The Most Important Thing You Need to Do When Selling a Car

"SteveLehto" (stevelehto) 10/06/2014 at 13:00 • Filed to: None

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If you sell your car privately it is vitally important that you make sure the change in ownership is properly documented with the state. Otherwise, it could haunt you.

I often !!!error: Indecipherable SUB-paragraph formatting!!! and I have been discussing automobile sales with people now for 23 years. While many people focus on the car they are buying , the car they are selling needs some attention as well. Especially if you are selling it to an individual.

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In most instances, a person can sell something to someone else by agreement. You and I agree that my widget will cost you $100. You pay me $100 and I hand you the widget. Deal done. Of course, an attorney might tell you that if you want to be extra careful you could document the transaction by creating a Bill of Sale or some sort of receipt but in most instances the "handshake" deal would be sufficient.

An automobile has one further level of intricacy: The Certificate of Title. Most states track ownership of vehicles through the titling process. At any moment in time, someone can verify ownership of a vehicle by asking the state to confirm the last titled owner for a given Vehicle Identification Number. For example, if the State Police fished a car out of the local reservoir and were curious about its owner.

Now, you want to sell your vehicle. You run an ad and find a buyer. The buyer comes over, looks at the car, kicks the tires and agrees to buy it. He hands you cash and you sign the title over to him. He drives off with the car and you have a pile of cash. Are you good with that transaction?

Not necessarily. At this moment in time, the state still shows you as the titled owner of that vehicle. Suppose the buyer leaves your place, buys some crack and then smokes it while speeding through the nearby playground, running over children in a fashion that will make national headlines. True, they will arrest the driver but someone will also likely run a check to see whose car it is. Why? Among other things, many states have !!!error: Indecipherable SUB-paragraph formatting!!! . That is, the owner of a vehicle is liable for things which are done with it. You might argue that this car is not yours anymore since you sold it a few minutes earlier. After all, you have some cash to prove it. Wait - Cash proves what now? There's that title you gave to the buyer – that's still around somewhere, right?

Over the years I have heard many variations of what can go wrong with these deals. The guy who sold a car and several years later found out that the car had been abandoned after being ticketed repeatedly for being left on the street with no license plates. The state said all of the tickets and the impound fees were his responsibility because no one ever bothered to retitle or reregister the car. Or the sellers who have been sued shortly after the sale because the new owners hadn't gotten a new title, plates or insurance before getting in their first accident with the car. That Owner Liability thing I mentioned above caused sellers to get dragged into messy lawsuits.

What could have been done to avoid this? Once you strike a deal, tell the buyer to meet you at the local DMV, Secretary of State's, or whatever your state calls the place that does car titles, license plates, and so on. This will allow the two of you to stand at the counter and apply for the new title together. AND, this way the buyer can also get license plates and drive the car off legally. Haven't you always wondered about those people who buy used cars privately and then drive home in them? I mean, everyone does it. It must be legal, right?

Yes, this will be a slight inconvenience because it most likely means you cannot close the deal on a Sunday and the nearest office might be a few miles away. But at least you won't be getting that 4 a.m. phone call telling you that the State Police just fished your car out of the reservoir and they have a few questions: 1) Whose body is that in the trunk? 2) Is the 19 pounds of crystal meth in the trunk yours? 3) Will you be paying the $5,000 car retrieval costs by cash or credit? And 4) When can you meet with the EPA to discuss the remediation costs for the motor oil and gasoline with which your car just contaminated the county's water supply?

Follow me on Twitter: !!!error: Indecipherable SUB-paragraph formatting!!!

Steve Lehto is a writer and attorney and has been practicing consumer protection and !!!error: Indecipherable SUB-paragraph formatting!!! for 23 years. He taught Consumer Protection at the University of Detroit Mercy School of Law for ten years and wrote !!!error: Indecipherable SUB-paragraph formatting!!! . He also wrote !!!error: Indecipherable SUB-paragraph formatting!!! and !!!error: Indecipherable SUB-paragraph formatting!!! . He urges you to consult with a local attorney to see how the article above comports with the law in your state.

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Sir_Stig: and toxic masculinity ruins the party again. > SteveLehto 10/06/2014 at 13:05

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Here in Alberta, the deed for the car has a little bill of sale transfer thingy, although I think I will do a bill of sale just to be sure.

MasterMario - Keeper of the V8s > SteveLehto 10/06/2014 at 13:06

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so does having a bill of sale fall somewhere in between pile of money and going to the dmv? How much does a bill of sale protect you?

SteveLehto > Sir_Stig: and toxic masculinity ruins the party again. 10/06/2014 at 13:06

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Our titles usually have a place with a bunch of blanks for things like the date, the sale price, name of the buyer etc. Most of those elements are the same as would be in a bill of sale. The problem is that sellers often hand this over to the buyer without filling them in, hoping that the buyer will then go and finish the paperwork.

