How to sell a car without a car title. When you take out a car loan, the bank owns that vehicle until you pay them back. As a result, they keep your title until it’s debt-free. If that’s the case, check with your bank and find out their process for transferring the title to the person purchasing your used car.
Here's all the information you need to know about selling your car without the title. The primary reason a car seller won't have a title is if the bank has it instead. This typically happens when a car is financed: the bank usually takes possession of the title until the vehicle owner pays off the loan.
How to Sell a Car Without a Title. The biggest risk for the seller is continuing liability for the vehicle if ownership is not legally transferred. The absence of a title also means that the buyer cannot insure or register the vehicle. These issues can be avoided by taking steps to gain possession of the title before finalizing the sale of the vehicle.
Draft a bill of sale. If you decide to purchase the car with or without the title you should draft a bill of sale. A bill of sale is a sales agreement between two parties. Some states require that you have a bill of sale in order to transfer title.
While it's not the norm, you may be able to sell your car without a title if certain circumstances apply. But, this can be a tricky situation. It's important that the buyer and the seller are familiar with the specifics of a title-less transaction, prior to exchanging payment.
Laws on Selling Cars Without a Title. When selling a car, it is important to have the title available. After money is exchanged, the seller completes the back of the title providing the purchase price, odometer reader and buyer's name. Both parties must sign. If there is no title, things get complicated, especially when the buyer tries to place the car on the road.
Many charities will take the vehicle without a title, as long as the DMV can verify that there are no liens against the car. Some will also accept a notarized signature if you don't have the title. By donating your vehicle, you can feel good about what you are doing.
Inform the Buyer. Any time you want to sell a vehicle without the title, you need to let the buyer know the specifics of your situation. It doesn't matter why you're selling the vehicle. Even if it's not a "regular" kind of sale, the buyer must understand exactly what the issue is regarding the vehicle title.
The Reality. Though a used car dealer isn't technically supposed to sell a car without the title, it does happen. In some cases, a dealer simply takes possession of the car and displays it on the selling lot even though they're still waiting for the title to receive the title in the dealership's name.
Selling Without a Title. Selling a legally untitled car is illegal in many states. Even in states where selling an untitled car is legal, you can expect to have a very difficult time finding a buyer for two reasons. First, a buyer is likely to suspect that the car is stolen even if no theft has been reported.