If a buyer does not register a car you sold to them it will be, at best, a hassle that you need to sort. While this happens only rarely, some car shoppers may not register a car with the Department of Motor Vehicles (DMV) after purchasing it. Thankfully, there are some steps you can take to protect yourself, including completing a bill of sale, making an odometer declaration, and being aware of local state laws that might apply.
Why Might a Buyer Not Transfer Your Old Car's Title?
It's worth knowing why a buyer might not transfer the title of an old car from its previous owner. It's a practice known as title jumping, and ultimately is designed in the hope they can dodge not only the registration fees and any transfer fee or state sales tax, but also the costs and penalties incurred through parking tickets, traffic tickets, or even crimes. As we've said, it's rare, but it can happen. Below we've outlined what you need to know about titling if you sell your car to a buyer who then fails to register it with the DMV. See our separate guide if you're wondering how to sell a car without a title.
Make Sure the Buyer Knows to Register the Car
Sometimes, the best course of action is to provide clear instructions to the person who's buying your used car. Who knows? Maybe this is the new owner's first vehicle purchase, or their first without the help of a professional car dealer, and they genuinely don't realize they need to get it registered.
When an individual buys a car privately from you, they need to complete the title transfer by visiting their local DMV office to register the car in their own name. The car title represents (formally, the "certificate of title") proof of ownership and lists the vehicle identification number (VIN), its description, and its owner's information. When a car is sold (or paid off), a transfer of title from the seller to the buyer (or from the lender or lien holder to the former borrower) is completed. Most states will issue a new title at this point. Even experienced car shoppers may not know this, though, as all the paperwork would be taken care of for them if they were to buy from a dealership.
What Happens if the New Owner Fails to Register Your Car
Unfortunately, if the new owner of the vehicle fails to register your old new car in their own name, the original title still stands. Any parking tickets or driving infractions caught on camera will be under the original owner's name. If any crime is committed in the car, it'll be the seller and their driver’s license in the crosshairs of law enforcement.
How to Protect Yourself
Many states require private sellers to sign the back of the title—along with additional information such as the date of sale, the price, and the exact odometer reading—before handing it over to the buyer. The buyer would then take the vehicle title with the seller's signature and a signed odometer disclosure to register it and complete the transfer of ownership. Problem is, short of conducting the sale at a DMV office, you can't force a buyer to register the car and therefore complete the title transfer process. Here, then, are some sensible steps you can take to protect yourself:
1. Make a Copy
Be sure to make a copy of both sides of the signed title. Having your own unofficial duplicate title for your records could save time and hassle in the long run in the event your car title is signed by a private party but then never officially transferred.
2. Record the Odometer Reading
Also make sure that the odometer reading is exact; it should document the moment ownership transferred from your name to the buyer's name. This is critical for release of liability: if you round the odometer reading up to the next zero, and the buyer gets into an accident 5 miles later, they could claim you are responsible.
3. Complete a Bill of Sale
It's also a good idea to complete a bill of sale. Have both parties sign it, create a copy, and then send the bill of sale to the DMV. If anything happens and the buyer fails to register the car, you'll have the proof needed to show that the car's ownership has been transferred and it is no longer in your name.
4. Check Local State Laws
Some states, including Florida, Kentucky and New Jersey, require that license plates be turned in when they're no longer in use. Others, like Virginia, Ohio, and California, only encourage you to turn in your old vehicle registration plates, but don’t mandate it. Whether it's required or not, returning plates to the state's DMV after a car sale is a handy extra step of protection as it cancels the registration in the original seller's name.
By following the steps above you can't entirely rule out the possibility of foul play. But you'll certainly be in a better position should you be unfortunate enough to sell your car to somebody who has no intention of transferring its title.