SteveLehto > MasterMario - Keeper of the V8s 10/06/2014 at 13:08

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It might give you some protection but the state would still have no knowledge of it. The key here is to prevent the problem, not find the easiest way to clean it up afterwards.

twochevrons > SteveLehto 10/06/2014 at 13:23

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The whole vehicle-titling process really seems fundamentally flawed to me, for this exact reason.

In New Zealand, there is no title, in the sense of a piece of paper – ownership information is tracked by the NZTA (our equivalent of the DMV), and transfers of ownership are performed by both the buyer and seller submitting forms notifying the NZTA of their part in the transfer. The buyer then gets a receipt that includes both parts of the notification form for the next buyer, but it doesn't have the legal weight that the title does – all it does is state the information that the NZTA holds on the vehicle's ownership.

That way, it seems, that even if the buyer doesn't file their part of the form, there is at least something from the seller saying that the vehicle is no longer theirs (with the details of the person that they sold it to). Certainly, with vehicle registration handled at the state level in the US, rather than nationally, having paper titles makes a lot of sense, but I do find the NZ system far easier to deal with.

Having moved to Minnesota, I got caught out by this when I bought my Volvo. I was filling out the title, and was going to put my wife's name on it as a joint owner, but then realised that she wasn't going to be home to sign it until after the DPS office had closed for the weekend, so I made the fatal mistake of crossing her name out. I assumed that the title document only stated what was on record, rather than being THE record, so if I needed to fill it out again, there'd surely be a version of the form that wasn't part of the title.

Not so. We got it sorted out in the end (thankfully, the seller was an attorney, and knew what to do!), but it was a huge mess, and not something that I plan on repeating ever again.

SteveLehto > twochevrons 10/06/2014 at 13:27

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Believe it or not, in MICH the titling process has gotten easier in the last couple of decades. There was a time when the signatures had to be notarized - which meant that the deals were more likely to take place at the Secretary of State's office (DMV) - but they were also really picky about signatures and cross-outs etc. They even got to the point where you had to "sign" your name as it was spelled on the title regardless of what your legal signature looked like. So, if you have a middle name but don't normally sign with it, they'd send the title back as incomplete and make you do it all over again.

Bureaucracy.

Sir_Stig: and toxic masculinity ruins the party again. > SteveLehto 10/06/2014 at 13:28

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That sounds incredibly stupid...

treesmakewater > SteveLehto 10/06/2014 at 13:28

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our state has that, and a little stub that u tear off and fill in (as the seller) and turn into the DMV myself

SteveLehto > Sir_Stig: and toxic masculinity ruins the party again. 10/06/2014 at 13:31

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And that surprises you?

SteveLehto > treesmakewater 10/06/2014 at 13:32

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I assume they do that because they are sick of the buyers filling in the sales amount low (and not paying the full taxes)? What state are you in?

twochevrons > SteveLehto 10/06/2014 at 13:38

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Wow. In MN, getting the correction sorted out wasn't too bad, really – we both just had to sign a form describing the corrections and saying that they were legit. Still, it was a bit tricky to get it all sorted out, especially with no prior experience of how the system works. I was reading horror stories of other states that would have required that we get it all notarised, or have the seller get a replacement title and start the process all over again.

I have to admit, that New Zealand really seems to get things right with car registration and the like. You can file everything online or at any post office, rather than having to find an NZTA office, and there's remarkably little bureaucracy. Twice-a-year safety and emissions inspections, as well as high registration fees, are a bit of a drag, but even then, they do have pluses – cars tend to be fairly well-maintaned in order to pass inspection, and since bodily-injury insurance coverage is part of the registration fee, vehicle insurance is very cheap.

jariten1781 > SteveLehto 10/06/2014 at 13:41

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In addition to what you said, in VA you can go online (or call, or go to the DMV) and state that you've retitled it. You need to do this first before canceling your insurance on the vehicle otherwise the insurance company will notify the state that the vehicle is no longer insured. That can lead to your license being suspended and the cancellation of your registrations on your other vehicles. Not a good time.

If you're buying you can get temp plates that you just print off from your computer for 5 bucks. There is literally no reason to drive on the seller's plates here...it's really easy to get the tag, yet every time I've sold a car the buyers act like it's onerous. Plus, you're required to either transfer, return, or dispose of your plates.

SteveLehto > jariten1781 10/06/2014 at 13:43

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I've also seen buyers show up with their own plates. Presumably for a different vehicle.

There are all kinds of things states COULD do to make this easier. Slowly but surely . . .

