The title to a car is the legal document that proves ownership. When you purchase or sell a vehicle the title needs to be transferred to the right party. While this may seem like a very simple process, it can create a nightmare if it is not done correctly.
When you purchase a vehicle from a dealership, the dealership will handle the title transfer. In most cases, the dealership will retain the title until the loan against the car is paid. Once paid, the title will be released to you, and you have full ownership of the vehicle.
If you are privately purchasing or selling a vehicle, you must handle all of the title work yourself. There are eight important things that you should do to make the title transfer a safe and smooth process.
Follow these steps to legally transfer a car title:
- Verify the VIN on the vehicle to the one on the title. It should never be assumed that the title and the vehicle identification number (VIN) are an exact match. You can find the VIN number on your vehicle at the bottom of the windshield on the driver’s side of the vehicle. Other places for the VIN number include the inside edge of the door. However, if any body parts have been changed, the VIN will not match. Check the windshield number for accuracy.
- Only use black or blue ink on the document. For a document to be considered legal, it must be filled out and signed in blue or black ink. Avoid any colored inks and avoid markers. If you make a mistake, cross it out with a line and initial it. Never use white-out or any other types of covering liquids because that will void the title.
- Check the odometer. You will need to list the mileage of the vehicle on the title when you are ready to sell. Make sure, if you are buying the vehicle, that the odometer reading matches what is stated on the document. Differences in the odometer reading can have an impact on the legality of the document.
- Make the sale official. You will want to write out a Bill of Sale for the transaction. The bill should include make, model and year of the vehicle being sold. It should also include the full information of the seller and, if possible, the buyer. Make sure to include the mileage and the words “As-Is” on the Bill of Sale to show that you are not making any guarantees about the car. Put the final sale price on the bill. Have both parties sign the document and make sure both parties have a copy.
- Make sure the title is clear. You will want to contact your motor vehicles department in your state to have the title checked for liens. Even if you have had the vehicle for a long time, a lien could have been placed against the title without you realizing it happened. A quick call can make sure that the title is clean.
- Review everything on this list to make sure that it is all accurate. It may seem like overkill, but a bad title can cause you nightmares and a whole lot of money to correct. It is better to check everything over before signing the document to make sure it is correct.
- Sign the right name. Sounds silly, but make sure that your signature matches that of the person named as the title holder. This means if it uses your full name, including middle name or initial, sign it just like that. If you have been married or divorced during that period, sign it as the name on the title.
- Sign in the right places. The title will require you to sign in one area as a buyer and one area as a seller. Make sure that both parties sign in the right place so that the title can be transferred without issue.