The title of a car is a legal document that shows ownership of a vehicle. It is issued by a state’s Department of Motor Vehicles (DMV). To buy or sell a car, the name on the title must be changed or transferred from the previous owner to the new owner.
When transferring a title in a private sale, the seller releases ownership of the vehicle by signing the title. The buyer then takes the signed title to the DMV and registers the vehicle under their name. Typically, the DMV issues a temporary registration to the buyer and a new title is mailed within a few weeks. The buyer is also charged a processing fee, which is generally a component of the overall vehicle registration costs. Typically, a vehicle’s buyer has 30 days from the date of purchase to complete a vehicle transfer, but this timeframe can vary from state to state.
Titles often have multiple blank lines, and it is important that the seller signs in the correct place when releasing ownership of the vehicle. If the seller signs on the wrong line or attempts a handwritten correction, it may cause delays or complications depending on the rules of that state’s DMV. In some cases, a correction form needs to be submitted, while in other cases a new title may have to be acquired before transacting the sale. If a seller has any confusion as to where to sign, they should contact the DMV.
Once the state issues a new title, ownership has officially changed hands. However, it is important to note that some states may require additional documentation as part of the process, such as a Transfer of Ownership form (which may be found on the backside of the title) or a bill of sale. A bill of sale is a simple document provided by the seller which states how much the buyer paid for the vehicle. Plenty of examples and templates for bills of sale can be found online. Some states also require an odometer disclosure. It’s a good idea to visit your state’s DMV website to find out exactly what paperwork and information are required to transfer the title.
Transferring ownership is straightforward when only one name is on the title, but in many cases, a seller may have an outstanding loan on their vehicle, which means the lienholder or lending institution are listed on the title as having ownership interest. This loan or liability needs to be cleared before the seller can release the title to the new buyer.
In this case, the seller should contact their lender for instructions on how to handle the transaction. The process differs from one lienholder to the next. Ultimately, the buyer needs proof that the loan has been settled before accepting the signed title from the seller. Prior to purchase, the buyer should also verify the status of the title using their DMV’s online title check feature or a third-party vehicle history report.
Often, a vehicle is co-owned by two people. In that case, the title of the vehicle jointly lists both names with either an “and” or an “or” connecting them. An “and” means both individuals have to sign the title to release ownership, while “or” means only one of the two parties are required to sign the title.
Transferring a title is less complicated when you’re buying a new car because the dealership’s finance office processes the paperwork. They work directly with the DMV to have a title issued to the new owner. The buyer generally receives their title in the mail within a few weeks of purchase.
The correct owner’s full name must be shown on the title and registration card. Thus, if you change your legal name during ownership of the vehicle, the title and registration should be updated to reflect that. Using California as an example, to complete a name change either the Title, Application for Replacement, or Transfer of Title form need to be submitted. Also required is the Name Statement section of the Statement of Facts (REG 256). The new title should have the new name of the legal owner along with the lienholder’s name and address.
When donating a vehicle, the owner must sign line 1a on the first page of the title certifying that “The signature(s) below releases interest in the vehicle”. If there’s a second owner, they must sign line 1b. Although a title makes the donation process smoother, cars can be donated without a title. Your DMV or the receiving organization should be able to assist with specific concerns regarding your state’s requirements and vehicle title.
Upon the title owner’s death, the estate may seek to transfer the ownership from the individual to the estate. The title’s new owner section should be updated to display “Estate of” followed by the name of the individual who passed along with their address. In California, form REG 256: Statement of Facts is required. Here, the new owner checks the “Inheritance box” under Section A which exempts the vehicle from a use tax. However, a transfer fee is required.
If the vehicle is being transferred to an heir without probate, then depending on the value of their estate, the heir is required to submit the title. Here, the heir signs the departed owner’s name and countersigns it on line 1. Also required are a completed and signed Affidavit for Transfer without Probate (REG 5), a certified copy of the death certificate, and an odometer disclosure (if the vehicle is under 10 years old).
When transferring a title, make sure you double-check the vehicle identification number (VIN) to ensure the title shows the same VIN you see on the vehicle. The VIN plate is typically visible from outside the vehicle in the lower left corner of the windshield.
If the title transfer process requires the seller to make an odometer reading statement, make sure what’s written on the title matches the car’s odometer reading. It doesn’t need to match exactly, but it should be close. And the car’s odometer reading should never be less than what is shown on the title.
Lastly, as a seller or a buyer, it is always a good idea to use a pen with black or blue ink when transferring a title, which makes it harder to change any information once it is recorded.
Aside from buying or selling a car, there are other actions and transactions that impact a vehicle’s title including donating a vehicle, inheriting a vehicle, and making a legal name change. Since each state has their own policies and procedures, your DMV can advise you on the exact requirements for your circumstance.
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