How often have you realized that you are ready for a different car and start searching the online sites for what car you want? You determine it would be best to find one from a private party since dealers always want to charge you a 30% higher price. You find a car that interests you and its still for sale.
Now your mind starts scrambling on how to pay for it. But wait, you need to sell your car first because you need the equity out of it to purchase your car new. Will it be the freebee site or will it be the usual sites that cost a lot of money and run your add along with all the auto dealers.
Weeks later, while you’re waiting to for someone to respond to your car add you start thinking. Should I ask someone if they want to trade vehicles? Many respond no because; they are in the same position that you are and need the equity, its an extra car and are not replacing it or they never thought of trading. Many people are starting to specify on their adds if they are willing to trade or do not want to trade.
Car trading has been going on for years but typically amongst car collectors who are constantly changing up their collection. Many car enthusiasts get tire of their ride and would like to change cars periodically as well. Some trade their cars up in value and make money on it. Some trade just to get a nicer vehicle. Some trade entirely across platforms such as from a car to a boat.
What if there was a site for people who can appreciate the value and benefits of trading? A site, where you know that they are willing to trade for the right vehicle.
Trading cars privately may result in a better deal for both parties since often a private seller will price a vehicle lower than a dealer would for the same car, even though that amount is more than the seller would get as a trade-in from a dealer.
Knowing the rules and regulations of private car trade/sales can help simplify the transaction and help both parties feel satisfied with the deal. How to go about the trade can depend on where both the buyer and seller live. Selling versus trading will have the same documentation required from State requirements to transfer ownership. Trading a vehicle from private party to private party will only reduce the upfront amount of money that will be required to collect.
State Department of Motor Vehicles
When trading cars privately, it is important that both the buyer and seller check with the department of motor vehicles in the state of residence. Should the buyer and seller live in different states, regulations from both jurisdictions need to be considered since laws vary from state to state.
Responsibilities of Buyers and Sellers
When selling a car privately, the seller needs to know whether the state department of motor vehicles requires immediate notification that the vehicle has changed ownership. For example, in the state of Wisconsin no notification from the seller is necessary and there are no special state-required forms to complete. However, the buyer must immediately apply for a title certificate. Conversely, in California, the seller must notify the state DMV within five days of the sale. It is suggested that to protect the liability of the seller, a Notice of Transfer and Release of Liability form be completed. The California DMV then updates ownership records and the buyer has 10 days from the date of sale to report the transfer. Different states have varied, yet specific requirements for both buyers and sellers.
In the state of California, the seller has the responsibility to pass the smog test compliance for automobile years 1976 and newer. This document is required before the transfer of ownership can be completed. The certificate is only valid for 90 days from issuance.
Insurance and Financial Responsibility
Most states require drivers to maintain car insurance or some form of financial responsibility. In the majority of jurisdictions car insurance is the requirement. Some states also require insurance to be contracted in the state where the car is transferred. For example, Michigan will not accept an out-of-state policy as proof of insurance. However, with larger insurance companies that conduct business across multiple states, separate licenses to sell insurance policies are maintained in each jurisdiction. Notice of Insurance may be required in order to transfer title.
Regardless of where a car is bought or sold, when a trade takes place between two private individuals, if the two go together to the appropriate agency, such as the DMV or local branch of the secretary of state’s office and conduct the ownership transfer accordingly, it reduces the chance of future problems with the transaction. For example, in the state of Kentucky vehicles are transferred locally at the county clerk’s office. Proof of insurance is required before the clerk will transfer the title. Before applying for transfer, the buyer must speak with an insurance agent and obtain coverage on the car. The buyer and seller can then take proof of the buyer’s insurance along with the seller’s original title of ownership to the clerk’s office and sign and transfer ownership in the presence of the clerk. A new certificate of registration showing the buyer’s ownership is immediately issued after appropriate fees and taxes are paid. The seller is immediately released from liability for the vehicle and the transaction is completed.