In Virginia, title transfer for vehicles is not just about handing over your keys and signing your name.
First, the seller has to properly assign the title. The seller must also remove the license plates on the vehicle, report the sale, and cancel or transfer the insurance policy. After that, the buyer can apply for the title in his or her own name.
In order for a vehicle title to be transferred to a new owner in Virginia, certain steps must take place. The seller must correctly complete and sign the title assignment document, report the details about the sale and the odometer reading, take the license plates off, and inform the DMV about the sale of the vehicle. The buyer must then submit the assigned title and other required documents to the Virginia DMV in order to get a new title in their name.
Complete the Assignment on the Title
In a private sale of a Virginia-titled vehicle, you must start with the original vehicle title. All owners appearing on the title should sign and print their names as sellers on the title document.
In Section A of the title, write down the complete name and address of the buyer. Also, write down the information of the sale in the spaces provided below.
- The vehicle’s current odometer reading
- The date of sale
- The actual sale price
Make sure that you are using the mileage that is shown on your vehicle instead of estimating it. If the transfer qualifies as a gift, write “gift” for the price of the vehicle. But calling the transfer a gift does not mean that it is exempt from the motor vehicle sales and use tax in Virginia. The receiver of the gift may qualify for an exemption from sales tax but must fill out the Purchaser’s Statement of Tax Exemption, Form SUT-3.
The title should be reviewed by the buyer prior to assuming possession. The buyer must ensure that they sign as stated in the title, complete required information in the Certificate of Buyer and provide details required for registration, personal property tax relief and lien information. Virginia law requires that a seller provide the odometer reading when the title is assigned.
It is recommended to have a bill of sale independent of the price that may appear in the title. The bill must mention the name of the buyer and seller and provide the vehicle identification number, the year, make and model of the vehicle, and the amount used for the transaction.
Address Any Existing Lien
The seller should refrain from transferring the ownership of the vehicle when the lien is yet to be released. If the lien is still noted in the title or in the database of DMV, gather required proofs that the lien has been discharged. Otherwise, the buyer may find it difficult to acquire the clean certificate of ownership without the documents in the buyer’s possession.
If you have misplaced or damaged the original title, rectify the matter and obtain the necessary substitute title or replacement title before carrying out the sale.
Remove Your Virginia License Plates
In Virginia, the license plate belongs to the seller, not the vehicle. Always take it off before giving the buyer possession of the vehicle so that you will not face liability issues later.
You have the option of transferring your plates to another vehicle that has the proper insurance. If that is not possible, you must contact the DMV to surrender or inactivate the plates before canceling the vehicle insurance. In addition, sellers with six or more months remaining on their registration may be eligible for a partial registration refund if they complete the refund application.
Report the Sale Before Canceling Insurance
It is mandatory in Virginia for the seller to inform the DMV when they sell, trade, donate or dispose of a vehicle in any other manner. Transaction can be reported either online, via phone or at the location of DMV.
Doing this step beforehand is essential before you contact your insurance company to cancel your policy. The insurance company may report the cancellation to the DMV. The DMV could think that you have an uninsured car if the vehicle is still in its system after your policy cancellation.
The Buyer Must Title the Vehicle
The act of signing the title conveys your ownership rights; however, the buyer needs to present the assigned title to the Virginia DMV to acquire a new title. A buyer can submit his or her application at any DMV customer service center, at a DMV Select outlet or by mail. When a Virginia vehicle is used, buyers usually need an assigned title, proof of residence, and proof of purchase for the vehicle.
Virginia typically imposes a motor vehicle sales and use tax of 4.15 percent at the time the motor vehicle is titled. The tax applies to the total selling price, with a minimum tax of $75.
Eligible residents of Virginia can complete the transfer of title through DMV’s electronic titling program instead. The parties must have a valid myDMV account, the vehicle must have a Virginia title unencumbered by any lien or hold, and the other eligibility rules must be satisfied for the electronic titling to be valid. There are some transactions for which the electronic titling option is not available, such as vehicles being titled in another state or transactions involving businesses, tax exemptions, or legal documents.
The best way to work through the process of buying or selling a vehicle is to do all documents together, make payments only after the title has been verified, and keep copies of all signed documents.
