How To Transfer A Car Title In Texas: The Process & Fees

Transferring a car title in Texas is an essential legal step you need to take when you are buying or selling a car. Transferring the car title ensures that the new owner is legally tied to the vehicle through the title. If you’re the seller, transferring the car title is important so you’re no longer responsible for anything connected to the vehicle. This could include toll violations, parking tickets, and crimes committed with the vehicle. If you’re the buyer, having the car title legally proves that you own the vehicle.

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How To Transfer A Car Title In Texas: Seller’s Responsibilities

In Texas, the seller of a car has several important responsibilities when transferring the car title to the buyer. Here’s what the seller needs to do:

• Sign the Title: The seller must sign and date the car title in the designated areas. This includes signing the back of the title in the “Seller’s Signature” section and the odometer reading section (for vehicles less than 10 years old).

• Provide a Bill of Sale (Optional but recommended): While not required by law, a bill of sale is a good idea. It serves as a record of the transaction, which can help protect the seller in case of future disputes.

• Complete a Vehicle Transfer Notification: The seller is required to submit a Vehicle Transfer NOtification to the Texas Department of MOtor Vehicles (TxDMV) within30 days of the sale. This informs the state that the vehicle has been sold and transfers the liability of the car to the buyer. You can do this online or at the TxDMV website.

• Remove the License Plates: In Texas, the license plates remain with the seller, not the vehicle. THe seller must remove the plates before handing the car over to the buyer.
• Provide any Required Documents: If the car still has a lien, the seller needs to provide proof that the lien has been satisfied, or the buyer may need to work with the seller to clear the lien.

Once all of these steps are completed, the buyer will be responsible for registering the vehicle and transferring the title to their name.

Buyer’s Responsibilities

The buyer also has important responsibilities when transferring a car title in Texas. Here’s what the buyer needs to do: 

• Complete the Title Transfer: The buyer must go to the Texas Department of Motor Vehicles (TxDMV) to transfer the car title into their name. You’ll need to complete the Application for Texas Title and/or Registration (Form 130-U), which is available at the TxDMV or online.

• Pay the Title Transfer Fee: The buyer is responsible for paying the title transfer fee, which varies depending on the circumstances of the transfer.

• Submit Proof of Insurance: The buyer must provide proof of insurance for the vehicle. This can be done by showing a valid insurance card or an electronic insurance verification. 

• Pay Sales Tax: Texas requires buyers to pay sales tax on the purchase price of the vehicle unless an exemption applies. This payment is made when transferring the title at the TxDMV.

• Provide Odometer Reading: If the car is less than 10 years old, the buyer should verify the odometer reading, which should be recorded on the title by the seller. The buyer will also need to sign the title to confirm the reading.

• Submit the Title and Other Documents: The buyer must submit the signed title, proof of insurance, Form 130-U, and payment to the TxDMV. If the car has a lien, the buyer will need to show proof that the lien has been released.

• Obtain New Plates (if applicable): If the seller didn’t provide plates (as Texas plates stay with the seller), the buyer will need to get new license plates for the car at the TxDMV.
•  Complete the Registration: The buyer must also complete the vehicle registration process and pay any registration fees. This must be done within 30 days of the title transfer to avoid late fees.

Once all these steps are completed, the TxDMV will issue a new title and registration in the buyer’s name.

When Can You Transfer A Car Title In Texas?

In Texas, a car title can be transferred under several circumstances. The most common situations include:

• Sale of the Vehicle: This is the most typical scenario. When a car is sold, the title must be transferred from the seller to the buyer. The seller and buyer will complete the necessary paperwork, including signing the title and submitting the required documents to the TxDMV.

• Gift of the Vehicle: If a car is being transferred as a gift (e.g., from parent to child), the title can be transferred without a sale. However, the recipient must still pay for the title transfer and registration fees, although they may be exempt from paying sales tax on the vehicle if it is a genuine gift. 

• Inheritance: If a car is inherited, the title must be transferred to the heir’s name. This can be done by providing proof of the deceased’s death (e.g., a death certificate), and in some cases, a small estate affidavit,if applicable.

• Divorce or Court Order: In the case of a divorce, the car title may be transferred as part of the division of property. Acourt order or divorce decree will be necessary to transfer ownership in these cases.

• Donating a Vehicle: When donating a vehicle to charity, the title must be transferred to the charity’s name. The donor should complete the necessary paperwork, and the charity will typically handle submitting the title transfer to the TxDMV.

• Repossession: If a vehicle is repossessed due to non-payment or breach of contract, the lender or financial institution will take possession and may transfer the title to themselves or to a new buyer once the vehicle is sold.