505Turbeaux > SteveLehto 10/06/2014 at 13:47

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I gave away a Subaru Loyale 4wd Turbo wagon I used to put my boat in the ocean with to some Subaru fans. Car ran and drove, but the reason I was giving it away was the rear end was LITERALLY falling off the car (thanks Rusty Jones, you ginger asshole). I was leaving on vacation, and made the guys SWEAR to me they would have it towed away while I was gone. I get back with a number of messages from the state police that my car was overturned on 95 with the rear end held on by the driveshaft. Luckily they believed my story. I wonder what ever happened to those guys anyhow. Wish I still had pictures, but this was from the days of voicemails. Could have been a bad time though!

SteveLehto > 505Turbeaux 10/06/2014 at 13:49

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Wow. Great (but scary!) story.

crabdip > SteveLehto 10/06/2014 at 13:53

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Definitely go the Bill of Sale route. I just drafted up something simple stating the the car is sold as-is and the sale is final, amateur lawyer this, amateur lawyer that. We both signed the document and I made a copy and he was on his way. For this particular sale I let the guy take my car with my plates back to his home which was out of state. I do not recommend this but I feel like I'm a decent judge of character and I knew he would mail my plates back which he did a week later after it was titled.

SteveLehto > crabdip 10/06/2014 at 13:56

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A bill of sale is nice and could help if disputes arise between you and the buyer. As you can imagine, all kinds of craziness COULD HAVE happened in your case (what if he got drunk driving home and killed someone with that car?) Of course, it didn't happen and in some respects, all's well that ends well.

Thanks for the note.

treesmakewater > SteveLehto 10/06/2014 at 13:59

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south carolina, it was convieneint when I sold my truck, as the buyer lived in Georgia. I'm not sure why they so it, but I like it.

Sir_Stig: and toxic masculinity ruins the party again. > SteveLehto 10/06/2014 at 13:59

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Sadly, no.

KusabiSensei - Captain of the Toronto Maple Leafs > SteveLehto 10/06/2014 at 14:14

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The worst part is if you do not take the plates off the car and the plates are tied to the owner rather than the car. Yes, that's a bit weird, but it gives me the creeps.

The one time I sold a car privately, I had the buyer ask me "But what if I get stopped on the way home?" I answered him that you have the bill of sale, and state law gives you 7 days to make application for insurance and plates (because the electronic database in GA has to be updated to show that VIN has state mandated coverage before they can process the plate application). So just show the bill of sale, point out that the tag office isn't open until Monday, and you are going there then to get the tag.

"Why can't you just leave the tag on?"

Because a) I'm going to transfer the old tag to another car, and b) It's no longer my car, and if I have retained the plates, then that's another piece of evidence that I no longer am the legal owner of the car (at least in GA).

As a quick aside, I do not enjoy dealing with the county tag office, because I called them up and asked if I can apply for a new title, and they looked up the VIN and told me there isn't insurance on the car.

"Correct, it's a car which is not going to be driven on public roads, so it doesn't need insurance or a plate."

"We have to have an insurance policy according to the computer."

"For a tag application, yes. I don't need a tag, I just need the title."

"We have to have an insurance policy according to the computer."

*sigh*. I'm about ready to trailer it over to the tag office, in order to show them that it doesn't work, so hence no tag is required.

#GovernmentIdiocy

Squid > SteveLehto 10/06/2014 at 14:21

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And this is where California wins. . . When you sell a car, the title has a little perforated sheet you fill out and turn into the DMV after the sale is complete. They have also made it super easy that you can just fill out that form online after the sale to release you from liability of ownership immediately after the transaction is complete. The seller never has to step foot in the DMV to release themselves of liability once the transaction is complete. It is one of the few things that the state of California has correct with its silly car laws.

SteveLehto > Squid 10/06/2014 at 14:22

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Very cool. I'll have to look that up.

Thanks for the note.

Squid > SteveLehto 10/06/2014 at 14:28

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Also, the plates stay with the car, so as long as the registration is current and you have valid insurance, it is completely legal to drive home in said used car. That goes with personalized plates as well, if the owner didn't take care of the necessary steps to transfer the personalized plates to their next vehicle. It doesn't matter how much meaning the plate has to the former owner, it stays with the car until the next registration is due.

I have enjoyed your stories, and enjoy the level of feed back you give when people leave comments. It is quite nice. Keep it up!

SteveLehto > Squid 10/06/2014 at 14:30

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I always thought that "Plates follow the car" thing was odd but I know that CA has done that for years. I do always enjoy seeing the really old plates that are still on the road. I bought a car in CA when I was in Law School but it was my first purchase there so I got a brand new 7 digit plate.

Thanks for the note. I enjoy the discussions afterward quite a bit.

