There are over 22 million cars registered in the state of Texas, more than half of which were bought privately. In 2018 used car sales nationwide surpassed new vehicles sold by over 23 million. If you're reading this article, chances are you're attempting to navigate the transfer process like millions of used car owners before you. Luckily this is a simple undertaking with a little preparation.
What Paperwork Do You Need to Transfer Car Title in Texas
- Valid state-issued title (with mileage disclosure for vehicles under 10 years old)
- Accepted Proof of ID
- Original Power of Attorney documentation and identification (if applicable)
- Bill of sale
- Proof of inspection (within 90 days of purchase)
- Insurance information for the vehicle
- Form 130-U (Application for Texas Title and/or Registration)
Regulations for Selling Used Vehicles in Texas
Texas has quite a few state-wide regulations for private sellers and buyers, and some counties have additional requirements, as well. Here are the major ones:
You can't sale more than 5 vehicles a year privately.
In Texas, private sellers must apply for a dealer's license if they profit from the sale of more than five cars yearly. This law also requires that vehicles sold without a dealer's license be in the seller's name on the title and sold for private use only.
You'll likely need a safety and emissions test before selling.
Texas requires that vehicles between 2 and 24 years old be able to pass an emissions test and have a current report on file. If an inspection was conducted more than 90 days before the vehicle sale, the new owner will be responsible for arranging another inspection before registering the vehicle.
If you're acquiring the car from another state, then you'll need a Vehicle Inspection Report (VIR) from a state-authorized testing facility, since Texas doesn't recognize VIRs from other states.
Diesel-powered vehicles and gas-powered vehicles under 2 years old or over 24 years old are exempt from emissions testing requirements. Safety inspections, on the other hand, have no exemptions.
All Texas-registered vehicles that are in-use must have a current safety report on file—this protects both the driver and other motorists from accidents caused by vehicle malfunctions.
Buyers are responsible for paying a sales tax.
Buyers of privately-sold cars are subject to a 6.25% sales tax, regardless of where the vehicle was purchased. You can calculate the amount owed by taking 6.25% from either the price paid or the "presumptive value," whichever is greater of the two.
The TXDMV website has a sales tax calculator tool where you can enter the mileage and VIN, and it will give you an estimate of the amount owed. Alternatively, you can contact your county tax office for an estimate.
The car must be titled in the seller's name.
The title must be in the legal name of the seller before it can be legally transferred to another person. If the car is titled in someone else's name, the seller will need to provide a bill of sale from the previous owner and have the vehicle titled in their name before the transfer can take place. If the car has a co-owner, both parties must be present and willing to sign the bill of sale and title.
You're only allowed a 30 day grace period to register your car.
You must register your new vehicle within 30 days of purchase. Failure to register your car is a crime and can result in delinquency fines or even jail time.
You must have a vehicle sticker.
Texas implemented the "two steps, one sticker" program in 2013. Every car on the road must have a sticker since these serve as proof of registration and vehicle inspection. These stickers help reduce the amount of unsafe or high-emissions vehicles on TX highways.
The owner must settle all liens before selling.
You must pay off any debts associated with the automobile before you can legally transfer it to someone else. After receiving payment, the lending institution will submit a lien release form, which will remove their name as the legal owner of the car. Once this information is processed, the DMV will issue the seller a new paper title or update the e-title in their database. The seller may proceed with the sale upon receiving the updated paper title or correspondence that the owner's information on the e-title was corrected.
The state of Texas requires owners to pay a fee when adding or removing a lien from a title. The cost ranges from $28-$33 per lien and depends on the county where you live. You'll need to take the lien release form and an accepted method of payment to finalize the lien removal.
Steps to Transfer a Car Title in Texas
- Obtain the title and a bill of sale from the seller
- Request a current VIR at the time of sale
- Visit your insurance agent to have liability coverage put on your new vehicle—don't make the mistake of waiting to do this, you can be slapped with a hefty ticket for driving uninsured.
- Check with your county tax office to see what you owe in sales tax. Unless your county has an online payment portal, you'll have to make an in-person visit to pay. Accepted forms of payment types vary by county. We suggest calling ahead to see which payment methods they take before making the drive.
- Apply for registration and title. You must title and register your vehicle within 30 days from the date on the bill of sale. You can face penalties if you wait too long to fill out your application.
- The DMV will issue you a temporary tag when you register the vehicle--this will hold you over until your permanent tag comes in the mail. Temporary tags expire after 30 calendar days.
- If you buy your car during a weekend, you'll need to obtain a Vehicle Transit Permit from the DMV website. The permit will allow you to legally drive the car before you have a chance to register and title it. The DMV will only issue a permit once per vehicle transfer, and the permit will expire after 5 calendar days.
- Check the mail regularly for your registration sticker, insurance information, and vehicle tag.
- Put the vehicle registration/inspection sticker on the windshield in the upper corner on the driver's side.
Tips and Tricks for Texas Title Transfers
Avoid unnecessary frustration by following these simple tips during the transfer process:
Make a checklist of all the information you need.
Making a list ahead of your visit can eliminate a lot of unnecessary aggravation when dealing with the DMV. Transferring a car title requires a lot of paperwork, and forgetting just one essential piece can mean you have to come back and start the process all over. Some special circumstances, like transfers between relatives or from a deceased spouse, require additional information. In these cases, we suggest calling your local office to make sure you have everything you need.
Create a folder specifically for your title transfer information.
Designate a folder for your vehicle transfer information to make finding your vehicle information easier should your insurance company or the DMV request something.
Include the following in your folder:
- The vehicle title
- Buyer information
- Title transfer notice application
- Release of liability
- Insurance information
- Bill of sale
- A slip of paper with the Vehicle Identification Number (VIN)
- Any receipts for car maintenance or other services
Do what you can online.
The TXDMV and TXDPS online portals allow Texas drivers to handle essential DMV services faster than an office visit. The database processes information almost instantaneously, meaning applicants receive the requested materials faster than through mailing. Unfortunately, the system has its limitations. Drivers with suspended licenses must make an in-person visit, the same goes for other extenuating circumstances.
The online portal can help you accomplish simple things like filing a Title Transfer Notice, license renewal, and change of address, as long as you have a debit or credit card. As of now, the website doesn't support any duplicate title requests. However, you can print the application from the site and mail it in.
Fill out applications before your office visit.
Most DMV forms are available for download from the online portal. We highly suggest you print and complete these forms ahead of your visit since this can streamline the process and make things easier on the person assisting you.
Avoid extra fees by paying by cash or check.
TXDMV offices accept most major debit and credit cards, but they tack on a small processing fee for using a card. It's an automatic $2.50 to use a card regardless of if you're paying in-office or by phone, mail, or fax. All fees are nonrefundable.
Make copies of everything.
Proper documentation can spare you a lot of headaches if legal issues arise. Make two copies of everything, including the bill of sale, title transfer notice, the release of liability, and anything else both you and the buyer have to sign.
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