’re selling your car privately, it’s not necessarily the best choice. The same thing applies to personal checks. What if the check bounces when you try to cash it or deposit it? If you allowed the buyer to take the car in exchange for the check, you’re out of luck. What about a cashier’s check from a bank? That must be safe, right? You’d be surprised how easy it is to fake a cashier’s check, leaving you with no car and no money for it. Money orders, wire transfers, PayPal, and other online payment schemes – these can all be faked or set up in a way that doesn’t result in you getting the money for your car. Although it may sound like you’re out of options, there are ways to safely accept payment for your vehicle.

How to Avoid Scams with Safe Ways to Accept Payments

Be clear from the outset about your payment terms. Don’t meet or move forward with anyone who doesn’t agree to your payment terms. It is essential that you be in the driver’s seat when it comes to payments. Don’t let any buyer talk you into some kind of monthly payment scheme. If the payments stop coming, you have no way to do anything about it. If the buyer suggests using an escrow service, those can be faked as well, so be sure you first verify it is a legitimate escrow service. The average private car buyer doesn’t suggest using an escrow service, so if your prospective buyer suggests it, consider it a red flag.

All the different ways mentioned that scammers use to make fake payments can be thwarted by adopting two simple rules for accepting payments: 1) Never let a buyer take possession of your car or sign over the title before you’ve verified that the funds are in your bank account. 2) Meet at your bank to accept the payment so you can verify the transaction. A cash deposit will be immediately examined by the bank. If the buyer is paying with a cashier’s check, it might take a few days for it to clear, so make sure the buyer understands they don’t get the car until the payment clears.

If your buyer wants to write a personal check, you can agree to meet at the buyer’s bank. Their bank has to cash the check for you as long as the buyer’s account has sufficient funds to cover it. That way you have the money in hand before transferring ownership of your car to the buyer.

When you’ve successfully accepted and verified the payment for your car, you can breathe a huge sigh of relief, right? Yes, but there are still other ways the whole experience can go sour, some of which can have a seriously negative impact on you. Next up is learning how to avoid fraud claims after the sale of your vehicle.


Avoid Fraud Claims After Selling

Fraud Claims and Unhappy Buyers after Selling Your Car

There’s nothing worse than going through all the stress and hassle of selling your car privately only to have the buyer make a fraud claim against you because they’re unsatisfied with the vehicle for some reason. There are some simple things you can do to avoid this problem.

Your Liability When Selling “As-is.”

Are private car sales as is? Yes, in most places the assumption is that you’re selling it “as is,” meaning you’ve told the buyer everything you know about the car, including anything that’s wrong with it. Be as clear as possible from the beginning that you are selling the car “as is” and that you are not responsible for any future repairs. In other words, “what you see is what you get.” Unfortunately, even though you do this, you’re not necessarily protected from a potential fraud claim. If the buyer discovers something wrong with the car that you didn’t tell them about, you could get slapped with a fraud claim. Here’s how to protect yourself from experiencing that scenario:

How to Avoid a Fraud Claim

Your best weapon against potential fraud claims is the truth. Honesty really is a virtue when it comes to selling your car privately. If your brakes barely passed inspection two months ago, don’t tell the buyer the brakes are fine. Just tell the truth. If you get caught in a lie, you can find yourself in serious legal trouble.

The complicating factor here is when you fail to disclose a material fact. If your car was in an accident and you had to have the frame straightened, that’s something you would want to mention. Failing to mention something like that can be a legal problem even though you didn’t technically lie about anything, you just didn’t share everything you knew. Again, honesty is the best policy. Give the buyer the most complete picture possible concerning your car’s history and condition.

What do you need to sell a car in California? You want everything to be in order from a legal standpoint. Making sure you do the right paperwork and fill out the right forms is another way to avoid potential fraud claims is. Many people have a common question related to paperwork: Where can I get a bill of sale? In California, there are two different forms you need to fill out, one of which serves as a bill of sale. Be sure to make and keep copies of any and all paperwork related to selling your car.

Vehicle/Vessel Transfer and Reassignment Form REG 262: This one combines several different functions into a single form. It serves as a bill of sale, odometer disclosure, and power of attorney. You cannot fill this form out online because it’s printed on security paper in order to be compliant with federal odometer disclosure regulations. You have to get a paper copy of this form from the nearest DMV office.

