Your vehicle and its title have one thing in common. They both require maintenance. When you buy or sell a used vehicle, but neglect to properly handle the necessary paperwork, you may find yourself liable, fined or penalized for the buyer’s mistakes while driving a vehicle whose title is still in your name.
An auto title is a legal certificate of ownership issued by the Department of Motor Vehicles (DMV). It lists the current owner’s name and address, the make, model and year of the vehicle, and the first date sold. Whenever a vehicle is sold, traded in or given away, the vehicle’s title must be reassigned to its new owner.
Texas state law requires a vehicle to be titled in the buyer’s name within 20 business days of its sale. However, not all sellers and buyers comply with this requirement, causing many thousands of vehicles to remain titled in the names of the sellers.
Without properly transferring the title, the seller could be held responsible for tickets, toll violations, accident liability of the buyer, or could even have property seized if the vehicle was used to commit a crime after the date of sale. A fresh auto title is prepared by the DMV and mailed to the new owner, listing the buyer as the current owner. Even if you are just giving the car to a family member, the process to transfer the car title in Texas is still the same.
What can you do to protect yourself? Knowing and following the rules for vehicle title transfers is the best protection.
How to Transfer the Title of the Vehicle You Are Selling
You must hand over the vehicle’s title to the buyer. Sign and date the title. Write in the buyer’s name, as well as the purchase price. You, as seller, should write down, also, the current odometer reading, unless the vehicle is 10 or more years old, rated by the manufacturer with a carrying capacity of two tons or more, or if it’s gross vehicle weight rating exceeds 16,000 pounds.
Give the buyer the vehicle’s latest registration receipt. If you cannot find it, you can get a copy from your county tax office. Locate your county tax office.
Complete the Application for Texas Certificate of Title, Form 130-U. The buyer needs this form to apply for a new title in his or her name. The seller will list the odometer reading, VIN and sales price. Both parties must sign Form 130-U and list their addresses. If you are giving the car to someone, put $0.00 for the sales price and select “Gift Tax $10.00.” The tax amount will be $10.00. Keep for your records the Vehicle Identification Number (VIN) from the title and the buyer’s contact information. If there is a lien on the car, you will enter on Form 130-U the first lien date and when the security agreement was signed by the financial institution or individual financing the vehicle. Also include the lienholder’s name and address.
It’s a good idea to accompany the buyer to the county tax office just to be sure your name is officially removed from the title. To complete the vehicle title transfer, both the buyer and seller should take the necessary documentation to the tax office. Locate your county tax office.
Remember to take to your local county tax office:
·completed Application for Texas Certificate of Title, form 130-U
·proof of insurance for buyer
Remove your license plates from the vehicle. You can transfer them to your next vehicle. Removing your plates will force the buyer to re-title the sold vehicle in his or her name, which protects you. Also, be sure to remove your windshield registration sticker.
If you can’t make it to the county tax office, or if you are not sure the buyer will follow through, you must submit a Vehicle Transfer Notification. The Vehicle Transfer Notification will help protect you as seller, and might save you the hassle of proving that you weren’t the vehicle’s owner when it was parked in a red zone. You, as seller, have only 30 days to remove liability. This lets TxDOT know you no longer own the vehicle, and removes you from being held liable for anything the new owner may do with the vehicle. This form must be submitted to your County Tax Office. See options for Vehicle Transfer Notification.
Try to get a receipt as proof that you transferred your title. A Bill of Sale signed by both you and the buyer should be sufficient. You, as seller, are not required to submit a Bill of Sale at the time of sale and transfer, but it is helpful in providing extra documentation.