How to Transfer Ownership When You Sell Your Car

transfer-ownership-sell-your-car-01 How to transfer ownership when you sell your car | photo by Christian Lantry

You decided it’s time to part ways with your old car, so you posted an ad and found a buyer for it. Now it’s time to say goodbye to your vehicle. How do you transfer ownership to a new owner? Ensuring secure payment and eliminating your liability after the sale of the vehicle should be your priorities. Here are a few last-minute reminders on what to keep track of — and what not to skip — when ownership of your vehicle is about to be handed off.

Related: Prepare to Sell

  • Don’t jump the gun; make sure the sale is secure. If you accepted payment via cashier’s check, follow the steps for securing safe payment to ensure the payment is valid before you sign over the title. To prevent fraud, don’t transfer the title of your car to the buyer until their check has cleared or you’ve received full payment for the vehicle; never accept a check for more than your asking price; verify the authenticity of any cashier’s check with the issuing bank; and look up the bank’s phone number and call to verify the routing number, account number and name on the account. If you used an escrow service, wait until it tells you that payment has been received before transferring ownership.
  • If you’re dealing with an out-of-town buyer, arrange for that person to pick up the vehicle, or consider employing a professional vehicle delivery service. Delivery services transport vehicles on large hauling trucks. Prices vary depending on the length of the transport and the vehicle’s weight, but the average price to ship a vehicle across the country is $1,650, according to Forbes. Work out the cost and payment details with the buyer first.
  • In most states, license plates stay with the seller, not the car, though California is a notable exception; sellers should check their state’s laws with the Department of Motor Vehicles. If the plates remain with the original owner, remove them so you don’t retain a legal tie to the car. If the plates stay with the vehicle and will transfer to the new owner, you need to fill out the proper paperwork at the DMV.
honda-civic-type-r-limited-edition-2021-07-exterior-rear_angle-spoiler-yellow 2021 Honda Civic Type R Limited Edition | photo by Aaron Bragman
  • Transfer the title. This step is simple if you own the vehicle outright, but involves more steps if you still owe money on it. To transfer vehicle ownership, the seller must sign the vehicle’s title and hand it over to the buyer. Some states require additional information — such as the vehicle’s odometer reading, buyer’s name and contact information, and the sale price — to complete the title transfer. Additionally, select states may require a notary to oversee the transfer. If you still owe money on the vehicle, call your lender to discuss the best way to close out the loan and obtain the vehicle title.
  • In addition to the title transfer, a bill of sale may be required in some states. The bill of sale is a legal document that outlines the terms of the sale, including vehicle and payment details. It serves as a receipt for the buyer and also dismisses the seller of any liability for the vehicle. Many states offer a template for sellers to download through their DMV website.
  • Call your insurance company and have the vehicle removed from your policy.
  • If the buyer chooses to pay by money order, follow the same safe-payment guidelines for accepting checks. Verify the name and amount with the issuing bank, and request a money order from a local bank whenever possible.
  • As long as you were forthright with information about your car in the selling process, you shouldn’t be liable for anything once the sale is complete. In most states, the law assumes that private-party sales carry “as is” status; this means the vehicle is not covered under warranty and the seller is not liable for repairs if the car breaks down. Still, it doesn’t hurt to get that understanding in writing. Have both parties sign off before the vehicle transfer is complete.

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