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When it's time for a new car or you have an extra vehicle you're not driving, you may be considering selling your car. With all the legalities involved in selling a car and the stress of dealing with car buyers calling and texting you, the thought of selling your car may make your head spin.
Below, we'll cover all the basics on how to sell a car and give you step-by-step instructions to ensure the process is simple and adheres to Canadian laws.
How To Sell a Car
Selling your used car is a multistep process that can easily leave you wondering where to start and what your next steps may be. With these 12 steps, you'll have a firm grip on how to sell a car in Canada with relative ease.
Step 1: Determine the Value of Your Car
When deciding whether to sell your car, the first step is to determine if it's even worth selling. If you have a loan on the vehicle, this process starts with finding the loan balance, which will be the bar that determines if you should sell your vehicle.
Next, determine the value of your car through Clutch’s trade-in estimator or Kelley Blue Book (KBB). When using KBB, remain honest with yourself about your vehicle’s condition. If your vehicle is in less-than-ideal condition or has mechanical issues, enter that so you can get an accurate value range.
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Clutch’s trade-in estimator will give you a rough estimate for your vehicle instantly. If you want a final price, there’s an additional section with detailed questions and an option to upload photos. In 24-48 hours, you'll receive an email with a firm final price from Clutch.
If the value of your car exceeds the loan balance, you can likely sell the vehicle without leaving a balance on the loan.
If you don’t have a loan on the vehicle, use the KBB private-party value to determine if the sale price will leave you enough money to afford a replacement vehicle.
Step 2: Determine an Asking Price
The asking price of your vehicle is your ideal selling price for your vehicle. You can determine this using the KBB private-party price range and the price of similar cars in your area.
The first part of pricing your vehicle is to set a bottom-dollar price, which is the lowest amount you’ll accept for your vehicle. Ensure this price leaves you enough money to pay off any existing loans on the car and buy a replacement vehicle.
Use that bottom-dollar price as your jumping-off point, then set your asking price slightly higher than that to leave yourself some negotiating room.
If this leaves your asking price within KBB's private party range and in the same range as similar cars in the area, you're good. If you've gone over that range, back the price down as far as you can while still leaving enough money to pay off your loan and get a replacement vehicle.
Remember, this is simply your asking price. Most car buyers will try to negotiate the best price, so make sure there's room to wiggle.
Step 3: Prepare the Vehicle for Sale
While no pre-owned car is perfect, you want to make yours as good as you can. If your car has any lingering repair needs or just needs a good cleaning, now's the time to handle that. This will give your buyers peace of mind that this is a well-maintained vehicle.
You should also clear out all your unnecessary personal items from the vehicle. If you plan to drive the car while trying to sell it, you can keep essential things in place, like your cellphone charger or GPS. But you should clear everything else out so a buyer can easily purchase the vehicle and take it home the same day without waiting on you to clear it out.
During this process, you'll also want to collect all your vehicle's documents to ensure they're in order. This includes the vehicle registration permit and service records. You may also want to pull a vehicle history report, such as a Carfax, to show potential buyers the vehicle wasn’t in an accident and the odometer reading is accurate.
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Step 4: Order a Used Vehicle Information Package
If you’re selling your used car in Ontario, Canada you must include a used vehicle information package (UVIP). The UVIP is the seller's responsibility and ordering it early in the process is key to a smooth transaction.
The UVIP includes key vehicle information, like:
- Vehicle details (year, make, model, colour, body type, engine, and power)
- Vehicle registration history
- License plate information
- Vehicle lien information
- Average wholesale value of the vehicle
- Retail sales tax information
- Vehicle condition and mechanical fitness
- If it's a salvage vehicle
The UVIP will also include a bill of sale section for finalising a transaction. You can order the UVIP through your province online.
Step 5: Decide Where To Sell Your Vehicle
Sure, you can park your car on the side of the road, toss a “for sale” sign in the window, and hope for the best, but you're vastly limiting the number of potential buyers. Instead, review multiple online used car sales sites to determine which is best for you.
There are plenty of free options with limited features, or you can pick a paid listing service with more traffic and features. Your choice depends on your budget and urgency to sell the vehicle.
If you choose to sell your car yourself, always advertise it “as-is,” meaning what the buyer sees is what they get. Selling it as-is prevents a buyer from pursuing legal action if the car they purchased from you breaks down after they buy it.
You can also decide to trade in your vehicle instead of selling it to a private buyer. A trade-in offers you several benefits. First, there’s no need to deal with prospective buyers calling and texting you all day. Second, all the paperwork is handled for you. Finally, and most importantly, some provinces deduct the value of your trade-in from the cost of your new vehicle, reducing the sales tax you pay on it.
You can get a trade-in estimate for your car online with Clutch’s trade-in estimator. If you’re not in the market for a replacement vehicle, we can still help, as we purchase quality used cars too.
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Step 6: Take High-Quality Pictures
Pictures are generally the first things any potential buyer looks at. With high-quality photos, the buyer feels confident to contact you and set up an in-person visit.
There's no need to get professional pictures taken, though. Instead, just make sure to photograph the vehicle from all angles inside and out. Also, take detailed pictures of any flaws. It may seem counterproductive to take pictures of the flaws, but this candidness will give the buyer confidence that what they see in the images is what they'll see in person.