• Trade-In: When trading in a car at a dealership, the title is transferred from the seller (car owner)to the dealership. The dealership will handle the paperwork to transfer the title.

• Correcting or Amending the TItle: In cases where there is an error on the title (for example, a misspelled name or incorrect lienholder), the title can be transferred with corrections. This typically involves submitting the appropriate forms (e.g., Form 68-A) to a TxDMV.
• Lost or Damaged Title: If the original ar title is lost, stolen, or damaged, a replacement title can be requested and then transferred to a new owner, if applicable.

In all cases, the process for transferring a car title in Texas involves completing the appropriate forms, paying any applicable fees (such as title transfer and registration fees), and providing necessary documentation.

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Under What Circumstances Are You NOT Allowed To Transfer a  Car Title In Texas?

There are a few specific circumstances where you may not be allowed to transfer a car title in Texas. These include:  

• Outstanding Liens: If there is an active lien on the vehicle (meaning the car is still financed or has an unpaid loan), you cannot transfer the title without first paying off the lien or obtaining proof that the lienholder has released the lien. The lien must be cleared before the title can be transferred.

• Unpaid Taxes or Fees: If there are any unpaid taxes, registration fees,or penalties related to the vehicle, the title cannot be transferred until these are settled. This includes issues like not paying vehicle registration or having outstanding toll road fees.

• Missing or Invalid Title: If the title is lost, damaged, or has been altered(e.g., a title with incorrect or tampered information), it cannot be transferred unless a replacement title is issued by the Texas Department of Motor Vehicles (TxDMV).

• Unverified Odometer Reading: If the odometer reading not properly recorded on the title, or if the reading is deemed to be inaccurate or fraudulent, the transfer cannot occur until the issue is resolved.

• Name Mismatch: If there is a discrepancy between the name on the title and the seller’s legal name, the title transfer cannot proceed until the issue is corrected. This might include misspellings, outdated names (e.g., after marriage), or other errors.

• Stolen Vehicle: If the vehicle is reported as stolen, the title cannot be transferred.A stolen vehicle will be flagged in the state’s database, and any attempt to transfer the title will be blocked.
• No Proof of Ownership: If the seller cannot provide the necessary documentation, such as the original title or a valid bill of sale,thetransfer cannot proceed.

In these cases, it’s important that you address the issue before attempting the title transfer.

Associated Fees

When transferring a car title in Texas, only the new owner has to pay any fees. These include:

• Title Fee: This is usually between $28-$32, but can vary based on county.

• Sales Tax: $6.25 of the sale price or standard presumptive value, whichever is higher.
• Registration fees: The amount varies based on the county, but it usually starts at $51.75.

Special Exceptions

• Death of a Spouse: In a situation including the death of a spouse, and if the car is part of the will, it will need to go through probate court before the title can be transferred. However, if your spouse didn’t have a will, you’ll need to fill out an Affidavit of Heirship for a Motor Vehicle.

• Divorce: If you’ve been awarded a vehicle in a divorce, its required that you bring the divorce decree with you to the county tax office to apply for a title transfer.
• Gifts: If you need to transfer a car title in Texas as a gift to close relatives, the recipient won’t need to pay a sales tax. However, they will pay a $10 gift tax. They will need to fill out a Gift Affidavit form. 

Why Should You Trade Your Car In When Purchasing a New One? 

There are a lot of reasons why trading in your car is a great option. A few of those reasons include:

• Convenience: Trading in your car is a simple, one-step process. The dealership handles all the paperwork, and you don’t need to deal with the hassle of selling your car on your own.

• Tax Savings: In Texas, when you trade in your car, the trade-in value is deducted from the price of your new car purchase, which reduces the amount of sales tax you need to pay. For example, if you buy a car for $20,000 and trade in a car worth $4000, you only pay sales tax on the difference ($16,000). This can result in significant savings. 

• Immediate Transaction: You can complete the entire process in one visit, and the trade-in-value can be applied to your next vehicle purchase, making it faster than selling the car on your own.
• No Need to Advertise or Negotiate with Strangers: When you trade in your car in Texas, you avoid the time-consuming and potentially uncomfortable process of listing your car for sale, dealing with buyers, and negotiating a price.

Transferring A Car Title Conclusion

Transferring a car title in Texas is a straight-forward process, but it’s an important step to take. It will help protect you from liability and give you legal proof of car ownership.

If you’re looking to trade in your current vehicle, or simply look for a new or used car, come and see us at Tipton Jeep Chrysler Dodge. We have a large collection of new and used trucks and cars and can also help with custom tires, window tinting, and accessories. We’re in Brownsville but we serve the entire state including McAllen, Weslaco, Harlingen, and even San Antonio and Austin. Whether you need a new car, an oil change, or 4×4 accessories, we can help!

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