FauxhemianRhapshody > SteveLehto 10/06/2014 at 14:31

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When I was 20, I bought a Fiat 124 spider from a guy. We test drove it, the thing ran great. Ok. So I stop by with the plates from my mom's car (she's out of town) put them on the Fiat and pull out of the drive. I made it about 1/4 mile down the road when the thing overheats and dies (Fiat). Within minutes, there's a state trooper parked behind me. I explain the situation to him right away, and tells me that if he runs the plates, I'd be going to jail. But then he goes easy on me tells me that he'll let it go as long as I have the car towed. Of course, I could only afford to have it towed back to the previous owner's house, not to my place, which was 45 minutes away, but whatever. The trooper was really nice about, considering.

Needless to say, I've never swapped plates again.

SteveLehto > FauxhemianRhapshody 10/06/2014 at 14:34

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What a great story.

Thanks for the note.

Fauxcused > SteveLehto 10/06/2014 at 14:45

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My ex wife was very insistant that we sign the titles of each others cars over such that we each had individual ownership; she owning her car and me owning mine.

I agreed, it made sense. She pushed it because she was afraid that she was going to get sued if I had an accident.

Then a year later she was in an accident and was sued. They tried to come after me.

"I'm sorry, but I no longer own that vehicle and I'm not liable."

RazoE > SteveLehto 10/06/2014 at 14:45

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I fill out the "release of liability" form online as soon as I walk back in the house. Does that...well..release me from total liability, Steve?

SteveLehto > RazoE 10/06/2014 at 14:47

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What state are you in? I have been hearing variations on this in relation to different states.

DancesWithRotors - Driving Insightfully > SteveLehto 10/06/2014 at 14:52

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I just bought a Volvo out of Alabama, this past weekend. The seller and I both signed the title, as it should be, he had already notified the state that it was out of his possession, and I brought the title and bill of sale up to Kansas so I could get temporary plates, to drive it back for inspection, over this coming weekend.

My rule is that I never drive the car more than a mile or two, before putting on the new plates.

AL gives 15 days to get plates, and TN gives three business days, while KS has no grace period. Hence, I didn't want to risk getting stopped and I'm doing it over two weekends rather than one.

SteveLehto > DancesWithRotors - Driving Insightfully 10/06/2014 at 14:54

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How did he notify the state, do you know? I am just curious. The whole Buying in a Different State could be a can of worms too. Sound like you have it worked out.

Thanks for the note.

RazoE > SteveLehto 10/06/2014 at 15:05

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California.

shocontinental > SteveLehto 10/06/2014 at 15:07

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In California there is a 'release of liability' form attached to the title that the seller is supposed to fill in with the buyers info and send to the DMV. The plates are tied to the car, not the owner. So it's possible the owner might not transfer the title for up to a year depending on when the registration expires and how cheap/lazy the buyer is. I bought a car from Illinois once, I went to their DMV and got an 'Illinois Non-Resident In Transit' permit, about 4x4" that got stuck to the back window. I didn't get pulled over but a cop did stop and check the car out at a rest stop. It was weird driving across the country without plates.

I've also had friends get letters from towing companies saying a car they sold years ago has been impounded and they can get it back for $xxx. To avoid any legal implications none of them have reacquired their old cars.

SteveLehto > RazoE 10/06/2014 at 15:09

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I've gotten a few comments specifically about CA. Sounds like they have made leaps and bounds in this arena. I'll have to look into that. I guess the real question is how do they confirm that anything done on line is real? Like if I went out and smashed my car into something, what would keep me from logging on and claiming I sold my car to someone else?
I suspect that their primary motivation is sales tax. Does the form ask you how much you sold the vehicle for?

The Gray Adder > SteveLehto 10/06/2014 at 15:09

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The last car I sold privately had no plates. I had already turned them in and taken the car off the insurance. Naturally, the only way the seller was getting the car out of my driveway without drawing unwelcome attention from the Oneida Country Sheriff's Department was to drive out to the DMV with the title, get the paperwork done, and return to my house with the new plates.

It's problematic no matter what you do, but this was a pretty good way of protecting myself, I think.

SteveLehto > shocontinental 10/06/2014 at 15:12

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Yes, this varies wildly from state to state. Any idea how long CA has done that?

I remember when I lived in CA you would see people driving with expired out of state plates all the time. I got the impression that the cops just didn't feel like dealing with it.

RazoE > SteveLehto 10/06/2014 at 15:12

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I don't remember what's on the form, but here's the front page.

https://www.dmv.ca.gov/portal/dmv/det…

SteveLehto > RazoE 10/06/2014 at 15:16

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Cool. Thanks!

klurejr > SteveLehto 10/06/2014 at 15:26

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There is a form on the Title just for this. You fill it out, have the buyer sign it and then YOU mail it to the DMV. That document shows the date of the purchase, heck you can even time stamp it if you want, and YOU do not let the new buyer have it. Once the DMV gets it you are taken off the title in the system, if something happens right after the person leaves the spot of purchase you still have a signed state document showing they took ownership.