Also, including flaws eliminates wasted time when buyers arrive only to find an unacceptable scratch, dent, or other flaw in your vehicle.
Step 7: Post Your “For Sale” Ad
When listing your vehicle for sale online, you should always be as open and forthright as possible. If the car is in excellent shape, feel free to highlight that. However, if it has a few flaws, make sure to list those too. Car buyers will appreciate knowing all this information upfront, plus it builds trust.
Also, make sure to list all the key features and upgrades a buyer may want to know about. For example, if you have a vehicle that predated Android Auto and Apple CarPlay, but you installed an aftermarket head unit that includes these desirable features, highlight that.
And of course, include multiple good methods of contact, including cell phone, email, and WhatsApp. Also, let buyers know how you prefer to communicate: phone call, messaging, or email.
Other must-have information in your ad includes:
- Year, make, model, series, and trim level
- Vehicle identification number (VIN)
- Kilometers
- Exterior colour
- Interior colour
- Engine size and number of cylinders
- Transmission type
- Driveline format (front-wheel drive, all-wheel drive, rear-wheel drive, etc.)
Step 8: Field Potential Buyers' Phone Calls and Messages
With your “for sale” ad live, the calls and messages are hopefully pouring in. If your ad was thorough, most callers should ask only a few questions before requesting a test drive.
Sometimes car buyers don't thoroughly read the ad. Instead, they see a car they like and immediately scroll to the phone number. These buyers may ask you questions you already answered in the ad. It can be frustrating to answer these questions repeatedly, but keep your cool and answer the questions politely. You never know if this might be the right buyer for your car.
Most importantly, remember, there are no stupid or pointless questions. If the buyer's asking a question, it’s important to them. Answer it as best you can and move on.
Step 9: Arrange In-Person Visits and Test Drives
Every car sale will eventually lead to the point where potential buyers want to see the car in person and test drive it. Set up a 30- to 40-minute meeting at your home or a public space for the potential buyer to view and test drive the vehicle.
Before the meeting, draft a liability waiver that makes the test driver liable for any damages to your vehicle during the test drive. Once you meet with the potential buyer, ask for their driver's license and take a picture of it or scan it for your records. Also, have the buyer sign the liability waiver.
From there, give the buyer space to look the vehicle over but be available to answer any questions. Once the buyer completes a visual inspection, allow them to take it for a 20- to 30-minute test drive. It's up to you whether you prefer to ride with them or let them drive the vehicle alone.
The buyer may also want to take the vehicle to their preferred mechanic for a quick inspection. This is a typical request and will help build the buyer’s confidence in buying your vehicle.
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Step 10: Negotiate the Deal
The buyer loved your vehicle and wants to make a deal, but they likely want the best price possible. So, the negotiation process begins.
Give the buyer your asking price and let them think that over. They will likely come back with a lower offer, but don't be afraid to come back with a counteroffer that’s closer to your asking price.
Always keep your bottom-dollar price while negotiating, as you must be able to pay off any loans on the vehicle and have the cash remaining to get a new vehicle.
Once you agree on a price with the buyer, it's time to close the deal.
Step 11: Close the Deal
You've settled on pricing and it's time to seal the deal. At this point, verify the buyer's funds, whether it's cash, a bank transfer, or certified cheque. Collect the funds, then complete the bill of sale section of the UVIP and give that to the buyer. Avoid high-risk transactions like personal checks or PayPal or Venmo transfers.
Complete and sign the “Application for Vehicle Transfer” section on the backside of your vehicle registration permit and give the buyer the vehicle registration permit. Without this, they can't transfer ownership of the vehicle.
In some provinces you may also need a safety certificate. In Ontario, for example, selling a used vehicle to anyone other than your spouse requires a safety standards certificate from a licensed inspection station. Manitoba and Newfoundland also require a safety standards certificate for all used-car sales.
British Columbia, Alberta, Saskatchewan, and Quebec all require a safety standards certificate if the vehicle is brought in from outside the province.
Remove your license plates and any remaining personal items from the vehicle and allow the new owner to arrange vehicle transport to their home.
If your vehicle has an existing lien on it or you still owe money on the loan, use the funds from the buyer to pay off the lien or loan so the new owner can complete the ownership transfer.
Step 12: Remove Car Insurance
Once the sale is complete, contact your insurance company and immediately remove your sold vehicle from your policy.
Streamline the Process of Selling Your Vehicle
Figuring out how to sell a car on your own can get overwhelming, but with these 12 steps, you're on the right path to offload your old wheels and pick up a new car. While these steps will help, you can make it even easier by skipping the stress of a private-party sale with Clutch.
Not only does Clutch offer a large inventory of quality used cars and a stress-free online car buying experience, but we’ll also take your car as a trade-in or purchase it outright. What's more, our online process allows you to trade or sell your car without setting foot inside a dealership.
Just use the Clutch online estimator to get an initial estimate for your car. If that offer is acceptable to you, we'll perform a full inspection of your vehicle and provide you with an official appraisal.
If the appraisal works for you, we'll either apply your vehicle's trade-in value to a pre-owned Clutch vehicle or cut you a cheque if you choose to sell it to us.
Trading with Clutch also means we deduct the trade-in value of your car from the sales price of your new vehicle, reducing the sales tax you pay on it. It’s a win-win.
