Selling a car is often a hassle. After meeting the right buyer and agreeing to the right price, it’s time to get all the paperwork ready to transfer over to the new owner. Important documents include the title, or the paperwork that provides legal proof of ownership. Without the title, selling a vehicle could become tricky and inconvenient. But there are ways to get around that problem. This article outlines tips on how to sell a car without a title.
A vehicle title is a document from the state that includes identifying information specific to each car, such as:
There will also be some information that helps prevent potential scams, including mileage at the time of purchase and license plate number. The purchaser name, address, and date of issue are on there as well.
Documenting the accurate mileage ensures that the vehicle’s odometer—which records the amount of miles it’s been driven—hasn’t been rolled back. If the seller’s name is not on the title, that may mean a third party still owns the vehicle in state records, which could cause all kinds of headaches. That’s why this information is very important to have on the title.
There are four different types of titles:
These designations give potential buyers an understanding of the vehicle’s past. For example, if a car has a Salvage title, that means the vehicle was at one point deemed inoperable due to major damage but was properly repaired and is now in drivable condition.
Car owners should always keep the title to their vehicles in a safe place to prevent loss. But the title may be lost or damaged due to situations outside of their control, such as fire or water damage, or getting misplaced in a move. If a car title is lost and can’t be found, there are ways to obtain a new title.
While it’s legal to sell a car without a title in some states, many states require a car title to complete a sales transaction. If a car owner is unsure about the legal requirements, the safest bet is to have the car title ready before placing a car up for sale.
To get a new title, car owners can start researching the process at their state’s department or bureau of motor vehicles. If the car is paid off and has no liens on it, the process will be much easier.
For example, in California, the California DMV’s website requires the following documentation and information to be submitted along with the application for a new title:
Once a car owner has completed the application and gathered all the required documents, they can set up an appointment at a local DMV office and submit them to personnel to process.
Some states may even allow car owners to submit title replacement applications online, so it is important to research the requirements in each state.
While applying for the new title may be fairly quick and easy, the actual processing done by the state could take a while. Completing the application process before listing the car for sale, if possible, will help prevent delays due to paperwork.
If the vehicle still has an outstanding loan with a bank, the seller needs to transfer that loan to the buyer. After that, the state will issue a document saying which finance company holds a lien on the car.
Once a new title has been issued, the original title is void. So, if the old title is found, do not keep it; it’s best to destroy it to avoid confusion.
The ideal scenario is to hand-off the title with the car. However, if that is not possible, there are other procedures that can be done to ensure a smooth sale.
Requesting a transfer of ownership: This is when the seller and buyer tell the state that a title wasn’t exchanged, but the vehicle still changed hands and that the new owner will apply for a title. In California, this is known as the REG 227 form.
Bill of sale: When the vehicle is so old that the state may not even issue a title (such as vintage/antique automobiles), or the vehicle will be kept off public roads (this includes a race car or recreational off-road truck or SUV), the owner can create a bill of sale. In general, a bill of sale includes buyer and seller contact information as well as all identifying information about the vehicle. Each state should offer examples of how a bill of sale should read and what information it should contain.
An out-of-state scenario: When a car owner wants to sell a car without a title outside of their home state, additional documentation may need to be provided. This could be a copy of the vehicle’s registration, which can be cross-checked between states. A separate notice of sale may be needed as well, to help establish the transfer of ownership.
Selling a car without a title is, for the most part, a legal means of transferring ownership that requires a lot of accompanying proof. This is to combat any form of scamming, theft, and other illegal activity.
Each state establishes its own processes and requirements, so car owners wanting to sell their vehicles without a title need to research their home-state policies and procedures to ensure they have all the required paperwork when they submit it to the state.
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