How To Transfer Ownership When Buying A New Car

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How to Transfer Ownership When Buying a Used Car

If you've just purchased a new vehicle and are getting ready to sell your current car, understanding how to transfer ownership is essential. A successful car title transfer ensures that the buyer can register the vehicle and that you, the seller, are no longer legally responsible for it. This process can vary slightly by state, but the basic steps remain the same nationwide.

What Is a Car Title?

A car title is an official document that proves ownership of a vehicle. It includes important information such as:
  • The legal owner's name(s)
  • Vehicle Identification Number (VIN)
  • Odometer reading at the time of sale
  • Vehicle make, model, and year
When you sell your car, the title must be transferred to the buyer so they can complete the registration process in their name.

How Car Title Transfer Works

Title transfers typically involve three main steps:
  • The Seller's Responsibility: As the seller, you must sign the title to release ownership. Make sure to sign in the correct section-your state's Department of Motor Vehicles (DMV) or motor vehicle agency website will show you where.
  • The Buyer's Responsibility: The buyer takes the signed title to their local DMV or motor vehicle agency to apply for a new title in their name. Some states also require a bill of sale or a completed transfer of ownership form.
  • The State's Role: Once all documents are submitted, the state agency issues a new registration and title to the buyer.

Dealer vs. Private Party Sales

If you're trading in your vehicle at a dealership, the dealer usually handles all title transfer paperwork, and you'll receive a new title in the mail.

 However, in a private party sale, both the buyer and seller are responsible for completing the title transfer. This includes verifying odometer readings and providing the sales price, which may affect sales tax.

Check the Name(s) on the Title

Before selling your car, inspect the title to confirm how ownership is listed:
  • Single Owner: If only your name is on the title, you can transfer it without involving others.
  • Joint Ownership: If there are two names joined by "and," both owners must sign. If joined by "or," either party may sign.
  • Lienholder: If a lender's name appears on the title, you must settle the loan before transferring ownership. Contact your lender for specific instructions.

Preventing Delays

To avoid errors that can delay the transfer:
  • Visit your state DMV website for guidance on required documents and signature placement.
  • Don't scratch out or erase information on the title. If you make a mistake, you may need to apply for a duplicate title before the sale.
  • Make sure all information is complete, accurate, and legible.

Before You Sell Your Car

Selling your car privately? Protect yourself with these tips:
  • Research the Vehicle's History: Look up any recalls, check the VIN, and consider using a vehicle history report.
  • Inspect for Tampering: Check the odometer, locks, and VIN for signs of tampering or fraud.
  • Verify Ownership: Confirm the seller's name matches the title exactly. Look for signs of alteration if the title is paper.
  • Have the Vehicle Inspected: A pre-sale inspection by a trusted mechanic can uncover hidden issues.

Sealing the Deal

Here's what to do when you're ready to finalize the sale:
  • Verify VIN and Mileage: The VIN on the vehicle must match the title. Record the odometer reading on the title or disclosure form, as required by your state.
  • Remove Your License Plates: In most states, the license plate stays with the seller. You may be able to transfer your plate to a new vehicle.
  • Bill of Sale: Create a bill of sale documenting the vehicle details, sales price, date, and signatures of both parties. Some states require this to be notarized.

What Happens After the Sale?

Once the buyer has the signed title:
  • They must submit it (and any required forms) to their local DMV or motor vehicle agency.
  • In some states, the title application is included on the back of the current title.
  • Buyers may receive a temporary registration while the permanent title is processed and mailed.
  • If the buyer financed the vehicle, the state will issue the new title with a lien listed. The lienholder must release the lien and notify the DMV once the loan is paid off.

Important Reminders

  • Each state has its own DMV or motor vehicle agency. Visit their website for specific title transfer requirements, forms, and fees.
  • Most states require the title transfer to be completed within a set timeframe (often 30 days) to avoid penalties.
  • Sales tax, registration fees, and title fees are usually paid by the buyer at the time of transfer.
  • Proof of insurance may be required to register the vehicle.

Sell Your Car at AutoNation USA

Transferring a car title is a critical part of selling your used vehicle after purchasing a new one. While the steps are generally the same across the U.S., be sure to check your state's DMV website for exact instructions. By preparing your documents, verifying your title information, and following best practices, you can help ensure a smooth and legal transition of ownership.