This article is a guide for those who are signing over a car title. If you are buying or selling a car, this process applies to you. Read this article to understand how to sign over a car title. This will ensure you follow correct procedures and don’t get into trouble down the road.
Signing over your car title is a necessary part of selling your car. You also need to understand the process if you are the buyer.
Handling the transfer of title correctly is very important. First, it officially shows the property has a new owner. Because of this, you need to understand what a title is and how to complete the title transfer process properly.
Whether you’re a buyer or a seller, you want your next title transfer to go smoothly. The sections following will help you make sure that happens.
What is a vehicle title?
Most motor vehicles have a title, and this is sometimes called a “pink slip.”
However, they are not always pink anymore and come in several colors. The title of a car is the legal document showing the registered owner of that vehicle. A state’s Department of Motor Vehicles (DMV) produces a car’s title.
The title will have several boxes and sections recording vehicle information. This information will include:
- the Vehicle Identification Number (VIN)
- the current odometer reading or the car’s current mileage
- the vehicle model and make
- the owner’s signature
When a car changes ownership, you must change the name on the title to transfer ownership.
Signing the car title over
If you are selling to another person, this is a private sale. In a sale between private parties, the person selling the car releases ownership to the buyer by signing the title. Afterward, the buyer must take it to the DMV. The DMV will then help the buyer register the vehicle. The agency will make sure the new registration information is accurate. For example, it will verify the new owner’s name and mailing address.
Most Departments of Motor Vehicles give the buyer a temporary registration. Then, the permanent title will come in the mail. The mailing time varies, but it’s usually a few weeks. Be aware that the DMV will likely charge a fee for this process. In some states, this will be a one-time title fee. In other states, it will be your first annual or biennial registration fee.
A buyer may be able to negotiate with a seller to deduct the registration costs from the sales price.
A lower sales price could save you money more than once. Typically, a car’s purchase price will be recorded as part of the registration process. For example, in the case of a California title, this price will affect the registration fee you pay each year. This is because a portion of California’s yearly registration is based on your car’s value. Therefore, when you first register, that value equals the price you paid. To see how it works in your state, visit this National Conference of State Legislatures (NCSL) page.
Don’t forget to take the signed title to the DMV after the sale. In many states, you only have 30 days from the date of purchase. However, this does vary from state to state, so check your state’s DMV website for a more specific deadline.
Sign in the right place to avoid delays
This may sound obvious, but it’s essential. Car titles have several boxes and blank lines, so they can be confusing. This is particularly true if the title is older or the paper is in poor condition, making it hard to read. Title transfers are only official if you sign on the right line.
If you make a mistake, it’s not the end of the world. But it could cause delays. A correction can require you to get a duplicate title separate from the original title. This certified copy then requires a whole new signature for releasing ownership.
In some states, you just need a correction form. Each state has its own rules, so check your state DMV’s website if the seller signs on the wrong line. If the seller has any confusion about how to sign over a car title, get in touch with your state’s DMV.
Additional documents may be required
When the state produces the new title, the buyer officially owns the car. The ownership transfer is complete. That said, you may need some additional documents beyond the car title.
One additional document you might need is the Transfer of Ownership form. This form is typically on the other side of the car title.
You might also need a bill of sale. The bill of sale should indicate how much the new owner paid for the car. The seller completes this document and gives it to the seller. Are you selling your car and need help preparing the bill of sale? Most state governments post blank bills of sale that you can use. Here are examples from several states:
You are not technically required to use the form posted by your state. The only requirement is that the form you use have all the information your state requires. Using a form provided by your state guarantees you include all the right information.
Note that some states will provide more than one version of the bill of sale. For example, one Arkansas bill of sale is only for sellers who also buy a car and want a certain tax credit.
If you use a form other than the one provided by your state, you should use one that has a line for the odometer reading. Some states require an odometer disclosure statement to transfer the title.
Handing over your title for an auto title loan
Auto title loans are short-term loans for small amounts that use your vehicle as security. To get the loan, you give the lender the title of the vehicle and pay a lender fee. Typically, you have to repay an auto title loan within 30 days. Car title loans are an expensive and risky form of credit. However, they are often the last resort for people with bad credit who don’t have any other assets to sell or pawn.
