14 May What to do when selling to a private buyer?
8 steps required when selling your car to a private buyer and the necessary documents that you need which can be printed by clicking on the forms below;
1. Indemnity form for test drive
The seller should need to get the test drive indemnity form signed by the prospective buyer when going for test drive.
The test drive indemnity form indemnifies the seller from any liabilities should there be damage to the vehicle, as well as death or personal injury that is sustained by the prospective buyer during the test drive.
2. Vehicle sales agreement
Once the price has been agreed, both the seller and buyer will then sign the vehicle sales agreement. At the same time, the buyer will have to pay a deposit either by cash/cheque or cashier’s order to confirm the purchase.
3. Receipt for deposit
Once the deposit has been collected from the buyer, the seller should then issue a receipt to the buyer.
4. Getting a loan and insurance
Unless the buyer is paying cash in full for the car, if not the buyer will have to look for a bank or a private finance company to get a loan. Once the loan had been approved, the buyer should notify the seller and the seller could demand to see documents from the bank or a private finance company as proof for the approval of the loan. *Note; some private finance companies do not provide documents for the approval of the loan as it is approved verbally.
The buyer is required to source for a valid motor insurance under his name, which is necessary in order to do the transfer of ownership of the vehicle at a later stage.
SGCarconsign.com.sg can help to source for a loan and insurance for your purchase.
5. Settlement of seller’s existing loan
If the vehicle is still under financing, the seller should either call or fax a full settlement form to check on the outstanding loan amount. The seller should arrange to make the necessary payment to the finance company before ownership of the vehicle can be transferred to the buyer. The buyer could demand to see documents of the outstanding loan amount from the finance company. *Note; some finance companies do not provide documents for the outstanding loan amount as it is disclosed verbally to the seller.
6. Balance payment to seller
The buyer will pay the balance payment (car price minus deposit minus buyer’s approved loan amount) to seller upon collection of the vehicle. The buyer should make sure that the seller full
settles his outstanding loan (if any) on the same day or latest by the next working day so that ownership can be effected as soon as possible.
However, if the buyer is paying full cash for the car and whereby the buyer still has an outstanding loan, they should both meet at the finance company. The buyer will then issue exact payment for the seller’s outstanding loan amount to the finance company and the remaining balance to the seller.
Seller should issue a receipt for the remaining balance collected.
7. Handing over of vehicle
The vehicle can be collected by the buyer even before the ownership had been transferred as long as the seller agrees and the buyer should have a valid insurance. A handover form needs to be created to specify the official handover of date and time. The buyer will then bear the responsibility for any fines, summons or any claims arising after the handover.
8. Transfer of ownership
It is time for the ownership of the vehicle to be transferred.
A transfer fee of S$11/- is to be made payable either by NETS or cheque to the Land Transport Authority Office (LTA). This is to be borne by the buyer on top of the agreed selling price for the vehicle.
The M01 form is the official form required to be submitted to the LTA. It needs to be endorsed by both the buyer and the seller. The buyer is to present a valid motor insurance certificate and both parties have to produce their original NRIC to effect the transfer.
The buyer is to ensure that the road tax is still valid when the ownership of the vehicle is to be transferred.