Notice of Transfer and Release of Liability: This one can be filled out online, but please understand that it is just a “notice” of transfer. It does not complete the transfer of ownership. We’ll be covering this in the next step, which explains how to limit risk when selling your car privately by making sure you properly complete the transfer of ownership to the buyer.


Avoid Post-Sale Liabilities by Completing Change of Ownership

Liabilities after Selling Your Car

When you reach the finish line of selling your car privately, you feel a huge sense of relief. But depending on how you and the buyer handled the paperwork, you could still find yourself with a major headache depending on what the new owner does with your vehicle. Once again, however, protecting yourself from post-sale liabilities just involves taking some extra precautions.

What Happens After Selling Could Still be Your Headache

Here’s a nightmare scenario that seems too crazy to be true, but it does happen: You sell your car to a person and fill out all the right paperwork. A few weeks later you find out the buyer racked up hundreds of dollars in parking tickets and then crashed the car into a storefront causing thousands of dollars of damage. You find this out because law enforcement contacts you as the owner of the vehicle. You could even be held legally liable for the parking tickets and damage caused to the business. But didn’t you already sell it and do all the right paperwork? You even filled out the Notice of Transfer and Release of Liability. What gives?

The problem here is that the new owner has to do something as well. As we hinted in the previous step, the Notice of Transfer and Release of Liability is in fact only a “notice” and does not represent the completion of the process. As the California DMV website clearly states, “Reporting the sale or transfer of a vehicle or vessel to the DMV does not constitute a transfer of ownership. The record is not permanently transferred out of your name until the DMV receives a completed application for transfer of ownership and payment of appropriate fees from the new owner.” Failing to verify that this final step has been completed can result in you finding yourself in the middle of all kinds of very messy lawsuits. Protect yourself!

How to Avoid Post-Sale Liabilities: Change of Ownership

There is really only one way to make sure the buyer of your car fulfills their end of the bargain by filling out the paperwork and paying the fees to fully complete the transfer of ownership. You should both meet at the DMV to take care of all the paperwork so you know it’s been done properly. Yes, it’s yet another step and more of your valuable time, but it’s the only sure pathway to the peace of mind you want when selling your car privately. Also make sure you don’t cancel your car insurance before you’re sure everything is complete, including transfer of ownership.

A final step you can take to make your life easier when selling your car is reconsider your decision to sell it privately.


Avoid the Time, Stress and Hassles of Selling Your Car Privately

Stress of Selling Your Car

The various steps we’ve outlined above represent the best ways you can limit risk when selling your car privately. At this point, you may be rethinking your decision to try and sell your car privately on your own, and for good reason. You can avoid all of the risks by choosing a different method of selling your car.

Selling Your Car Privately Can be a Painful Process

You probably already had a sense that selling your car privately takes a good deal of time in terms of getting the car ready to sell, writing and posting ads, fielding inquiries, and so on. But now you have a much fuller picture of just how much time and hassle it takes to not only do all of that, but to do it all in ways that protect you from time-wasters, scammers, criminals, and negligent new owners. There is simply no guarantee that the process will go smoothly, which is why many people choose to use their car as a trade-in towards their next vehicle. Unfortunately, it’s a well-known fact that trading in your car usually results in you getting the least amount of value out of it. Why can’t there be a way to sell your car that avoids the stress and hassle of selling it privately but gets your more money for it than you will by trading it in? The good news is that there is a better way, and it’s called Driveo.

How to Avoid Wasted Time and Stress when Selling Your Car

The alternative to selling privately or trading in your car is to sell it to a dealership that is both fair and transparent, which is exactly what you get with Driveo. We give your car a thorough inspection and conduct market research to come up with an offer that is competitive, and often substantially higher than what other dealerships and car buying services will offer. We buy thousands of cars year in and year out, and we’ve perfected the art of making the entire process fast and efficient while at the same time emphasizing customer satisfaction with competitive quotes. You’ll be hard-pressed to find our superior combination of speed and price anywhere else. We even handle all the paperwork for you so you never even have to waste time going to the DMV.

Knowing how to limit risk when selling your car privately is important, but you can also avoid all those risks by making the simplest, easiest choice of all – selling your car to Driveo. See for yourself by getting a quick online quote today that will be good for 30 days!

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