For the past month and a half I’ve been going through a car-related ordeal (I’ve posted about it a couple times on these boards to get some advice). It’s coming to an end with my selling the car to a private party. I’ve never sold a car before, and I wanted to ask anyone who’s done this to help me make sure I’m not missing something or doing something wrong.
First, I need to put together a bill of sale. As I understand it, it should be a document stating who I am; who the buyer is; that I’m selling him the car to him for the agreed upon price as-is; the car’s VIN; the day’s date; our drivers licensce numbers; and a place for both of us to sign. Is there anything else I need to put on the document? Second, signing the title over to the buyer. Do we just both sign somewhere on the title (I think on the back)? Anything else?
Third, the guy is planning to fix it up over the next few months and drive it or sell it. He said that when we sign the title, I should leave the date off of it so that he can wait to pay the taxes until he’s ready to drive it. I guess he plans on putting the date of whenever the car is ready to be driven instead of the day he actually buys it from me. For some reason this doesn’t sound right to me. Thoughts?
You’re really going to state the true sales price?
I would be leery of letting him put the date of sale on the title. I know someone who had their car wrecked while on a test run. If you are going to fudge do it on the price so the taxes are lower, not by not dating the title. Of course, to cover my a** I suggest you do everything above board.
No date, no contract.
Signing over the title does not mean the title has been transferred. You are still liable until he goes down and transfers it. If your bill of sale has no date, it is not much of a legal document and leaves you still liable.
Let me start with the standard disclaimer that I’m not your lawyer, this isn’t legal advice, etc…That said, I have two comments.
First, I’d be hesitant to leave the date off the documents. I don’t know Illinois law, but if the buyer thinks he can avoid taxes by delaying his “ownership,” the result may be that you’re liable for the taxes in the meantime. In addition, I wouldn’t want to be the registered owner of the vehicle if this guy drives it into some horrible accident (look up “negligent entrustment”), or if the cops pull him over and find, say, a kilo of coke in the trunk.
Second, I’d include a disclaimer of warranties in the bill of sale, unless you intend to provide some sort of guarantee with the car. Again, I don’t know Illinois law, but in many jurisdictions, such disclaimers have to be prominent. If I were selling a car, I’d include something like the following, in all caps and in boldface type:
Cars.com has a sample Bill of Sale [PDF] that includes a disclaimer and all of the info that you need. I used it for two cars I sold last year.
I would absolutely put all of the information down correctly, including the sales price and the date of sale. Print two copies, and after you both sign, each of you keeps a copy.
On the title, just follow the directions on the back. Basically, you both sign, and he gets the title to take to the DMV.
Don’t hand over the bill of sale or title until you have a certified/bank check in your hands. Don’t take a check for larger than the sales price and give a check for the difference back, as this is a scam. If you have any doubts about the check, call the bank and verify that funds are in place. See the cars.com website for more advice about selling.
Also, figure out what you’re going to do about license plates, which depends on where you live. In both of my sales, I kept the plates. In one case, I drove the car to the buyer’s house, and removed my plates. In the second, the buyer brought his own plates to my house and drove off with the car.
Thanks for the help. I’ll probably use that cars.com sample bill of sale, that looks good.
I didn’t mean to imply that I’d leave the date of the sale off the bill of sale. That’ll be on there for sure. I was questioning whether I should leave the date off the title when we sign that, as the buyer suggested. It sounds like I’m liable until he officially transfers the title through the State. Am I understanding that right? Or am I no longer liable and responsible for the car if we’ve both signed the bill of sale (regardless of when he transfers the title)?
And what about sales tax? Am I responsible for that, or is he as the buyer? If I don’t have to pay sales tax, I assume I have to pay income tax, right?
You should not have to pay income tax. You are selling something you own, not earing money. If, for some strange reason, you sold the car for more than you paid for it, minus expenses during the time you owned it, then perhaps there would be some sort of “capital gains” type tax. But definitely no income tax.
You also need to put the time the bill of sale was signed. Then if he gets in an accident on the way hom, you aren’t liaible In Washington the registration document has a part that you fill out and send to the state, releasing you from liability. Its supposed to be sent the same day you sell the car.
the person buying it, doesn’t have to register it until they want to drive it, but if you don’t date the bill of sale, or notify the state, you are liable for his driving. It can effect your licence, your insurance and even your credit.
The bill of sale I used for my Celica had, at the top, a discription of the the vehicle (1992, black Toyota Celica convertible)
then date and time of sale, VIN# Plate # Any documentation included, owner’s manual, maintainance record Car Fax.
Odometer reading.
Then
"For $_____ and consideration, I sell the above discribed vehicle, thereby relinquishing all rights and responsibilities connected to and surrounding this vehicle. The vehicle is sold “AS IS” with no stated or implied warranty
(Buyer’s name), buyer, shall pay agreed upon amount, in cash at the time of transfer
Transfer of title shall be done by the seller on sale date."
Then buyer’s Name as it appears on his licence, home address, phone # and licence #
The the same for you.
Oh, and two other things I should add: the buyer is going to pay cash ($500), and I’m planning to take the plates with me (they expire in a month anyway). So I’ve got those two things covered.
Yeah, from what I can tell, it’s a lot simpler in Illinois. There’s a place on the title for the buyer to put his address, to the seller to sign, the odometer reading, and the date.
Sadly, it’s not bad. It doesn’t have a transmission, but other than that it’s okay. I really need to get rid of it though, and know that I’m getting ripped off a bit.
Also, I don’t know what I was thinking with the sales tax question. I, as the seller, don’t have to pay sales tax on a car I’m selling. I guess I’m just nervous about the whole thing.
Every form you will need is available here. I couldn’t find anything for your state but many states require seller to report the sale of motor vehicles. In my state the seller has 5 days to report the sale, it is part of the title. Washington residents can even do it online. You may want to contact your local DMV or licencing agency to find out what your state requires. This can cover your but if something was to happen to the car before the buyer transfers the title. A legal forum I frequent gets regular posts for sellers of automobiles that are surprised to find they owe money for impounds or parking tickets for vehicles they sold, sometimes years later.
