There’s plenty of paperwork when buying and registering a new car, whether new or used. Among the official forms is the car title. What is a car title, and how do you get one when car buying? We take a look at how to transfer a car title.
What is a car title, and why is it important?
According to iSeeCars, it’s helpful to know how to transfer a car title when buying a car, especially for private sales. The car title is the legal document that shows who owns the car. It’s needed to register the car with the Department of Motor Vehicles (DMV) and to get license plates.
When buying, make sure the title is “clean,” meaning it includes the current owner’s name and doesn’t show any loans or liens. To get rid of a lien, the current owner should pay off any loans that use the car as collateral. This can sometimes be done as part of the purchase if the buyer and seller work with the lender.
To sell a car privately, the owner should have the car title or request a replacement from the DMV. Some states also require owners to retitle a car from a different state when moving there. Buyers generally don’t want a car without a title since registering a car without one often requires extra paperwork, extra time, and sometimes extra inspections.
If a car does not have its title, it could just mean that the owner lost it. However, it could also mean the car was stolen or has a salvage title. Buyers may want to check the car’s VIN with iSeeCars to look for liens, salvage titles, and stolen reports. Check the rules in your state since there are differences between states. In Connecticut, a title is not needed to register a car that is more than 20 years old.
How do you transfer a car title?
A dealership can handle the car title process for new or used cars purchased there, although it will cost $100 to $300. To save money or if the car was bought in a private sale, here’s how to transfer a car title.
In a private sale, the person selling fills in information, like the current mileage, and signs the car title. The new owner signs as well, usually on the back of the car title. There are 16 states that also require a bill of sale. The bill of sale is a legal document that acts as a receipt and gives the terms of the sales agreement. There are templates available online. According to Investopedia, if you’re in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, or Montana, the bill of sale will also need to be notarized when the sale has certain conditions.
The buyer takes the signed title plus the bill of sale, if there is one, to the DMV when registering the car. In some states, the buyer has 30 days to take care of transferring the car title. A car title application will be needed, and there will be a car title fee. Buyers are likely to need extra paperwork for vehicles bought from family members, transferred in a divorce, inherited, or gifted. Registering the car will also require the buyer’s driver’s license, insurance card, and registration forms. Some states require smog, safety, and/or emissions tests too. Lastly, buyers may also need to pay sales tax and registration fees. Check your state’s DMV website for details.
The DMV will then mail the buyer a new car title listing that person as the owner. Car and Driver reminds us to keep in mind that if the buyer finances the car, then the car title will be mailed to the owner once the car is paid off.
What happens if a car title is not transferred properly?
Transferring the car title protects the seller. If it isn’t properly transferred, then the seller is still the official owner of the car and could be liable if the car is involved in something illegal. The previous owner could also be on the hook for parking tickets or if the car gets impounded. Issues with the transfer could occur if the seller doesn’t fill out the information properly on the car title when selling the car or if the buyer doesn’t then transfer the title and register the car.
Knowing about car titles will help protect you if you’re selling your car and will protect you from buying a car with a problematic history and make the registration process simpler.
RELATED: How to Sell a Car Without a Title