Why on earth would you recommend people go clog up the awfully long lines at the DMV? That is horrible advice. The buyer has to do it, but the seller should not have to be part of those shenanigans.

MechE31 > SteveLehto 10/06/2014 at 15:27

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What happens on out of state transactions? I sold a car to someone who flew in 1 way, and drove it back. I handled everything through a dealership because I was worried about something similar happening.

SteveLehto > klurejr 10/06/2014 at 15:31

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It depends on what state you are in. Most states don't do it the way you describe. What state are you in?

SteveLehto > MechE31 10/06/2014 at 15:33

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That is another way of handling it (if you can find a dealer who will handle the paperwork). This is one of the reasons some people trade in their cars rather than selling them privately: that way the dealer takes care of all of this.

Although, I must tell you that I have some horror stories of people trading cars in to used car lots and still having things go wildly wrong afterward.

evil2win > SteveLehto 10/06/2014 at 15:36

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Here in California you can file your release of liability online. The last few cars I've sold I always filed that online right after the sale. I was sued once by someone who's car was hit by a car I'd sold, and the new owner hadn't bothered to change the title, but I had filed the release of Liability so the judge threw out the lawsuit. t was a stress-filled hassle though.

klurejr > SteveLehto 10/06/2014 at 15:37

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California.

Seems really odd to me that other states do not protect vehicle sellers in this fashion.

SteveLehto > evil2win 10/06/2014 at 15:38

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How long have they allowed that? I was curious about how that would work if someone got in an accident in the interim period between the change of ownership.

And that's the problem: Even if you win, it's a pain in the butt to get sued.

Thanks for the note.

SteveLehto > klurejr 10/06/2014 at 15:41

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I have heard from a few people so far about CA. Most states don't do that. I don't know if it is laziness or just typical bureaucracy. One commenter just told me that even though he lives in CA and did this correctly he still got sued. He got the suit thrown out of court but the lawsuit was a waste of his time (and probably cost him money as well).

I'd still be inclined to go do it at the DMV but I can see why CA's system would be tempting.

charolastra > SteveLehto 10/06/2014 at 15:45

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i am not sure how the system works for other states, so hopefully this rule isn't state-specific. is there a reason why there's a 10-day limit on when you register a car you bought off a private party, and do you get penalized if it's been over 10 days from the date of signature from the now-previous owner?

klurejr > SteveLehto 10/06/2014 at 15:47

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I have sold a few vehicles private party over the years and never had an issue. A friend of mine was in the Car flipping business for a few years and he probably flipped about 30 cars in that time with no issues either. I am glad it worked out for that other commentator, I can imagine the lawsuit was a pain.

SteveLehto > charolastra 10/06/2014 at 15:48

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Yes, this stuff is crazy-different from state to state. Most states require you to notify them fairly soon after a sale - they want to know who the new owner is and what the purchase price was. The first part is for liability (Who is responsible for the car?) and the second is the almighty dollar (Sales tax - Ka-CHING!) I am not sure what the penalties are for each of the various states but I bet you can find out at your state DMV's website.

Thanks for the note.

charolastra > SteveLehto 10/06/2014 at 15:49

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thanks for your help!

MechE31 > SteveLehto 10/06/2014 at 15:50

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If I were to have handled it myself, how would I have gone about it?

PS: As much as I love manuals, the lack of buyers for specialty ordered manuals on the resale market which resulted in a buyer flying from out of state after having the car sit for a very long time has made me second guess doing this again.

shocontinental > SteveLehto 10/06/2014 at 15:50

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The release of liability, at least for the last 10 years.

For the most part out of state plates are ignored by cops on the street. The state itself will go after people that are living in CA but driving cars with out of state plates (legally registered) because they see it as tax evasion. http://www.nbcbayarea.com/news/local/CHP…

MontegoMan562 is a Capri RS Owner > SteveLehto 10/06/2014 at 15:51

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I remember when I bought the Montego I was freaked out about driving it home plate-less. I called the Secretary of State (I'm in Michigan remember) and told them I was buying a classic car privately, they said to get insurance and just drive it home, once I got the title I could come in to handle the plate. They said a bill of sale would be a good idea (which we did). I drove it home with no problems.

It's also possible the cops didn't see me spinning the tires all the way home in it, but either way, no trouble.

SteveLehto > klurejr 10/06/2014 at 15:52

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There are also the issues which arise when someone buys and sells "too many" cars. Most states have every specific rules on how many you can sell before you need a broker or dealer's license and how hard it is to get such a thing also depends on the state.

I know that a lot of these dire warnings from lawyers seem like overkill but that would change the moment one of these deals went badly. For whatever consolation it is worth: Note that I do not make any money from anyone following or not following this advice. It's just something I observed a few too many times.

