Selling your car privately involves a good deal of paperwork. It's inevitable. The world is just one big mountain of paperwork. Unfortunately, it's a necessary evil. Registration, finance and insurance documents will all need to be provided to the new owner so that they can transfer and register the vehicle in their own name. Until this transfer is complete – you will remain legally responsible for that car – and that's not exactly a position you want to find yourself in.
So, before you put the car up for sale, it's worth taking a little time to familiarise yourself with the process.
Some people buy their cars with bank financing. Once you've paid the car off, the bank should issue you with proof of ownership documentation – stating that there is no outstanding finance on the car. Then, once the full ownership of the car has been transferred over to your name, the bank will issue you with the original Registration Certificate.
This certificate is usually proof enough that the car has been paid off, and can only be registered directly into the name of the new owner. It has to be accompanied by a copy of the Bank's Proxy ID, the confirmation of no funds outstanding and a Change of Ownership form signed by the Bank's Proxy.
Remember; if the bank has failed to issue you with the Registration Certificate, they still remain the legal Title Holder of that vehicle. Even if they're not the owner. So, if you haven't received it – you need to hassle them for it.
Ideally, you'd want to actually own something before you can sell it. If you still have outstanding finance on the vehicle, though, you can still sell it. It only adds an extra step to the process.
If you still owe the bank money for the car, but you'd like to sell it, you'll need to contact the bank which financed the vehicle and notify them of your intention to sell the car. You may then request a settlement letter, which indicates the total amount still owed.
You then present this letter to any prospective buyers and instead of paying you the money, they simply pay the bank.
A settlement letter works in your favour, in that it acts as proof that the car wasn't stolen. Another good idea is to obtain a South African Police Clearance Certificate to ensure the car is not stolen or involved in any criminal investigation
If your car was gained through a lease agreement, that's an entirely different story. You can't sell a leased car; only transfer the agreement from one person to another. This transfer is usually arranged via the bank.
It's important to put a written sales agreement into place. Or a receipt, if you will. It's not compulsory, but it is a smart thing to do, as it protects both buyer and seller. If any disagreements were to arise later on down the road, this agreement serves as your proof of sale.
According to the Consumer Protection Act, you are required to disclose any and all faults with the car before the new buyer can take it off your hands. It's a good idea to put these, in writing, into the sales agreement. This way, the new buyer can't give you trouble about those problems later on. They agreed to purchase the vehicle voetstoots – as is and without warranty.
If the car is under warranty, notify the dealership that you are selling it.
Even without the sales agreement, you should still provide the buyer with a receipt of sale. The receipt should contain the sales amount, payment method, all of your personal details and also a full description of the car's particulars – the make, model, engine size, registration number and chassis number.
Both parties need to sign this receipt, with the date and time of sale. You both retain a copy of everything. This is necessary so that, if any offences are committed shortly after the sale, you have proof that it couldn't have been you.
Here are some other things you need to give to the buyer:
And now we get to the part which everybody despises – government paperwork.
As the seller, you are required to notify the Department of Transport that the vehicle has changed ownership. You and the buyer could do all of the following steps together and save a lot of time, but that isn't always possible.
So, before re-registering the car to the new owner, you are required to complete and submit a Notification of Change of Ownership form. This is called an NCO, it is yellow, and can be found at any traffic department. The NCO notifies the Department of Transport that the ownership of the vehicle has changed hands.
You will also need:
The buyer then takes the vehicle for a roadworthy test, which the vehicle needs to pass before the buyer can register the car in their own name. The seller can also do this, but because roadworthy certificates are only valid for three weeks, it's usually better for the buyer to do it.
In order to obtain the roadworthy certificate, you'll need to go to the nearest vehicle testing station with these documents:
A new owner normally has 21 days to register the car into their new name. In order to get the vehicle registered in the new owner's name, the buyer or seller has to visit the nearest vehicle registration outlet with the following documents: