The Texas Department of Motor Vehicles has established rules for transferring car ownership to a new buyer. You can protect yourself when selling a vehicle by having all documents and records in order and following the DMV's rules to the letter. If you do not transfer ownership properly, you can find yourself responsible for tickets, taxes, liens and other costs.
Sign over the car's title to the new buyer by writing down the odometer reading, the sales price, and signing and dating the back of the title.
Remove your license plates. The plates are yours, and the new owner should use his own.
Make the buyer aware of any liens on the car. Ideally, you should pay off and release any liens before selling the car (as well as obtain a Release of Lien form from the lien holder and give a copy to the buyer). However, any existing liens transfer to the new owner along with the car's title.
Go to the county tax office with the buyer. You can find the nearest tax office on the Texas DMV website (see Resources).
Fill out and sign a Vehicle Title Application, and confirm that the buyer signed and submitted it to the county tax office. You can get the forms online (see Resources) or at the county tax office. Once the Texas DMV receives the application, you have clearly and officially transferred ownership of the car and are no longer liable for it.
Submit a Vehicle Transfer Notification to the Texas DMV within 30 days if you cannot go to the county tax office with the buyer.
Keep copies of all documents and records related to the sale (signed title, application, notification, vehicle registration receipt, lien release if applicable). If a dispute arises later, you can use the documents to defend yourself.
If at all possible, go to the county tax office with the buyer to submit the vehicle title application. While simply signing the title transfers ownership legally, the state must be aware of that transfer, or the Texas DMV sends you any bills and holds you legally responsible for paying them. Going with the buyer ensures that the state receives the paperwork and that the buyer does not delay past the 20-day deadline or simply forgets.
- Texas Department of Motor Vehicles: Title FAQs
- Texas Department of Motor Vehicles. "Add or Remove a Lien on a Vehicle." Accessed Jan. 23, 2020.
- Consumer Financial Protection Bureau. "What Is a Payoff Amount? Is My Payoff Amount the Same as My Current Balance?" Accessed Jan. 23, 2020.
- Federal Trade Commission. "Financing or Leasing a Car." Accessed Jan. 23, 2020.
- Consumer Financial Protection Bureau. "What Happens If I Still Owe Money on the Vehicle I Want to Trade-In?" Accessed Jan. 23, 2020.
- Idaho Transportation Department. "Vehicle Titles," Page 2. Accessed Jan. 23, 2020.
- Consumer Financial Protection Bureau. "What Is Negative Equity in an Auto Loan?" Accessed Jan. 23, 2020.
- Alaska Division of Motor Vehicles. "Title Change—Add or Remove an Owner." Accessed Jan. 23, 2020.
- State of California Department of Motor Vehicles. "Vehicle Registration and Title Information." Accessed Jan. 23, 2020.
- Magnussen Toyota of Palo Alto. "Should I Trade in My Car or Sell It to a Private Party?" Accessed Jan. 23, 2020.
- Federal Trade Commission. "Auto Trade-ins and Negative Equity." Accessed Jan. 23, 2020.
- The Office of the Minnesota Attorney General. "Transferring Title to a Motor Vehicle." Accessed Jan. 23, 2020.
Calla Hummel is a doctoral student studying contraband in international political economy. She supplements her student stipend by writing about personal finance and working as a consultant, as well as hoping that her investments will pan out.