Car Loans

How to Transfer a Car Title

By TheCarzingTeam July 19, 2022 | Car Loans

Car Loans

A car’s title is the car’s birth certificate or passport. When a car changes hands through a sale or trade-in, the title always goes with the vehicle. When a car owner sells their vehicle or uses it as a trade-in, they will sign the title and note the date of the sale.

After a sale, the buyer might wonder how to transfer a car title. In addition, some individuals inherit a vehicle from a deceased relative. While the procedures of a title transfer might differ per state, the basics of the transfer include:

  • Signing the back of the title (seller/buyer)
  • Paying off any liens
  • Receiving paperwork for the lien release
  • Paying fees for the title transfer

State Procedures Might Differ

Before selling or buying a vehicle privately, individuals should research the procedures of transferring a title in their state. This also is important when an individual has inherited a vehicle from a relative.

In the case of an inherited vehicle, the state might request a death certificate and other paperwork. Sometimes the situation could be complicated if a vehicle was ‘willed’ to one relative and then that individual is gifting the car or selling the car to another relative.

Researching the procedures in the state related to a particular title transfer can help ensure the new owner of the car isn’t sitting in the DMV for hours only to discover that they are missing a key piece of paperwork.

The Easy and Basic Steps to Transferring a Title

While paperwork and procedures might differ for a title transfer in each state (especially as it relates to an inherited vehicle), there are some basics of a title transfer that are consistent.

Signing the Back of the Title

When an owner sells, donates or trades-in their vehicle, they will need to sign the back of the title as proof of the sale. They also will need to date the title.

However, states also have instructions on the information that needs to be included on the back of the title. In addition to signatures and the date of sale (or trade-in), individuals also might need to note the odometer reading, net price, dealer number (when applicable), plus printed names, too.

Again, before signing over the title, make sure to review the state’s specific instructions. If something is missing, that title can’t be transferred.

Paying off any Liens

A title cannot be transferred to another owner unless the liens are removed from the title. This means that any liens must be paid in full before a car can be sold or the title can be transferred.

Individuals who have a car with a loan need to contact their lender before they sell their car. The lender can explain any necessary procedures to sell their car. Some lenders require that payment takes place at one of their locations or at a partner location.

A phone call with the lender also can help the owner understand the remaining balance on the loan. The car owner might decide to pay off the remainder of the loan (known as the ‘payoff amount’), and this could simplify the selling process.

Keep the Lien Release Paperwork

Some car owners opt to retitle their car when they pay off their loan. This ensures that the owner has a new title without any liens. However, in order to retitle the car or transfer the title, the owner (or seller) must have the lien release paperwork that proves that the loan was paid in full and that the lien holder has no ownership interest in the vehicle.

Once a loan is paid, the lender sends this paperwork to the car owner, and it should be kept somewhere safe. While lost paperwork could be reissued, this can be frustrating and a hassle.

Fees for a Title Transfer

Once all the paperwork is in order and the new owner is ready to have a new title issued, they also will need to pay any fees associated with the title transfer and issuance of a new title.

Fees, again, might vary from state to state. To better understand applicable fees, visit the Department of Revenue or Division of Motor Vehicles for the state.

Buyers who purchased a new car from a dealership and are titling the vehicle, though, might be faced with a hefty sales tax charge before they can title. Not every state charges sales tax on motor vehicles, but those that do might require this payment at the time of titling.

Don’t get sticker shock at the DMV. Before titling, always research the applicable fees and taxes to better understand financial obligations.

When buying a new vehicle at the dealership, inquire if the sales tax for the vehicle can be included in the financing. Dealerships could roll the tax into the loan, but this isn’t always the case. Talk to the dealership to understand the tax situation.

How to Transfer a Car Title

Title in Time to Avoid More Fees

Another reason that buyers and sellers (but especially buyers) need to research the titling procedures in their state is that there might be a deadline for titling the vehicle. Some states stipulate that the car must be titled within 30 days from the date of purchase. Failure to title within this allotted period of time results in penalties.

Buyers need to understand how long they have to title the car after buying it or after it has been ‘willed’ to them. Every state can differ on taxes, fees and procedures, but it’s up to the buyer to understand their responsibilities.

How to Transfer a Car Title

Replacing a Stolen or Lost Title

Before a car owner sells their car or signs it over to a dealership for a trade-in, they need to locate the title. Some car owners might realize that their title is missing.

If a title has been stolen, though, the car owner needs to call the police and file a report. Dirt Legal explains that filing a police report will ensure that the old title cannot be registered; in addition, the police report serves to protect the owner, too.

After filing a police report, the car owner can visit their local Department of Motor Vehicles office to obtain a new title (or retitle their car). Again, procedures might differ per state. However, the new title should void the old (stolen) title.

If the car owner realizes that they accidently shredded, tossed out or simply misplaced the title, they also will need to visit the website for their state’s DMV or Department of Revenue to find out how to retitle the vehicle.

In some cases, the title might be held by the lender who financed a car loan. The car owner could contact the lender to inquire if the title is in the lender’s possession.

Once a car owner has realized that their title is missing, they need to take steps immediately to obtain a new title. Again, the title of the vehicle moves with the car with every sale. A car cannot be sold or traded-in without a title.

Is Transferring a Title Difficult?

Transferring a title to a new owner requires that the current owner and the buyer fill out the back of the title with all the applicable information. The issuance of a new title, though, can be a bit more involved. Procedures and fees vary per state; those who are buying a new vehicle or who have inherited a vehicle should research the process for titling the car. Understanding the fees and the titling procedures can ensure that the new owner has all their paperwork in order when they visit the DMV.

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