Handing over the title of your car to a lender is not the same as legally transferring the title of a car you are selling, but it’s not something you should do lightly. If you don’t repay the loan, the lender can take your vehicle. If the lender repossesses the vehicle, they can sell it. In some states, lenders can keep all the money they get from selling the vehicle, even if they get more than the balance of the loan.
Transferring the title with an outstanding loan
Signing over a car title is relatively simple when the seller owns the car outright. But that’s not always the case. Sometimes the seller has not paid off the car. So, how does transferring the title work then?
The lender must be satisfied before vehicle title transfer
If the seller doesn’t own the car outright, the title will list the bank or lender. The title will likely label this party the “lienholder.” This makes it clear that they have a claim on some of the car’s value. The loan has to be paid to eliminate their ownership interest. Only then can the registered owner transfer possession of the used car.
A seller should get in touch with the lender before selling the car and transferring the title. The lender will be able to help with the next steps. The specific steps will differ for each lender. The seller will need evidence the debt has been settled. (In California, this means the lienholder’s signature.) Releasing ownership to a buyer won’t be possible without it.
Are you in the market for an auto loan? This free loan comparison tool can help you compare rates and terms without hurting your credit score.
If you are buying a car, you can and should check the status of the vehicle’s title. You can check this with your state DMV or with a third-party provider of vehicle history reports.
Check title status with the Department of Motor Vehicles
Your state’s Department of Motor Vehicles should have an online title verification system. You can use it to check the car’s title before the seller has to sign the title. The exact steps you must follow to do this will vary by state. Visit your state’s DMV website to learn more.
Get a vehicle history report
DMV websites are not your only resource. Other websites also offer the ability to check the vehicle history report. This is a good option. It lets you ensure the seller’s contact information and other data match what’s on the title. You don’t want to end up buying a car from someone who doesn’t own it, after all.
The vehicle history report will also indicate if the car has a salvage or total loss history. If it has a salvage or loss history, it’s probably been wrecked and then repaired. This means the car could have security issues and may not be totally safe.
The report may also note prior odometer readings. These allow you to verify that the reading has not been altered. Nearly half a million of the cars sold each year have false odometer readings due to odometer fraud. This is according to a National Highway Traffic Safety Administration (NHTSA) estimate.
Typically, you need the vehicle identification number to look up the report.
How to sign over a car title with multiple owners
In some cases, the used car has multiple owners. If this is the case, then the title will list the owners. Usually, the title will use words like “and” or “or” to show how the owners are linked.
When the title uses the term “and,” all owners have to sign the title. On the other hand, if the car title uses the term “or,” they do not all have to sign. When “or” is used, only one owner needs to sign.
For example, if the title lists owners “John Smith and Jane Smith,” both John and Jane need to sign. You can’t release ownership and complete the title transfer without both. However, if the title lists “John Smith or Jane Smith,” either can sign to complete the title transfer.
This is important to figure out before you have to give the car title to the new owner. It may cause frustration during the sales process if you have to track someone down to sign the title before you can give it to the new owner.
Getting a car title through the dealership
Are you purchasing a new car from a dealership? If so, this is going to be pretty simple. You can expect a streamlined title-transfer process if you’re a new owner of a new car. You don’t have to handle things yourself as you would when buying a car from a private seller. When buying from a dealership, you can expect the dealer to handle this for you. Typically, the dealer goes directly to the DMV and has the title mailed to you. You should get this car title in a couple of weeks.
What if you trade in a vehicle? It’s very similar to a private sale, where the seller signs over the car title to a buyer. In the case of a trade-in vehicle, you sign the title to release ownership to the dealership. The dealer will ask for the original title when you trade in the vehicle. They work with legal documents all the time and will take care of the signed title.
Other considerations for car title transfers
Not all car title transfers are the result of buying or selling a car. Various situations can affect the car title.
Gifting and name change
One such situation is where the car was gifted to the new owner. This is common among family members. A parent might gift a car to a child, or one spouse or partner might gift a car to the other.
