Simply put, a car title is a legal document that proves who owns a vehicle. When any vehicle is sold, the title must be legally transferred from the seller to the buyer. A person does not legally own a vehicle until the title is transferred to them and they complete the registration process. For this reason, a car title is very important. Here’s how to transfer a car title.
A title is issued by each state’s Department of Motor Vehicles (DMV). The title document includes critical information such as the Vehicle Identification Number (VIN), as well as the mileage on a vehicle at the time of sale and the make and model. In the past, car titles were almost always colored pink. For this reason, title documents were often referred to as “pink slips.” While car titles remain pink in many U.S. states, they are not required to be that color. Many are now just plain white pieces of paper. What’s important, though, is the information contained on the vehicle title documents — not their color.
How the Title Transfer Works
There are two steps involved in transferring a car title. Step one involves the seller of a vehicle (an individual or a dealership) releasing ownership of the vehicle by signing the title. Step two requires the buyer to take the signed document to the state DMV. There, the state issues a new registration and title with their their name and address on it. Once these steps are completed, the ownership of a vehicle has been legally changed.
Some states require additional paperwork to be completed in order for a car title to be completed. This could include providing a bill of sale or a transfer of ownership form. It is the responsibility of a person buying a vehicle to know all the documents required to effectively complete the title transfer. A quick visit to your state’s DMV website should provide you with the information you need.
Private Sales vs. Buying at a Dealership
Fortunately when you buy a car from a dealership, the dealer typically handles all of the paperwork. Yes, even if you buy a used car. You typically will just pick up the vehicle with the title already transferred to you. The official title documents will arrive in the mail from the DMV a few weeks later.
However, things are different if you are buying (or selling) a car privately. You’ll have to handle the title transfer yourself. Luckily, it isn’t really that hard. It just takes a bit of extra effort. Ultimately, the onus is on the buyer of the vehicle to ensure that the title has been legally transferred to them.
Some states require basic information about the car at the point of sale, like the sales price and the odometer reading. Before purchasing a vehicle, check with your state’s DMV to find out all the information you need. You want to make sure the title transfer is done properly and legally.
Ownership Details
The name and information on a car title determines who legally owns a vehicle. Transferring a title can be more complicated if there are multiple names (aka owners) listed on the title document. If only one person is listed on a sold car’s title, then ownership can easily be transferred to a new owner. However, if there are other individuals listed (or if a bank or other lender’s name is on the title), this means that there is an outstanding loan on the vehicle. That may need to be resolved before the vehicle can be sold.
This can complicate matters. It makes it more difficult to sell a vehicle and transfer the title to its new owner. Essentially, the loan needs to be paid or removed from the vehicle before it can be sold. Most lenders will provide advice and information on how a loan can be settled. It’s common that the loan can’t be paid off until the car is sold. But the car can’t be sold until the loan is paid off. Contact your lender to find out exactly how they handle the process.
Joint Ownership
In some cases, a vehicle can be owned jointly by two people — such as a husband and wife. In this case, there are two ways the vehicle title can be written. The two names might have an “and” or an “or” between them. Generally, seeing “and” means both parties must sign the title to release ownership. In cases where the word “or” is used, either person can sign the title and transfer it to a new owner. Two signatures are not required where the word “or” is used between two names who share joint ownership.
Contact the DMV
To avoid delays, it’s advisable to contact your state’s DMV before you sell or buy a car. Make sure you know what documentation is required, where to sign title documents, and how to handle a situation where there are multiple owners or a loan involved. If a mistake is made, like signing in the wrong line, it can result in nullifying the legal document. That will just delay the sales process and frustrate everyone involved. In worse case scenarios, you will have to apply for a new title document from the DMV before a sale and transfer can be finalized.
Final Steps of a Title Transfer
After the title is correctly and officially signed by the seller of a vehicle, the buyer must register the car in the new owner’s name. In some states, the application for a new title and registration is on the back of the old title document. In other cases, you might need to obtain a transfer of ownership form that your DMV.
A temporary registration is usually issued as soon as the title document (with the proper information and correct signatures) has been presented to the DMV. An official title document, in the new owner’s name and with all the correct information, is sent in the mail. It typically arrives a few weeks after a sale is concluded. All the relevant information about how to transfer a car title can also be found on a state’s Department of Motor Vehicles website.
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