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Selling a vehicle is simple, but it’s also a legal transfer of an asset. If you’re selling a vehicle, it’s important to know how to properly transfer the title. Knowing how to properly transfer the vehicle title is important when it comes to protecting yourself, as well as your vehicle’s next owner.
In most states, it’s illegal to sell or transfer ownership of a car without having a title that proves the seller is the legal owner of the vehicle. Selling a car without a title is considered fraud and can result in heavy fines and penalties. If you’re found guilty of selling a vehicle without a title, you may face jail time and hefty fines.
To avoid running afoul of local laws, make sure to get a title before selling your vehicle. The steps for getting a title for your car vary by state. However, you’ll need to apply for a duplicate title if the old one is lost or damaged. The only valid title is the original and undamaged certificate of title.
When applying for a duplicate title, you’ll likely need to provide proof of identity and insurance as well as other documentation depending on your state’s laws as well as pay a fee. Only the last titled owner of the vehicle is eligible to obtain a duplicate title. If you were not the last titled owner, you may need to obtain a title through a different method of title recovery.
Go to the DMV with your buyer when they transfer the title. If they don’t switch it over right away, it could create problems for you later because you’re still the legally titled owner. Your name and address are on that title and now that’s information they have access to. They may commit a crime in the vehicle and leave it, if your name is connected to the VIN, you’re going to be questioned. Or maybe they rack up traffic tickets that end up being attached to your license because you’re still the owner of the vehicle.
If you have a lien on your vehicle, you must get a vehicle lien release prior to transferring the title. If you have a lien on the title, you are not the title holder and are not authorized to transfer ownership. Selling a vehicle with a lien will create problems for the buyer.
When selling a vehicle, take a photocopy of the title signed over and a copy of the buyer’s identification. You cannot use this to get a title in the future; only the original title is valid for this purpose. However, having made a photocopy, you have evidence that at some point you sold the vehicle, even though you are still shown as the titleholder.
To prove that the transaction took place, you’ll need to provide the seller with a bill of sale. The bill of sale is absolutely necessary, but it’s only a receipt and is not enough evidence to obtain a title on its own. For more tips, check out our article How to Write a Bill of Sale.
This occurs more frequently than you may think. Oftentimes the primary vehicle driver and the vehicle titleholder are not the same people, they may be a family member or spouse. Make sure that the person signing the title transfer is the prior owner. If there is more than one name listed on the title, everyone must sign the title transfer. The only person authorized to transfer ownership of the vehicle is the person or people listed on the title.
Selling a vehicle is a simple process, but it’s also a legal process, it’s a legal transfer of assets. You should make all efforts to make sure the title transfer is done correctly so it doesn’t come back to haunt you or cause problems for your buyer down the road.
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