SteveLehto > MechE31 10/06/2014 at 15:53

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Depends on the state. If you were in MICH you could have done it as I described (you both go to the secretary of state's office).

klurejr > SteveLehto 10/06/2014 at 15:54

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I really like all the articles you write, has shown me just how different other states can be when it comes to many Laws concerning automobiles. I should of assumed this was a Michigan only type deal.

SteveLehto > shocontinental 10/06/2014 at 15:54

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When I was in Law School, I may have driven on out of state plates for a little while. I seem to recall that it was easier - I mean, it may have been easier - than getting the smog tests etc. But I would never recommend or condone any such thing.

SteveLehto > MontegoMan562 is a Capri RS Owner 10/06/2014 at 15:56

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They told you that?! Can you imagine if a cop pulled you over and you tried to tell them that? (Technically, you could have gotten a temporary plate or you could have bought it and registered it and then taken delivery).

Thanks for the note.

SteveLehto > klurejr 10/06/2014 at 15:57

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Thanks, but it's not really a Michigan Only thing. It's more of a Everywhere But California thing. I am still blown away by how different the laws are from state to state - primarily because there is zero logic to it. Why don't the other states adopt the best ideas they see from states who get it right? Who knows . . . .

evil2win > SteveLehto 10/06/2014 at 16:02

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The time I got sued was before in the internet, I think back 1985. That time I'd mailed in the release of liability, and that lag time caused the trouble. Getting sued is no fun, you have spend time in court. there's the stress. This was small claims court so I represented myself. I had a friend in law school at UC Berkeley and he found and printed a copy of the statute that said a person had to either transfer the title or file the release of liability. I gave that to the judge with proof I'd filed the release of liability from the DMV, but it was huge hassle and took up a lot of time. You're advice of transferring the title at the time of purchase is definitely safer. I'm not sure how long they have allowed for filing the release of liability online but I've done it for all the cars I've sold in the last ten years or so. that way I file the one the buyer filled out as a record, and always get the release filed with the state minutes after the sale.

cmusic > SteveLehto 10/06/2014 at 16:05

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And make sure a dealership you trade your vehicle in at transfers the title in an appropriate time frame. Once my dad traded his Toyota truck in on a new Chevy truck in early November of 1994. The next January (the month my dad was born in and my state requires you to renew vehicle registrations and pay taxes for the vehicles one owns in the month you are born in) my dad got the registrations and tax bills for both vehicles. He called the DMV and he found out his old truck was still registered to him. He called the dealership and they said they had sold his old Toyota truck but was behind on transferring the title. He threatened call a lawyer and the Toyota title was transferred out of his name in a couple of days. Who knows if the Toyota title was transferred to the new owner or not.

shocontinental > SteveLehto 10/06/2014 at 16:05

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My dad lives in New Mexico and he leaves a car out here for when he visits. It's insured and registered in NM. I drive it occasionally to car shows. So far no problems, it lives under a car cover behind a gate so the neighbors haven't reported anything. If they did though, it doesn't seem like it would matter. He also has a car in NM that's registered in CA still. He's lived there for ~10 years now and just recently switched his DL over to NM.

SteveLehto > evil2win 10/06/2014 at 16:15

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Cool. According to the website there is still some lag time in the middle. I bet problems still arise.

Thanks for the note.

SteveLehto > cmusic 10/06/2014 at 16:16

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I've also heard of vehicles with liens where the dealer promised to pay it off but didn't.

These kinds of things have all sorts of variations.

SteveLehto > shocontinental 10/06/2014 at 16:17

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Yeah, it's one of those laws on the books that many people ignore.

I think you'd have to do something egregious to even get caught.

FlimFlamMan > SteveLehto 10/06/2014 at 16:20

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Great heads up article!

I made this mistake... once. I sold my old beat up Celica GT to a jackass that I used to work with. I had a proper bill of sale with his sig, but was an idiot and didn't go to the DMV for the title (I was smart enough to take the plate though). I received notice from the state of Missouri (I was on the KS side) that the car was found abandoned and impounded. I just blew it off and nothing ever came of it... luckily. This was back in the early 90's.

MontegoMan562 is a Capri RS Owner > SteveLehto 10/06/2014 at 16:21

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They sure did. Then again, this is the group that randomly inserted the number 4 into my address when I moved once.

Yea in the middle of a word they typed a 4.

For example if I lived on "Main" street it would have read Ma4in St.

Yea, those guys...

Oh, and it was the supervisor that typed it.

Chimaphila > KusabiSensei - Captain of the Toronto Maple Leafs 10/06/2014 at 16:21

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Does GA not have some version of a planned non-operation registration? California has this, for non-running project cars, parts cars, and (unofficially) racecars that never touch public roads.

SteveLehto > FlimFlamMan 10/06/2014 at 16:24

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Yup, and that's what can happen. Thanks for the note. Did you ever talk to that co-worker again?

