Transferring a car title is an essential part of the sale or donation of a vehicle. The owner of the vehicle must be in possession of the paper title to do a transfer, and the transfer must be completed upon the sale or donation. Each of the four reasons below mark why it is necessary to transfer a car title as soon as a transaction has happened.
Reason #1: To Complete A Sale
If you sell your car to someone else, you must transfer the title to their name as soon as possible. There is a line on the car that allows you to sign the title over to the buyer. Once you sign this line and fill in the buyer’s information, the car is no longer your property. This is important if the car is used in the commission of a felony, is in an accident or causes damage to property. The buyer can claim the car is really yours, and the title will support their claim.
Reason #2: To Complete A Donation
When donating a car to a charity, you must sign the title of the car over to the charity. This allows the charity to sell the car. Also, you must have the title transferred if you plan to claim the value of the car as a deduction on your taxes. When the IRS checks into whether or not you still own the car, the title is the only thing that can support your claim that the car was donated. Plus, the charity cannot sell the car if the title is not transferred to them.
Reason #3: Ad Valorem Taxes
The moment that you sell a car, you are still responsible for the taxes on that car. Transferring the title of the car over to the buyer alleviates the burden of Ad Valorem taxes. If you have not signed the title over to the buyer, the city or state will ask you to pay taxes on the car and not the buyer.
Reason #4: For Further Sales
If you sell your car to someone who flips the car, the car cannot be sold again. The third party in this process will not be able to get the title transferred in their name because you never transferred the title to the person you sold to. You are creating a long line of problems for people who buy and sell cars if the title is not transferred.
Transferring the title to your car to a buyer or charity is simple, but the process must be done immediately to prevent future problems.
