Do You Need to Transfer the Title When Selling a Car?

The Certificate of Title, as it is called in most states, is the document that shows legal proof of ownership of a motor vehicle. The title is also used to register any liens against a vehicle. The finance company generally will not provide a copy of the title to the owner of a vehicle until any loans against it have been paid off. The title must be transferred to the new owner when you sell a vehicle.

When to Transfer a Title

The title to a vehicle must be transferred whenever the ownership of the vehicle is affected. The most obvious time is when you sell the vehicle. Depending on the state where you are located you may need to re-title the vehicle when a loan is paid off and a lien satisfied. If you inherit a vehicle from an estate you will need to make sure that ownership is correctly transferred, as well as if you receive a vehicle as a gift. In case of divorce or death of a co-owner a vehicle will need to be re-titled to remove the non-owner's name from ownership of the vehicle.

Information Needed for Title Transfer

The information you need to transfer a vehicle title varies depending on where you live. Commonly you will need a bill of sale showing the amount of the sale price of the car. You must also have a copy of the previous owner's title with the section that transfers ownership signed and with you named as the new owner. You will need the odometer mileage as well. Your state may have a form to certify the odometer reading that you and the seller have to sign. The vehicle identification number (VIN) is needed on each of these documents. Make sure that the VIN matches on each form as well as on the VIN plate that is physically located on the car.

Types of Titles

You will have to say what kind of vehicle title you are applying for when you complete the title application to transfer title. On a conventional vehicle transfer you will apply for a normal or clear title. If the vehicle has been totaled in an accident you may need a salvage title to sell the vehicle for parts. A repaired title is for a formerly totaled vehicle that has had parts replaced so that it is operable again. Specialty titles may also be available for antique or collectible autos.

Lien Release

When you make your last payment on your vehicle the procedure to receive clear title may vary by the state where you live. Some states have the bank send you a separate lien release form with the title. Both of these documents together then serve as your vehicle's title and proof of ownership. Other states may have the lender send the lien release form in to the state's department of motor vehicles along with the title, and they will issue a new title that does not have the lien listed. The new title is sent to the vehicle owner and serves as proof of ownership.