KusabiSensei - Captain of the Toronto Maple Leafs > Chimaphila 10/06/2014 at 16:24

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Non-operation registration means "You don't buy a tag", and just get the title.

Besides, all the state of GA cares about is their title tax...

SteveLehto > MontegoMan562 is a Capri RS Owner 10/06/2014 at 16:24

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I just love how our government works. Don't you?

Chimaphila > SteveLehto 10/06/2014 at 16:31

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A good first step is to check your state's DMV website for a car-selling checklist. There may be different requirements in each state. For example, in California, the seller must provide a recent (within 90 days) smog check certificate to the buyer, and submit a release of liability to the DMV, but the plates stay with the car. In other states, you may need to remove the plates and mail them to the DMV, or keep them to transfer to a different vehicle.

SteveLehto > Chimaphila 10/06/2014 at 16:33

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That is all good too. I was merely pointing out the one big bad thing I've seen which comes back to bite people. But many states have been doing a good job of putting useful information on the internet these days (hey, it's good for something!)

timgray > SteveLehto 10/06/2014 at 16:44

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Steve, what about a quickly written up bill of sale that also states, " I agree that I accept all personal liability of the car" and make them sign there.

Does that help or is the legal system so broken that it doesnt matter?

SteveLehto > timgray 10/06/2014 at 16:49

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It's not that the legal system is broken, it's just that if the process is followed - it works. And this is not following the process. A document like that might help but it won't replace the act of going in and making sure that the title transfer is properly documented.

You know that whole "Ignorance of the law is no excuse"? It's kind of down those lines: If the law has a way of doing something and you choose to do it a different way, the courts may not have a lot of sympathy for you.

timgray > SteveLehto 10/06/2014 at 16:51

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What about cars sold without a title? Actually that would be an AWESOME article for you as I know a lot of guys have no clue what to do when they find a car they really want but the seller has no title or lost the title.

SteveLehto > timgray 10/06/2014 at 16:59

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That is such a potential can of worms. I know that people do Bill of Sale transactions all the time and there are so many POSSIBLE problems with them. I'm not even sure I could condense them into a coherent article. For one thing, you have a stickier mess with owner liability. You claim you sold the vehicle to some guy and he crashed it? Who has the paperwork? That is one of the advantages of having the state do this - they (theoretically) keep track of this stuff for all parties involved.

Another question - and I'm sure it has come up - you buy a car "Bill of Sale" and another guy comes along tomorrow and says, "I have the title. Gimme."

I suspect this stuff gets really scary when you start considering how each state handles the above (and any other related questions).

KSEGGFTW > SteveLehto 10/06/2014 at 17:06

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Hull-Material - USS Iowa

Jim is one of KFCs secret ingredients > SteveLehto 10/06/2014 at 17:31

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Steve,

What about filling out a separate bill of sale, in duplicate copy, having both parties sign it, giving one to the buyer and retaining one for yourself? This is what I've always done so I have some proof, and I typically will put a notice on there that there is no warranty expressed or implied and the vehicle is sold in "as-is, where-is" condition. Would this help in these situations?

SteveLehto > Jim is one of KFCs secret ingredients 10/06/2014 at 17:34

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Hard to say. I'd check with an attorney in your state (unless you are in MICH which is where I am licensed) but if the law says you need to do X, Y & Z to transfer title properly, you ought to do it. The things you mention would be helpful to do IN ADDITION to doing what the state asks.

Just think of the situation: They go out and run the kids over and all you have is that piece of paper in your hand. You MIGHT win that one in court but it would be a lot stronger of a case if the title had been transferred properly.

Thanks for the note.

HammerheadFistpunch > SteveLehto 10/06/2014 at 17:36

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I sold my car privately and took pictures of the signed title and bill of sale and also scanned the docs in. I doubt I would ever have a problem, but I should be fairly well covered in the event that they say I never sold it to him. Hell I took pictures of our handshake because...don't laugh...I was sad to see it go but happy that it had a new life.

472CID > SteveLehto 10/06/2014 at 17:37

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I guy my dad knew got burned by this with a donated vehicle, he gave my dad a truck for free to avoid this problem.

On a related note, should one remove plates and cancel insurance as soon as the sale is complete? I've always taken the plates when I've sold my cars, for fear of something like this.

Jim is one of KFCs secret ingredients > SteveLehto 10/06/2014 at 17:37

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No problem. I know when I lived in CA, there was a portion of the title that the seller tears off and mails in to the DMV; that's how you handle it. I think TX (where I'm at now) has an online system for it... which is a piece of cake.

tonered > SteveLehto 10/06/2014 at 17:38

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Too right! But, not just for a private sell. We traded our car at a Subaru dealer last October. They must not have properly filed the change of ownership that I remember signing. We were billed by the state tolling agency for some bridge tolls in December. I looked it up online and it still showed that the car was ours even though it had already been sold to someone else. It was a three week fight to get the bridge tolls corrected.

