If you recently purchased a vehicle or are in the process of selling, one of the most important steps is transferring the car title. The title is the legal document stating the owner of the vehicle.

Laws and regulations for title transfers vary by state. The process and paperwork are usually simple, but check your state’s department of motor vehicles for specific requirements.

How to transfer a car title as a buyer

As the new vehicle owner, it is important to handle the paperwork as soon as possible. You will not have legal ownership of the vehicle until you get the new title sorted, which means working in conjunction with the seller for the transfer to occur. This usually follows a few set steps.

  1. Confirm the seller is the legal owner: Check the vehicle’s VIN and ownership paperwork to ensure you aren’t buying a stolen vehicle. You should also note the odometer reading at the time you buy the vehicle.
  2. Seller transfers title: The vehicle’s seller must transfer the title to your name by signing the release and transferring ownership to you.
  3. Ensure liens are cleared: If the seller has a loan on the vehicle, that lien must be resolved. A statement from the lender stating that the loan has been paid — or just checking that the title is listed as lien-free with the DMV — should be enough.
  4. Get new title: After the owner signs off on the title and any liens have been cleared, head to the DMV to get the new title issued under your name.
  5. Temporary title issued: In many cases, a DMV will provide a temporary title and mail the final document within a few weeks.

The title transfer process is less complicated if you choose to buy from a dealership. Most dealerships will handle it for you. But if you want to buy from a private seller, it will be on you and the seller to ensure the paperwork is handled correctly.

How to transfer a car title as a seller

If you sell your vehicle, you must transfer the ownership to the buyer. This is an especially important step because you still hold legal ownership until the transfer occurs. Until then, you will be held liable for any legal trouble or fees incurred by the vehicle’s new driver.

As the seller, you must sign the old title so the buyer can get a new title in their name. To simplify the process, go to the DMV with the buyer, then have the paperwork notarized if your state requires it.

If more than one person is listed on the title, you need to check whether the word between the names on the title is “or” or “and” before finalizing the transfer. In the case of an “and,” you will need the other person listed to sign off on the transfer as well.

Trading in your car to a dealership comes with less paperwork, although you will likely make less money through this route. However, a dealership will likely handle the title transfer for you. You will still need to sign off on the title, but it should take less time overall.

How to transfer a car title with a loan

Although the transfer of a vehicle title is fairly straightforward, selling or buying a car with a lien can be a bit more complicated.

If the current owner is still paying off an auto loan, the lender will likely have possession of the title. Check with the lender to ensure the loan is fully paid so the new buyer can receive the title. Then you can request proof of loan pay-off to be sent to your local DMV so that the title transfer can occur.

Documents needed

Although the necessary documents differ by state, when the time comes to transfer at your DMV, you will most likely need the following documentation for the bill of sale:

  • Sale price
  • Odometer reading
  • Date of sale
  • Vehicle insurance
  • Buyer and recipient’s name and address
  • License information

The bottom line

Transferring your vehicle title is the final step in the car buying or selling process, so it’s important that it is done correctly. Make sure all vehicle owners sign the title to transfer ownership to the buyer and all liens are cleared in order to properly finalize the sale.

Because the rules vary by state, check with the local DMV and call ahead to ensure you have all of the necessary documents before heading in for the new title.