How to Transfer a Car Title to a New Owner

Transferring a car title is a necessary step when selling or gifting your car to another individual. To prove vehicle ownership, it’s important to have a valid, up-to-date, accurate Certificate of Title.
 
Each state has unique rules regarding vehicle titles, how to get one and how to transfer a car title, as well as the fees for transferring a title.
 
Read on to learn how to sign a car title over to a new owner.
 
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What Is a Car Title?

The certificate of title for a vehicle is a legal form establishing a person or business as the legal owner of a vehicle. The title contains the vehicle owner’s name and address and other details about the vehicle. There are several classifications or “brands” of titles that each denote the specific condition of the vehicle it is being used for. 


How a Car Title Transfer Works

Any time there’s a change to a vehicle’s registered owner or lienholder, the change needs to be updated in DMV’s records within 10 days and the California Certificate of Title needs to be transferred to the new owner.
 
A change in ownership is usually due to:
  • Sale, gift, or donation
  • Adding or deleting the name of an owner
  • Inheritance
  • Satisfaction of lien (full payment of car loan)
The most common title transfer categories are:
 
Simple Transfers: As the name implies, this type of transfer requires only that the seller sign the tile releasing ownership, and the buyer sign as well. The buyer will take the title to their DMV office and apply for a certificate of title with their name and address. At this time the buyer should also apply for a vehicle registration.
 
Transfers Involving Lenders: If you financed your car and are about to pay-off the car loan, it’s time to get the title or update the tile to remove the name of the lienholder.
 
According to the credit bureau Experian, depending on what state you live in, you may already have a title with your name on it. If you do, you live in what's called a non-title-holding state, which means that your state's Department of Motor Vehicles issues the title to the vehicle owner and not the lien holder.
 
In this scenario the lien holder is listed on the title, but is not the primary name. If you live in one of these states and just finished paying your car loan, you'll want to remove the lien holder from your title. This can be done by contacting your state's DMV.
 
If you live in a title-holding state, the lien holder (the lender that financed your loan) will hold the title and it will only be released when the lien has been fully satisfied. Once you've paid off your loan, your lien should be satisfied and the lien holder should send you the title or a release document in a reasonable amount of time. Once you receive either of these documents, follow your state's protocol for transferring the title to your name.
 
Transfers Involving Dealerships: To sell or trade-in your car to a dealership, be prepared to have the title ready to present to the dealer. If you still have an outstanding loan balance on the car you should discuss this with the dealership and ask if they will work with the lienholder/financing company to ensure that the transfer of title is executed once you receive the money for the and payoff the remainder of your loan.
 
Transfers Out of State: If you’re selling your car to an out-of-state buyer or you are buying a car from someone in another state, be prepared to do some extra paperwork and pay an out of state transfer fee.


What Will I Need to Transfer My Car Title?

When a car is sold, a transfer of title is required, so that the new owner is designated as the legal owner of the vehicle. This requires specific paperwork to be submitted to the Department of Motor Vechicles. Car title transfer requirements often vary by state. However, here are the items required to transfer a car title in California:
  1. Have the California Certificate of Title handy. If you do not have the title, complete an Application for Duplicate or Transfer of Title (REG 227)
  2. Make sure the title has been signed by the buyer(s), seller(s), and lienholder (if applicable).
  3. Have the following: Your driver license number, the vehicle’s license plate number, the vehicle identification number (VIN), the legal owner’s (or lienholder’s) name and address, the vehicle make and model year, and the purchase date and price.
  4. Write the odometer mileage reading on the title (unless the vehicle is 10 years old or older, commercial with a GVW or CGW of more than 16,000 pounds, or new and being transferred prior to its first retail sale by a dealer).
  5. Smog Check: According to the California DMV Smog Inspection webpage, if you are selling your car, you need to give the new owner a valid smog certification when you sell the car. If the car you are selling is less than four years old, you do not need to get a smog inspection. Instead, the new owner of the car will need to pay a smog transfer fee.
For more details visit, California DMV Title Transfers.


Cost to Transfer a Car Title

Transfer fees vary from state to state. Depending on the type of transfer, in California you may need to pay the following fees:
  • Duplicate title
  • Transfer
  • Use tax, based on the buyer’s county of residence
  • Registration
  • Penalties
See the full list of fees.
 

How Long Does It Take to Transfer a Car Title?

Using California’s DMV Virtual Office, you can submit a title transfer request as long as you have a title signed by both the buyer and seller, and the other required information mentioned earlier in this article. If all items are submitted, it will take approximately 30 days from the day DMV gets your documents to process a Virtual Title Transfer.


Other Factors to Consider

Potential issues can arise when transferring a title, including:
 
Missing Car Title: If your car title is missing or you are interested in purchasing a car from someone who doesn’t have their title, a new title will need to be purchased from DMV.
 
Wrong Name on Car Title: Whether you or another person signed the title on the wrong line, a name is misspelled on the issued title, or there are any name errors, these will need to be corrected by taking the title to DMV and explaining the error.


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