How to sell a financed car to private party?

  • Thread starter Thread starter occphv
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occphv

New Member
Hello All,

Got a question for selling my currently financed Clarity, here are some background information:

- Located in California.
- Selling to a Private Party.
- Financed with Honda Financial Services (HFS).
- Amount owned is Greater than the Selling price (Negative equity).

What documents are needed in addition to:
- Bill of Sales (REG 135)
- Notice of Transfer and Release of Liability (REG 138)
- Payoff by Check letter (for HFS, can get it from https://payoffahfc.dealertrack.com/)

My current plan is: buyer and myself are going to get cashier checks from the bank together and then mail it to Honda Financial Services along with the payoff letter via Overnight Mail.

We will both sign the "Bill of Sales" and then I will file the "Notice of Transfer and Release of Liability" on DMV's website.

Am I missing something that is important? Just want to make sure that both buyer and me are well protected and have a smooth transaction.

Any information will be greatly appreciated!
Have a nice weekend :)
 
When will the buyer take possession?
Is the buyer financing the purchase?
How does insurance figure into this to make sure you're covered while you own or possess the car.
Have you called HFS to make sure this process is ok with them.
Will the buyer's check will have immediately available funds? (no holds)

I don't need answers, these just some thoughts as you go through this. There are likely other things to consider. Your bank may have some helpful ideas too.
 
Did you take advantage of any financial incentives that stipulated penalties if you sold your Clarity so soon?
 
My experience has been that buyers want title in hand, period. There are just too many scammers out there. This goes for you too - anyone eager to buy as you’ve suggested is probably trying to scam you. Unfortunately it will take several weeks or even months for the title to arrive. The upside is you will have many more people interested and that means you can negotiate for a better price. If you can’t wait or don’t have the cash up front, then go to car max or similar.
 
It's also a good idea to have the buyer sign the title at the Secretary of State's office. Strange, unpleasant things can happen if the buyer never signs the title and you are still the "titular" owner when the car is involved in something bad. The buyer might even try to re-sell the car while representing themselves as you.
 
insightman said:
It's also a good idea to have the buyer sign the title at the Secretary of State's office. Strange, unpleasant things can happen if the buyer never signs the title and you are still the "titular" owner when the car is involved in something bad. The buyer might even try to re-sell the car while representing themselves as you.
Click to expand...

That's what California's Release of Liability form is for. Once signed and submitted by the seller, the onus transfers to the buyer. That also gives DMV a way to enforce the 10-day period for the buyer to get their paperwork done.
 
Thanks for all the feedback, sold the car the other day and the process was very straight forward.
Call Honda Financing Services for a payoff amount, get 2 cashiers checks (one from buyer, one from myself), sign those forms and mail it back to HFS.
Title will be transferred to the new owner and DMV will mail it out in a few weeks.
 
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