How Do I Sell a Car With an Owner Finance Contract?

To sell a car with an owner-financed contract, include owner financing-available language in advertisements, use a loan-agreement template to create a contract, and consult with an attorney regarding the legalities of the contract and interest rates, according to Lee Nichols for Checking the buyer's credit is recommended.

The contract must include a description of the vehicle, the vehicle identification number and the details of the loan, such as the interest rate and payment due dates, explains Nichols. The contract should also include any consequences of default and any conditions that void the contract. Before signing the contract, Nichols recommends having the buyer supply a copy of his credit report or obtaining written authorization from the buyer to check his credit with all three major credit bureaus.

Nichols also recommends verifying the buyer's employment and checking his references. For the contract to be valid, both buyer and seller must sign in the presence of a notary with witnesses. Requesting the buyer contact his insurance agent and asking for proof of insurance listing the lien holder is also advisable. Once the transaction is complete, take the title to the DMV and have a new title created listing the seller as the lien holder.