Finalize The Sale

The laws governing the sale of motor vehicles are regulated by the state's department of motor vehicles. These rules will vary somewhat from state to state. Make sure you check with the DMV in your state, and keep in mind that much of the information is now available on DMV Web sites.

When selling your car, it's important to limit your liability. If someone drives away in the car you just sold, and they get in an accident, can you be held responsible? There are two ways to deal with this concern.

Once you have the money from the sale (it's customary to request a cashier's check or cash) sign the title over to the buyer. In some states, the license plates go along with the car. A new title will be issued and mailed to the new ower.

But what if you still owe money on the car, and the bank is holding the title? One way to deal with this is to conclude the sale at the bank where the title is held. Call ahead and have the title ready. Then, once money has changed hands and the bank has been paid the balance of the loan, sign the title to the buyer.

In some cases, however, an out-of-state bank might hold the title. In this instance, it is recommended that you go with the buyer to the DMV and get a temporary operating permit based on a bill of sale. Then, after you pay off the balance of the loan with the proceeds from the car sale, you will have the title mailed to you. Sign it over to the new owner and the transaction is complete.

Finally, remember to contact your insurance agent to cancel your policy on the vehicle you have sold (or transfer the coverage to your new car).

Before your car drives away for the final time, take a last look through the glove compartment, the trunk and under the seats. You might find some long forgotten treasures you misplaced years ago.