Part 3 – Completing the Sale and Tying Up Loose Ends
So here you are: you’ve created an effective ad, received plenty of interest on your vehicle, met the eventual buyer, had a successful showing of the vehicle, and now you’re ready to exchange your car’s title for their hard-earned money. Here are my final pieces of advice for you as you complete your North Carolina car sale.
Keys to Success
Have Title in Hand
The first and most important step in finalizing the sale is to make sure you have the car title ready and available to sign over to the buyer. If you own the car outright, this means digging it out of your “Important Stuff” folder hidden in your attic somewhere (or safety deposit box, if you’re the organized type).
If you have financed the car, this is trickier; you’ll need to pay off the loan in full before the lender will send you the title, and that process can take weeks. The best approach here is to plan ahead and pay it off before you even list the car for sale, but if you don’t have the cash available then you will have to work with the buyer to find an agreement that works. A typical arrangement is to collect payment in full from the buyer, hand over the car subject to receiving title, then meet again once title is received to complete the deal. Be careful, however, because if anything happens to the car in the interim you could be in for a really messy situation. I highly recommend finding a way to pay off the lien in advance to avoid this possibility.
Complete a Bill of Sale
While the state of NC does not require a bill of sale for a private vehicle sale, completing one is a great idea and *spoiler alert* you will need it later on. The DMV does provide a generic bill of sale form that is very useful and perfectly suitable for your transaction. While only the seller needs to sign, I would obtain the buyer’s signature as well to help with any potential legal disputes later on. You should provide a copy to the buyer, but keep the original for your records.
De-Program Your Car
Nowadays, most cars have built-in garage door openers and Bluetooth functionality, so be sure to remove all of your information from the car before sending it off to its new home. This is one of those “better safe than sorry” things, and helps to avoid that unpleasant thought two weeks down the road when you realize the guy who bought your car can open your garage on a whim and steal all of the junk in there that you’ve been meaning to throw out for years.
Sign the Title Over to the Buyer
This is it – the big day! Time to say goodbye to Old Red and send her off to her new home in the suburbs. Signing over your title requires a notary, which your bank of choice likely provides for free. It’s a great place to meet for the swap anyway, so head over (with your SO or a friend, because you won’t have a car when this is over) and get in line for notary services. Everyone listed on the title needs to be present, so make sure you husband/wife/parent/benefactor is there with you or the notary won’t be able to do their job.
Turn in your Plates
The last step before saying your final goodbyes is to remove your license plate from the car, as you’ll need to turn in or transfer the plate in order to cancel insurance on your vehicle. This step is very important and very easy to forget! Your buyer should have a plan for getting the car home – either a temporary plate from the DMV or a plate from one of their other cars will work for the short trip. The buyer should also insure the car before driving off with it, and you may want to remind them of that. Once you have the plate, head over to the DMV and either have them transfer it to your new car (if applicable) or simply turn it in.
Cancel your Insurance
You don’t want to pay insurance for a vehicle you no longer own, so make sure to call your insurance company ASAP to cancel coverage for the vehicle. They will ask if you have turned in your plates yet, to which you will confidently reply “indeed I have!” Or just “yes”, depending on your mood.
Get a Property Tax Refund
Hopefully, the nice person at the DMV explained to you that you may be due a property tax refund on your vehicle, but sometimes the people at the DMV are not quite as friendly and helpful as we would like. So let me tell you – when you sell a car in North Carolina, you are due a property tax refund! You paid a year’s worth of property taxes the last time you renewed your registration, so you’ll get back a pro-rated portion depending on how long ago that was. You’ll need your proof of plate surrender and you’ll also need a copy of your bill of sale (see, told you) so gather up both of those and head to your local county’s tax office. Of course, this is a tax refund we’re talking about, so be prepared to wait 4 to Infinity weeks before the refund check gets to you.
Was it a Business Use Vehicle? Set aside money for taxes!
I wouldn’t be doing my job if I didn’t warn the small business owners out there that if you had placed your car in service for your business, you may owe taxes on the sale of your car depending on the depreciation you’ve taken on it for your business. Consult your CPA and prepare to owe a little bit more come tax time.
I hope you’ve enjoyed this three-part series on selling your car in North Carolina! Please share with anyone you think may benefit, and check out below for links to Part I and Part II of the series: