All vehicles that are in operation on roadways today are required to have a valid title. The title establishes the ownership of the vehicle. Some titles are issued directly to the driver at the time of purchase, while others are held by a financing company until the loan on the vehicle is paid in full.
Transferring the title of a vehicle plays a central role in the buying or selling of a car. You need to be familiar with the transfer process so that you can navigate the legalities of vehicle transactions in the future.
1. Obtain a Bill of Sale
Since a car title establishes ownership, you need to be able to provide proof that you are the legal owner of the vehicle before transferring the title into your name. This proof typically comes in the form of a bill of sale.
The bill of sale is a document that outlines the details of the vehicle purchase. It provides proof that the transaction took place, and gives you a legal basis on which to request that a vehicle's title be transferred into your name.
2. Release All Liens
A vehicle may have a lien against the title if the initial purchase of the car or truck was financed through a bank or credit union. These liens must be released before the title can be successfully transferred into someone else's name.
The individual selling the vehicle will need to provide payment in full to the company who has the lien on the title. Once payment is received, the company will release the lien and the title is considered clear. You can request a title transfer without running into any legal problems once all liens have been released.
3. Complete the Necessary Paperwork
Once you have the title in your hand, you will need to complete the assignment of title section with the seller. This section requests the current odometer reading, the purchase price of the vehicle, and the contact information of the seller.
The DMV will utilize the information contained within the assignment of title section to issue a new title in your name. You may need to fill out additional paperwork to complete the transfer process.
Your local DMV will be a valuable resource when it comes to determining which forms are needed to successfully transfer the title of your new vehicle out of the previous owner's name and into your own. For more information about car title transfers, speak to an auto service professional.