How To Finalize The Sale Of Your Car
If you’re in the market for a new car, and want to get more out of your old one than what the dealer will offer, you might have asked yourself, “What do I need to sell my car?” Well, there’s more than just taking out ads and showing it to prospective buyers. At some point, you need to close the deal, and you need to know what to do to legally transfer ownership of your car.
Transfer The Title
The car’s title is the legal document proving that you own the car. You must have the original copy in your possession, and it must be free of any liens before you can transfer ownership. There are different requirements for title transfers in every state, so be sure to read up on what’s required in yours. If you have lost the title to your vehicle, you can apply for a duplicate title from your state Department of Motor Vehicles (DMV), usually for a small fee. This may take time to process.
If you’re still making payments on the car, you’ll have to make arrangements with your lending institution. If you’re paying off the loan up front, you must obtain a lien release from the lender, which states that there are no outstanding loan obligations on the vehicle. If you’re unable to pay off the loan immediately, then your best option is to close the deal at the lending institution. There, you can use proceeds from the car’s sale to pay off the remaining balance, then sign the title over to the buyer. A third option, if the lender is out of state, or if you cannot pay off the loan even after selling the car, is to get a temporary permit from your state’s DMV, then pay off the loan and mail the new owner the title as soon as possible. But you should try to avoid doing this if you can.
If there’s still a lien on your car even after it’s been paid off, you’ll need to contact the lending institution to get the matter resolved. If they’re no longer in business, or are uncooperative, then you can contact the Federal Deposit Insurance Corporation to obtain a lien release. You should note that this could take up to a month, so plan in advance.
Once you and the buyer have signed the title, you must report the change in ownership to the DMV in your state. Many states require that you do so within a certain amount of time, sometimes as few as five days. This can be accomplished by filling out a transfer form at the DMV. Your state DMV may also require that you pay a transfer fee.
Bill Of Sale
The bill of sale is a receipt for both the buyer and seller, that declares transfer of ownership and lists contact information, the car’s details, the car’s price, and mileage. Your state may or may not require this, but it’s a good idea regardless. To get a blank bill of sale, contact your state’s DMV – most have one available for download on their websites – or visit an office supply store. Make copies for the buyer and yourself.
Other Documents
Some states may require other documents when you sell your vehicle, including those indicating the vehicle has passed an inspection, emissions or smog test. Be sure to check with your state’s DMV to find out the exact requirements.
Wrap Up
Unless you live in California, remove your license plates from the car or have them transferred at the DMV. You may have to return the plates to the DMV, depending on what state you are in. The buyer should contact his or her state’s DMV ahead of time to apply for temporary tags for the car. Contact the DMV to let them know the car has been transferred to a new owner, as well as your insurance company to either cancel your current policy or transfer it to a new vehicle.
In most states, as long as you’ve transferred the title, met the legal requirements, been forthright about the car’s condition, and followed the other guidelines presented here, then you should no longer have any liability for the vehicle. Most states regard person-to-person car sales as an “as is” transaction.
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