Another situation that can affect a title is when the car’s owner has a name change. In this case, the appropriate box on the title needs to be updated to use the new name. Remember, the title is proof of ownership. So double-check spelling and accuracy to avoid any future problems.
Double-check vehicle identification number (VIN) and odometer reading
It’s also important to double-check the vehicle identification number (VIN) and odometer reading. The VIN on the car title should match the numbers on the car. You can usually find the VIN on the left or right hand side of the car near the bottom part of the windshield. If the car’s displayed VIN and title match, you know it’s the same vehicle.
You can find the car’s current mileage on the odometer behind the steering wheel. The odometer reading should never be less than the vehicle’s title indicates. If the car has been used, it will likely be a bit over what the car title says, but it shouldn’t be under it. What if the odometer reading is lower than what’s listed on the title? This could indicate someone has tampered with the vehicle. This is why double-checking the odometer reading is important.
Don’t use a pencil
As a final note, do not use a pencil to sign the title or to complete any legal document. A pen with blue ink or black ink is best. Your signature and the title are proof of ownership. You don’t want someone to be able to easily tamper with your signature. Nor do you want anyone to be able to tamper with your entries on any legal forms.
What can you learn from the title of a vehicle?
You can check to see if a financial institution has a claim on the car by looking at the title. You can also check through your state DMV’s website or get a vehicle history report. Remember, outstanding car debt has to be paid before the car ownership can transfer. Also, make sure the mileage and VIN match the information in the appropriate boxes. If they do not match, that’s a red flag.
What happens if you mess up the title transfer?
Knowing how to sign over a car title is important whether you are a buyer, seller, or inheritor of a car. It officially and legally establishes that the new owner really does own the car. If you sign in the wrong place, this can lead to delays. How bad these delays are will depend on your state. Some will make you get a duplicate title. Others will require a correction form.
- Most motor vehicles have a vehicle title.
- The vehicle title verifies who owns that vehicle.
- When you buy or sell a car, you need to know how to sign over a car title.
- Before buying a used car, verify the title through your state DMV. You can also verify title and other car information by getting a vehicle history report.
- Make sure to sign in the right place to avoid any issues. If you don’t, you may have to get a correction form or a duplicate title. Contact the Department of Motor Vehicles if this happens.
- If the seller still has an outstanding car loan, it has to be paid before the title transfer.
- When a car has more than one owner, they will be listed using “or” or “and” on the title. If the owners are link with “and,” it means they both have to sign to transfer ownership. If they are connected by the word “or,” it means they don’t have to sign.
- Use blue or black ink to sign the car title. This will help prevent someone from tampering with it.
View Article Sources
- Bill of Sale (For a vehicle claimed as a tax credit towards the purchase of a replacement vehicle) — Arkansas Department of Finance and Administration
- Bill of Sale Form T-7 — Georgia Department of Revenue
- Bill of Sale Form REG 135 — California Department of Motor Vehicles (DMV)
- Complete Guide to Auto Loans — SuperMoney
- How to transfer a car title in any state — Junk Car Medics
- Odometer Fraud — National Conference of State Legislatures (NHTSA)
- Understanding an NMVTIS Vehicle History Report — National Motor Vehicle Title Information System (NMVTIS), U.S. Department of Justice (DOJ) Office of Justice Programs
- Research Vehicle History — NMVTIS, U.S. DOJ Office of Justice Programs
- Should I Buy a New or Used Car? — SuperMoney
- Title Transfers and Changes — California DMV
- Used Car Checklist: Check For This When Buying a Used Car? — SuperMoney
- Vehicle Bill of Sale Form 735-501 — Oregon DMV
- Vehicle Bill of Sale Form MV-912 — New York DMV
- Vehicle Registration Fees By State — National Conference of State Legislatures (NCSL)
Will Morriss is a writer for SuperMoney and an expert in financial services with a Master’s in Business Administration. He has experience as a manager in sales and marketing and enjoys sharing his expertise with consumers and small businesses to help them solve problems and grow.