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Overview
What Paperwork Has to Be Completed When Selling a Car?You found a buyer and the check has cleared; now you only need to complete the paperwork for the sales transaction and pay your taxes. The specific criterion for selling your car varies from state to state, but there are certain elements that always apply. The title is the main concern, and then you may need to issue a bill of sale to the buyer. Properly dealing with your tag, notifying the state that you no longer own the vehicle and paying your taxes are other main elements for selling your car.
Title
Before the sale of your car can legally take place, you must have a clear title. This means that you do not owe any money on the car, it has not been reported as stolen and it has not been excessively damaged. Your buyer may choose to get a carfax report before purchasing your vehicle, which would outline any title issues. On the back of the clear title, you must fill in the name and address of the buyer, the accurate odometer reading of the car, the sales price of the car and the date the car was sold. Both the buyer and the seller need to sign the title in the space indicated.
Bill of Sale
Some states require a bill of sale in addition to the title when you sell your car. The bill of sale is presented when the buyer registers the car with the state highway department. A typical bill of sale for an automobile will include the following:
1) Names, addresses and signatures of both the buyer and the seller
2) Description of the car including VIN number, make, model, year and body type
3) Purchase price of the car
4) Odometer reading
5) Lien-holder information, if any
Notice of Vehicle Sold
Each state has a specific form that the seller needs to complete after selling their car. Most forms include the vehicle make, model, license number, identification number, date sold and the name and address of the buyer. This paperwork must be presented to the highway department in your state immediately upon transferring the ownership of your car.
Taxes
After selling your car, you must pay taxes on either the sales price or the value of the car. The particulars will vary by state. Most often, you will need to take a copy of the bill of sale or a copy of the back of the title to the state highway department and pay your taxes. You must also turn in the tags from the car you sold, unless you plan to use them on another vehicle in your name.
Tag Transfer
While you're at your local Department of Motor Vehicles office, paying the taxes on the car you just sold and notifying them that you have indeed sold the vehicle, you can also discuss any paperwork they may require for transferring your tags to another vehicle. The paperwork will vary by state and most states give you 30 days to complete this process, but you can do it all at once if you choose.