SteveLehto > HammerheadFistpunch 10/06/2014 at 17:39

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What state are you in?

All of that would help but I can still see someone, somewhere, suing you if that buyer went out and killed someone on the drive home (or a week later if they had not retitled it yet). Yes, you might win the lawsuit but there is a very good chance you would get dragged into it. Part of what I am getting at here is not just what the law asks you to do - it's what you can do to minimize your exposure to later problems.

But do you really photograph the handshake?! That's gotta be one funny-looking selfie.

SteveLehto > 472CID 10/06/2014 at 17:41

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Depending on the state - if the plates go with the driver then by all means keep them. In CA the plates follow the car as I recall. And once you sell the car, I suspect you have no property interest to be insuring. Check with a local attorney but that's most likely how it shakes out.

SteveLehto > Jim is one of KFCs secret ingredients 10/06/2014 at 17:42

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I know CA has a much better system than most states but it is not fool proof. Not sure about TX. Thanks for the note.

HammerheadFistpunch > SteveLehto 10/06/2014 at 17:42

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Utah, and my wife took the picture. I grow attached to my cars.

SteveLehto > tonered 10/06/2014 at 17:43

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Interesting. Problems like this seem to be less common at dealerships but I guess mistakes can happen anywhere. Thanks for the note.

tonered > SteveLehto 10/06/2014 at 17:43

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WA has it also:

http://www.dol.wa.gov/vehicleregistr…

HammerheadFistpunch > SteveLehto 10/06/2014 at 17:43

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on a related note, my family sold my old car (that was registered to me, but owned by my family) to a relative and I was pretty shocked a few months later when I got a bunch of parking tickets. These were the responsible ones in the family too. Lovely.

RX > SteveLehto 10/06/2014 at 17:45

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Write up a bill of sale, sign the back of the title, do it at a place with a copier.

tonered > SteveLehto 10/06/2014 at 17:46

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You're welcome.

That has been my experience also. The state was not going to get that $6.36, though! ;)

BTW, don't rewatch 'Better Off Dead.' It's not as good as we remember it.

ZiptieMcBumper > SteveLehto 10/06/2014 at 17:49

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I hate to admit this, but I'm often at home during the afternoon and catch Judge Judy on a pretty regular basis.

Pretty much one-third of the cases on that show are about this very thing.

I'm pretty sure the other third are cases about couples that break up and decide they want to call the money they gave each other during their relationship "loans" all of a sudden.

The remainder? Landlord/tenant disputes.

That's it. That is Judge Judy in a nutshell.

SteveLehto > RX 10/06/2014 at 17:50

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And then what happens when the buyer goes out and kills someone with the car before titling it? You will get sued as the last titled owner. You can hire an attorney and he/she will defend you by pulling out your documents etc. The case may or may not get thrown out. Let's assume it does. How much did that cost you?

Or, you could have gone to the DMV (they have a copier).

Take your pick. I'm just making sure everyone is aware of the ramifications. Beyond that, it's up to you.

Thanks for the note.

SteveLehto > ZiptieMcBumper 10/06/2014 at 17:52

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It's been a long time but I did watch Judge Wapner back in the day. I recall that was pretty much it back then, too. And do those litigants ever learn?

Thanks for the note.

QADude > SteveLehto 10/06/2014 at 17:54

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When I traded in my car, I signed a waiver of liability, which meant that the dealer was legally responsible for my old car that very day. End of story. I got new plates for my car as well, since CA doesn't recycle old plates on new cars.

When it comes to expired plates, they would make a ton of money if they actually enforced it. I see expired plates everywhere, even from cars registered out of state.

Generally speaking, I think the cops have more important matters to attend to, but it wouldn't hurt.

snakem > KusabiSensei - Captain of the Toronto Maple Leafs 10/06/2014 at 17:56

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It's amazing how often the people working in the title office don't have a clue of what's going on. I literally had to print out a copy of the Texas transportation code and take it to them after being denied title change on a non-running vehicle that I obviously wasn't about to buy an insurance policy on anytime soon.

RX > SteveLehto 10/06/2014 at 17:56

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Now what if you are selling to someone out of state?

Carthell > SteveLehto 10/06/2014 at 17:57

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In Maryland, there's a ton of private businesses who have a license to file tag and titling issues for the general public outside of the operating hours of the state's DMV. I haven't been involved in a private sale yet, but I had turned in tags for a car of mine when I was subjected to an involuntary safety crash test. It didn't cost me anything, either. The clerk did advise me to keep the receipt handy until the DMV recognized what I did.

I imagine that there are states that would like to keep titling functions "in-house," so I'm more fortunate than other parts of the country.