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Signing Over a Car Title

Details About Signing Over a Car Title

by Austin Peters

Considering the way the automotive markets have been recently, you may be thinking about selling your car. This can be a great idea if you have a second vehicle that you can drive around. Before you actually sell your car, there are a few things you should know about the process. One of the most important steps in selling your car is signing over a car title to the buyer. Here we will detail what you need to know.

What is a car title?

A car title is a legal document that identifies those who have ownership rights to a vehicle. There is actually a lot of information that is on a car title. First, the title will list all of the specifics about your car. The front of the title will have the car’s VIN, the make and model, year, plus the vehicle type. Some vehicle types include car, truck, multipurpose vehicle, etc.

In addition to car specific details, the front of the title also will list the owners. If you own the car outright, it will list your name. If you own the car with another person, the title will list all the parties. An example of this could be your spouse. You car title will also list all lien holders. If you have a loan against your vehicle, and it is secured by the car’s value, the title will list the financial institution that provided you with the funds. This can be a bank, credit union, or a car manufacturer’s financing branch (for instance, Volkswagen Credit or BMW Financial Services).

If you have an outstanding loan on your vehicle, then chances are you do not have the title. This is because the title is held with the person or financial institution that legally owns the car. In many cases, the title will be with the bank or other type of financial institution that lent you the money to buy the car.

While every title will have this information on it, each states’ car titles may differ. Understanding the details and nuances of your state’s vehicle title is important when signing over a car title.

Selling Your Car

If you are looking to sell your car, there are several things you must do. First, make sure you give it a nice cleaning. It is always easier to sell a clean car then a dirty one. In addition to this, you may want to consider getting a PPI for your car. This is when you have a mechanic check it out so you know what possible defects are. You should always be transparent with potential buyers so they know what they are getting.

After you negotiate price and are ready to sell it, you will then have to fill out a bill of sale. This is a legal document that states the seller, the buyer, as well as the car’s details like make/model/year, as well as mileage and sales/purchase price. If the purchaser doesn’t have the cash on hand, they may want to look into ways to borrow money fast to complete the sale.

The last step in selling your car is signing over a car title to the new owner. Now that you know what a car title is, this process should be easier. However, there are some nuances to this depending on if you own the car outright or not.

Transferring a Title if You Own Outright

If you own the car outright, and have the title in hand, signing over a car title to a new buyer is very easy. Once you get the money and sign the bill of sale, all you have to do is fill out the back of the titles.

In most cases, titles have two sides. The front has all the car information and list all the owners, while the back has a section to use to transfer the title to a new owner.

Again, different states have nuances when it comes to their titles. But all will most likely have a section actually used for signing over a car title. You will have to list your name, address, and sign it. You will also have to list the personal information of the buyer and have them sign it as well. Lastly, in most cases, you will also have to get the document notarized.

Once the title has been filed out, the new buyer will take the title. The purchaser will then go to the DMV with the signed title to register the car. The DMV will then usually take this title and issue them a new one with their information on the first page, and a blank second page.

Transferring a Title With a Lien

Signing over a car title with a lien against is definitely doable. While it is not as easy as signing over a car title if you own the vehicle outright, it is still a straightforward process.

The first thing you will need to do is settle any outstanding loans against the car. This may mean writing a check to your bank, or sending funds electronically to another type of financial institution. Once the loan is paid off, the title holder will do one of a couple different things. They may issue you a lien release letter. A lien release letter is a document that states you have paid off the loan. Not all financial institutions send these letters to the owners.

The financial institution could also send you the title directly. If they do this, take the lien release letter to your DMV with the title they send you. The DMV will take these documents and issue you a new title.

Lastly, instead of sending a lien release letter or sending you the title after you pay off the loan, the financial institution may send the title directly to your state’s DMV. Today, this is all done electronically. For instance, in North Carolina, banks and other types of lenders will electronically release your title to the DMV. You will then need to go to the DMV to get a new title.

Once you have the new title, you can fill it out as we described in the previous section.

States and financial institutions handle these situations differently. Before you sell your car, give your lender and DMV a call to make sure you do the right things. Some DMVs have strict time frames where you have to get your new title.

Signing Over a Car Title – Summary

If you are planning on selling your car, you need to know the process behind signing over a car title. Here we detailed two scenarios, one providing information on what to do if you hold the title personally. The other details what you need to do to sign over a car title if there is an outstanding lien on the vehicle.

In both cases, make sure to do your research. As time consuming as it might be, give your DMV a call and ask about the process. It is also smart to call your lender if there is a lien on the car so you know what you have to do on their end as well.

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