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15 Jun 2009 | Text by Vincent Tan, Photos by Lynda Kho | Category: Car Selling Advice
We provide eight comprehensive steps and the necessary documents that you should be making use of when selling your car to a prospective buyer.
Before going for the test drive, the seller will need to get the indemnity form signed by the interested party who wishes to test drive the car.
This 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 buyer during the test drive.
Step 2. Signing the Sales Agreement Form
Once the price has been agreed upon, both the buyer and seller will proceed to endorse the sales agreement form. The buyer will have to place a deposit to confirm the purchase.
Step 3. Issuance of Receipt
After the deposit has been placed, the seller should issue a receipt for the deposit collected. This receipt serves as a confirmation for the receipt of the deposit given by the buyer to the seller.
Step 4. Source for Loan Facilities & Insurance
Unless the buyer is paying cash in-full for the car, he/she will need to source for any loan facilities on his own accord. Once approval for loan has been given, the buyer can then notify the seller. The seller can then demand to see the documents as proof of the approval for the loan.
The buyer is expected to source for and activate a motor insurance under his name, which is necessary in order to do the transfer of ownership of the vehicle at a later stage.
Step 5. Full Settlement of Existing Loan
If the vehicle is still under financing, the seller is to check on the outstanding loan amount and to make the necessary payment to the finance company before the ownership of the vehicle can be transferred to the buyer.
Step 6. Transfer Fee Payment and M01 Form
The ownership of the vehicle is now ready to be transferred.
A transfer fee is to be made payable to the Land Transport Authority (LTA). This is to be borne by the buyer and it is on top of the agreed selling price for the vehicle.
The M01 form is the official form that needs 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 his original NRIC to effect the transfer. The seller also has to produce his original NRIC.
The buyer is to ensure that the road tax is still valid when the ownership of the vehicle is to be transferred.
Step 7. Balance Payment to Seller
After the ownership of the vehicle has been transferred to the buyer, the buyer will pay the balance payment (car price - deposit - buyer's loan amount) to the seller. The remainder will be issued by the finance company directly to the seller upon submission of the proof of transfer.
Alternatively, a buyer not taking a loan will pay the remaining balance payment in full cash or cashier's order to the seller.
Seller should issue a receipt for the balance payment collected. The receipt serves as a confirmation for the receipt of the balance payment.
Step 8. Signing the Hand-Over Form
Once the ownership transfer has been done, the vehicle is now ready to be handed over to the buyer.
This hand-over form specifies the official hand-over of the vehicle. The buyer now bears the responsibility for any fines, summons or any claims relating to the vehicle from the date and time of hand-over.
Note : Steps 6 to 8 should all be done on the same day at the Land Transport Authority office.
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