How to protect yourself when selling a car privately
Time to sell your wheels?
There’s a number of steps to take to make sure you get top dollar and protect yourself from fraud, including identity theft. By following these tips, you’ll be better prepared to make decisions as you navigate the sales process.
Keep in mind every Canadian province has different rules, regulations and requirements when you sell your used car. In Ontario, for example, you need a Used Vehicle Information Package which contains such things as make and model, vehicle registration history, past owners and more. If you live elsewhere, familiarize yourself with the requirements of other provinces here.
A critical aspect of any transaction is staying safe. We’ve gathered this guidance to help on your sales journey:
- Gather all documents
Before you start the process of selling, make sure you have all the necessary documents. This includes the original vehicle ownership, safety certificate (if applicable), and whatever else is required in the province you live. The buyer will require these documents when transferring the ownership of the car into their name.
You have the option of buying a vehicle history report (VHR) to be transparent about its history. This alerts the buyer to accident history, registration history, unfixed safety recalls, lien status and more. If you have copies of the vehicle’s service records, that’s also proof that it’s been well cared for. Finally, you may want to get a pre-sale inspection from your mechanic.
- Determine the value
Do some research to know what your car is worth. Online resources such as the Canadian Black Book or the Kelley Blue Book can help you set a reasonable price. Carfax also has a free value tool. You can also get an instant cash offer online and compare it to any offers received from private buyers.
Keep in mind there are day-to-day factors that can affect value. Has the vehicle previously been used as a taxi, daily rental and has anyone smoked in it? What is the odometer reading? Does it come with winter tires or other security features? Make sure you learn what similar vehicles in your area have sold for.
- Prepare your vehicle
Put simply, a clean car sells. Either do it yourself or have it detailed. Make sure there’s no garbage inside, in any compartments and the trunk has been cleared out. You may even want to repair any minor damage, such as scratches. These efforts will help you get a better price.
- Advertising
Online marketplaces such as AutoTrader.ca, Kijiji, Facebook Marketplace and others are among the most popular places for Canadian used car buyers to start looking. You can also place a for-sale sign in the car's window and park it in a high-traffic area or on your property. Be sure to include information such as the make, model, year, mileage, and any notable features or upgrades. Speak to the most serious buyers over the phone before scheduling a test drive. Never deal with a prospective buy you can’t meet in person.
- Erase personal details from vehicle’s computer
Not all cars sold privately are older models. If your car has navigation, for example, you don’t want to leave your home and work address stored in its computer. What about all your phone contacts you have uploaded to the car? To ensure there’s no trace of you or them left behind, return to factory settings.
Before you give any service records to the buyer, be sure to black out any personal information. If you bought the car from a dealer, remove any contracts or completed credit applications from your glove compartment or owner’s manual. In the wrong hands, this is a perfect tool for identity theft.
PRO TIP: This step also applies when you sell your car to a dealership.
- Keep the test drive safe
Meet potential buyers in safe areas, such as well-trafficked retail or restaurant parking lots with security cameras. Plan test drives ahead. Always accompany the potential buyer and ask a friend or family member to join you. Make the test drive short and stick to populated areas.
Ask to see the person’s driver’s licence before handing over your keys and take a picture of it. And if the buyer wants their own mechanic to take a look under the hood, meet the person at reputable businesses and drive separately.
- Choose legitimate forms of payment
Cash and bank drafts are the most secure. Only accept cashier’s cheques from reputable banks or credit unions. However, keep in mind it can be hard to distinguish between a real and fake one. To ensure a safe transaction, take a cashier’s cheque only when you can meet the potential buyer at their bank because it allows you to verify funds. Never take a money order, certified or personal cheque.
If this sounds like too much work, you can always sell to a dealership. They will take care of the paperwork, but you may earn less on the sale. The choice is yours!