Money matters can be tricky, no matter who you’re dealing with. But, if you add in family dynamics, things can get even more complicated.
Many experts recommend not selling large investments, such as cars or houses, to family members. It might seem convenient to pass expensive property on to someone you know and love, but that financial debt your loved one will owe you comes with a lot of risks. If you’re determined to sell your car to a relative, here are a few tips to try to minimize the problems that could come up.
Title & Taxes
Whether you’re giving the vehicle as a gift or selling it, you’ll need to sign the title over to the new owner. The protocol for transferring the title varies from state to state, so you’ll need to check with your local DMV to make sure you do everything the right way.
You’ll also have to deal with taxes on the car. In most cases, the new owner will need to fill out the paperwork and pay any taxes. You should warn them in advance that they’ll have to do these things if they take your old car off your hands.
Address the Money Issue
If your family member is going to be buying the car from you, you’ll have to have the awkward conversation about how they’ll be paying. Do some research online to see how much your car might be worth, and decide how much you want to charge them. You’ll also have to be straightforward about how you want them to pay, especially if they can’t give you a lump sum. It might even be wise to draw up a contract with your relative, and have it signed by a notary. This could be a good form of protection for everyone involved.
Keep in mind that things could get awkward if you require a monthly payment for the vehicle. If they can’t make the payments on time, you may have to seriously consider repossessing the car. To take some of the financial heat off of yourself, it might be wise to have your relative finance the car through a bank.
Get the Car Checked Out
If you’re wanting to minimize potential problems and drama, it would be smart to take the vehicle to a trusted mechanic for a check-up, preferably with the potential new owner. That way, the two of you can come up with a plan of what to do in case there’s a problem with the car. This also gives your relative time to back out of the deal, if necessary.
Paying out-of-pocket for an inspection is something you might not do for a stranger, but since you have a relationship with the buyer, this would be a wise move.
Before you make the final decision to give or sell your car to a family member, make sure to really weigh the pros and cons of the whole situation. If you decide it’s a bad decision to do business with a relative, you can always get a risk-free offer from us!