If a buyer does not register a car you sold them, it will be, at best, a hassle. It’s rare, but some buyers may not register a car with the Department of Motor Vehicles (DMV) after purchasing it, which means the seller remains the registered owner and title holder. 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.
Car Title Signed But Never Transferred: Here’s What to Do
- Why Might a Buyer Not Transfer Your Old Car's Title?
- Make Sure the Buyer Knows to Register the Car
- What Happens if the New Owner Fails to Register Your Car
- How to Protect Yourself
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 designed to 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. Again, it's rare, but it does happen. Below we've outlined what you need to know 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. 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 register it.
When an individual buys a car privately, they need to complete the title transfer by visiting their local DMV office in person 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 current 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 the lien holder to the former borrower) is completed. Most states will issue a new title at this point. Even experienced car buyers may not know this, though, because all the paperwork is handled for them if they buy from a dealership.
What Happens if the New Owner Fails to Register Your Car
If the new owner of the vehicle fails to register your old and their new car in their name, then the original title still stands. Any parking tickets or driving infractions caught on camera will be under the original owner's name, so law enforcement will initially think the previous owner was one in the wrong place at the wrong time, and their driver’s license will be in the crosshairs.
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 over the car 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. The problem is, short of conducting the sale at a DMV office, you can't force a buyer to register the car and 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 if your car title is signed by a private party but never officially transferred.
2. Record the Odometer Reading
Make sure 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 five 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. Include details such as the vehicle’s sale price and the buyer’s and seller’s phone numbers, 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. It’s also a handy document to have on file if you later need to seek legal advice.
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, such as 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 protection step, because 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.
5. Avoid Open Titles
An open title is when the seller signs the title over to the vehicle buyer, but leaves the buyer's information blank, and the ownership is not formally transferred. It’s very risky, illegal, and creates an opportunity for title jumping. In short, it’s best avoided.
You may have heard of bonded titles. This is when a vehicle owner makes an application for title if they don’t have a title bond. Legal owners can usually get a replacement title from their local DMV, but those applying for an open title might, for example, have lost one that wasn’t already in their name or be attempting to correct a legal document that’s lacking key bits of information. Some states permit bonded titles and others don’t. Applications may be perfectly honest and legitimate, or they could be a shady attempt to register a vehicle without a title.
