The purchase or sale of a vehicle requires transferring its title, the document that confers ownership. It is issued by the state’s Department of Motor Vehicles (DMV). A vehicle's title states what type of car it is, its Vehicle Identification Number (VIN) and the mileage at time of purchase. Although it might sound complicated, transferring a title is a simple two-step process. The owner releases his/her ownership, then the buyer transfers the title and registers the car. There's usually a fee involved. Depending on the state, a bill of sale or transfer of ownership form may be required to finalize the transaction, and sometimes the signatures have to be notarized.
WHEN IS IT REQUIRED?
There are several instances when transferring a car title is required. These are some:
Selling or buying a car
Paying off a loan
Transferring a vehicle to a family member
Inheriting a vehicle
Gifting or donating a vehicle
SELLING OR BUYING:
If you buy a car from a dealer, they often handle the paperwork. If it's a private party sale, the owner signs the title releasing his/her ownership and then the buyer signs and takes it to the DMV to apply for a Certificate of Title for a Vehicle: a state-issued registration under the new owner’s name; this may entail a fee.
Generally, the lienholder takes care of the removing his/her name from the title, signs the release and mails it to the individual. Once again, the owner takes the release to the DMV for processing and usually pays a fee.
If you qualify as a “family” buyer, you may be able to avoid taxes when transferring your title. "Family" usually includes spouses, partners, parents, children, grandparents, grandchildren and siblings. Family members follow the same two-step process as in a regular private party transaction.
Establishing the legality to inherit a car may call for proof of such relationship whether birth certificates or a will. In some cases, it is best to consult a probate attorney.
The same two-step process follows after signing a Gift Affidavit for a motor vehicle transference. According to the IRS, if the gift is made to a charitable organization, then it is exempt from taxes.
MOVING TO A NEW STATE:
Along with updating your driver’s license and registering to vote, the moving process also requires that you register your vehicle in the new state of residence. Fees will have to be paid, but you may be eligible to request a registration fee refund from your previous state. These are the documents required when titling your car in a new state:
A title under your name
Proof of ID
Proof of insurance coverage
Depending on the state: pass an emissions test or smog check and a vehicle safety inspection
Title transference has to take place within 20 - 30 days (depending on the state) of a vehicle’s purchase. If you wait longer, you may have to pay a penalty.
New residents are required to register their vehicle(s) within 20 - 30 days of establishing residency. This happens when any of the following take place:
Begin working in the state
Register your children for a state school
Establish state residency through rental, lease, or purchase of an apartment or house
Apply for state documents: driver’s license or voter’s registration
Schedule your DMV visits at the most convenient times:
Avoid lunch hours (Noon - 2 pm), Mondays or Fridays, as well as the first and last days of the month and the day before a holiday.
While in the process of transferring the title of your car, it might be an excellent time to study the car insurance options available to you. Call us for a free quote today at 1-800-INFINITY orClick Here for a free quote today!
The materials available in the Knowledge Center are for informational purposes only and not for the purpose of providing legal advice. You should contact legal counsel to obtain advice with respect to any particular issue or problem. Use of this website or any of the links contained within the website do not create representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.