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Treat the sale of your used car to a friend the same as any other transaction. Here is a comprehensive list.
What paperwork will you need to sell your car to a friend?
- Title
- Release of Liability Form
- Bill or Agreement of Sale
- Warranty papers
- Service records
The vehicle’s title
Having possession of the title is ultimately the proof of ownership. So, you need to transfer your car’s title in original to your friend. For the next step, it is recommended that you keep a photocopy of the title in your possession and if possible, note down a few details about the car like odometer reading at the time of sale after communicating clearly with the friend.
Release of Liability
You will surely ask your friend to register the car after the purchase but you also need to walk over to your local DMV office to notify them that a transaction has happened. With the Release of Liability form or Notice of Transfer, you are basically notifying the authorities that you are no longer the owner of the car and not liable to any happenings surrounding the vehicle.
Bill or Agreement of Sale
Many states do not require you to make an Agreement of Sale during a private transaction but it is always better that you have one drawn out to stay on the safer side. With your friend, signing on a white paper with the relevant details jotted down should work, however, if your friend agrees, try to create a bill or agreement of sale on legal terms.
Warranty papers
If your car is still under the warranty timespan, your friend will obviously need all the papers to claim it after taking possession. Be sure to hand over all the manufacturer and dealer-provided warranty papers with the keys of the car. These are as important as the title to maintain good faith between you two.
Service records
Hand over the detailed service records to help your friend take proper care of his/her new used car. Also, throw in the owner’s manual which contains clear instructions about maintenance schedules. This will save your friend a few bucks in both short-term and long-term repairs and create that feeling that he/she is indeed buying a quality car.
Keep an open mind while transacting with your friend. Be logical and expect rationality from the other side as well. The paperwork of the car needs to be clear from all angles as any loophole carries the potential of driving a wedge.