Car Title Transfers: From Simple to Sophisticated
If you recently purchased a vehicle or are in the process of selling, one of the most important steps is to transfer the title of the car. The title is the legal document indicating the owner of the vehicle.
Laws and regulations relating to securities transfers vary from state to state. The process and paperwork is generally straightforward, but check with your state’s Department of Motor Vehicles for specific requirements.
How to transfer a car title as a buyer
As a new vehicle owner, it is important to process the paperwork as soon as possible. You won’t have legal ownership of the vehicle until you sort out the new title, which means working with the seller to make the transfer happen. This usually follows a few defined steps.
- Confirm that the seller is the legal owner: Check the vehicle’s VIN and ownership documents to make sure you’re not buying a stolen vehicle. You should also note the odometer reading at the time you purchase the vehicle.
- Seller transfers title: The seller of the vehicle must transfer title to your name by signing the release and transferring ownership to you.
- Make sure the privileges are cleared: If the seller has a loan on the vehicle, this lien must be resolved. A statement from the lender that the loan has been paid – or simply verifying that the title is listed as non-lien with the DMV – should suffice.
- Get a new title: Once the owner has signed the title and all liens have been cleared, go to the DMV to get the new title issued in your name.
- Provisional title issued: In many cases, a DMV will provide a temporary title and send the final document within a few weeks.
The title transfer process is less complicated if you choose to buy from a dealership. Most dealerships will take care of this for you. But if you want to buy from a private seller, it will be up to you and the seller to make sure the paperwork is properly processed.
How to transfer a car title as a seller
If you sell your vehicle, you must transfer ownership to the buyer. This is an especially important step because you still have legal ownership until the transfer occurs. Until then, you will be held responsible for any legal issues or costs incurred by the new driver of the vehicle.
As the seller, you must sign the old title so that the buyer can obtain a new title in their name. To simplify the process, go to the DMV with the buyer, then have the documents notarized if your state requires it.
If more than one person is listed on the title, you should check if the word between the names on the title is “or” or “and” before finalizing the transfer. In the case of an “and”, you will also need the other person listed to sign the transfer.
Trading in your car with a dealer involves less paperwork, although you’ll likely make less money doing so. However, a dealership will likely handle the title transfer for you. You’ll still need to sign the title, but it should take less time overall.
How to transfer a car title with a loan
Although transferring a vehicle title is fairly simple, selling or buying a car with a lien can be a little more complicated.
If the current owner is still paying off a car loan, the lender will likely have title. Check with the lender to make sure the loan is fully paid off so the new buyer can receive the title. Then you can request that proof of loan repayment be sent to your local DMV so that the title transfer can take place.
Although the documents needed differ from state to state, when transferring to your DMV, you will most likely need the following documents for the bill of sale:
- Selling price
- Odometer reading
- Date of sale
- Car insurance
- Name and address of buyer and consignee
- License Information
The bottom line
Transferring your vehicle title is the last step in the process of buying or selling a car, so it’s important that it’s done correctly. Make sure that all vehicle owners sign the title deed to the buyer and that all liens are cleared in order to properly complete the sale.
Since the rules vary from state to state, check with the local DMV and call ahead to make sure you have all the necessary paperwork before heading to the new title.