Did you know that over 91 percent of households have access to at least one motor vehicle? Odds are that you or someone in your family has a vehicle and will someday participate in a title exchange. One of the most important parts of car ownership is knowing how the car title works.
Selling a car is sometimes a relief and other times a bittersweet moment. Most of what goes into getting rid of your car are paperwork like the registration form. Knowing what goes into a legal transfer will help you to make selling your car a breeze.
Continue reading to learn more about what a title exchange is and how it works.
What Is a Car Title?
A car title is a document that proves that you own your vehicle. Once you sell your car, the legal exchange of the title begins. The title exchange helps by transferring ownership from one party to another. You’ll need to know the vehicle identification number as well as the title to successfully complete the transfer.
How Do You Complete a Title Exchange?
A big part of the process of exchanging a title, or pink slip, of a vehicle, is knowing how your state DMV operates. A wise step to take when beginning the process of a title exchange is to check the requirements for your state.
Another factor that plays a big role in the title exchange process is who you’re selling the car to. The process is different if you sell your car to a private seller or if you’re selling it while you have a loan out on your car. It also changes if you’re selling to someone who will pay you cash for junk cars.
If a private buyer is purchasing your car then you’ll need to start by filling out a title certificate and registration form. The normal information needed on the title certificate includes the odometer reading as well as any damage to the interior and exterior. From there, you’ll just need to sign your name on the certificate.
The process differs if you have a loan on your vehicle that you want to sell. If that is the case, it is possible that the lender holds the title for the vehicle. If that is the case, you need to contact the lender about the next steps to take in the process.
The most likely course involves you paying off the loan. Once you’ve done that, the bank will proceed with sending you the title for the vehicle. Once that is complete, the bank will send your state DMV a letter notifying them that the loan on the vehicle has been paid.
Signing The Vehicle Over
In order to complete the title exchange, you’ll need to sign some paperwork. The main paperwork that you’ll need to sign is the physical title document. Another important document that you’ll need to sign is the release document. You’ll sign this document as the seller and signing this releases ownership of the vehicle to the buyer.
If there were previous owners of the vehicle then you’ll need to make sure that their signatures are also on the release document. Depending on the laws of your state, you might also need to ensure that your signature is notarized. Be sure to check the requirements of your state. Once you’ve done that you’ll fill in the date of purchase as well as the amount you’re selling it for.
In order to transfer ownership, the buyer will need to fill out an application for a title with their state’s DMV. They might also need a certificate showing that the vehicle is safe and that it passes an emissions inspection. In most cases, there is a short timetable for a buyer to put the title in their name.
Some states require that the title exchange is complete in 15 days. If the process isn’t complete in that amount of time the state’s DMV will charge the buyer fines and additional fees.
Other Paperwork You’ll Need
Another document that is important for a successful title exchange is the bill of sale. The bill of sale lists the sale price of your vehicle as well as the buyer’s title application. Once the paperwork is in order both parties will send it to their state DMV. The quicker option is to file the paperwork in person, which is a better option if your state has a short timetable.
How Much Does a Title Exchange Cost?
The cost of a title exchange varies depending on the state that you live in. Some states are more expensive than others, with Alaska being one of the less expensive states for a title exchange at only $8. Other states are on the more expensive side, like Connecticut at $25 for a title exchange. These prices also don’t account for any sales tax.
Potential Title Exchange Challenges
Some things that will make exchanging the title more difficult or challenging are if you’re selling the car out of state or you’re not able to find the car’s original title. If you’re selling the car out of state you’ll need to verify your vehicle’s Vehicle Identification Number.
If you don’t have any luck finding the original title for your vehicle, most states allow you to request a duplicate title. Keep in mind that this will cost you more money. It is also important that the title is properly transferred into the buyer’s name. If this step isn’t successful you could face fees and even criminal charges depending on the actions of the buyer.
Take the Steps to Sell Your Car Today
There are many important steps to take when you’re selling your car, but none is more important than completing the title exchange. In order to legally complete the title exchange, you need to look at the requirements of your state DMV. You also need to be aware of any difficulties and challenges that you might face during the process.
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