Private-Party Vehicle Sales
Although private-party vehicle sales can be a great way to get a deal on a car, it can be a complicated process with a lot of important steps to follow. Following all the steps and completing all the required paperwork is extremely important, to ensure the transfer is completed. This protects both the buyer and seller. The buyer needs to ensure the vehicle is transferred into his or her name, to prevent problems with future registration or sale of the vehicle. The seller needs to ensure his name is removed from the vehicle, so he is not held liable for the new owner's accidents, registration problems, or parking tickets.
The California Vehicle Code provides many requirements for transferring a vehicle, which are discussed below.
When you transfer a vehicle that is four or less model years old, a smog certification is not required. For vehicles more than 4 years old, the seller is required to provide the buyer with a valid smog inspection certificate at the time of transfer (inspection certificates are valid for 90 days after issuance), unless the vehicle is exempt (Vehicle Code §4000.1). Common types of exempt vehicles include hybrids, diesels, electric vehicles, and pre-1975 models. The seller does not have to provide a smog inspection certificate when transferring a car over 4 years old if:
- The transfer occurs between a spouse, domestic partner, sibling, child, parent, grandparent, or grandchild; OR
- A biennial smog certification was submitted to DMV within 90 days prior to the vehicle transfer date.
To find a smog station, consult the Bureau of Automotive Repair's list of licensed stations at http://www.bar.ca.gov/70_SiteWideInfo/02_Tools/02_FindaStation.html.
Most smog inspection certificates are submitted to the DMV electronically. Documents given to you by the smog station will contain the inspection number, which can be used to find your smog certification record at the DMV. For more information about smog requirements, see http://dmv.ca.gov/vr/smog.htm.
Releasing ownership of the vehicle
The seller must sign the title to release his or her ownership of the vehicle. If the vehicle was financed, the lienholder (usually the bank or credit union) must also sign the title (Vehicle Code 5750-5751). For more information about how to properly sign the title, see http://dmv.ca.gov/pubs/brochures/fast_facts/ffvr32.htm#sign. There is also an instructional video at http://apps.dmv.ca.gov/vr/vrvideos/title_transfer/title_transfer.htm
Reporting the odometer reading
State and Federal law require an accurate, written disclosure of the car's mileage. For cars less than 10 years old, California Vehicle Code §5900(b) requires the seller to provide the odometer mileage. Depending on the age of the title, there may be a designated space on the title for this information. If not, the seller must use the Vehicle/Vessel Transfer and Reassignment Form (Form REG 262) to record this information. The DMV requires an original REG 262 printed on special security paper, so the form is not available online. You can obtain the form by mail by calling 1-800-777-0133, or pick one up in person from a DMV office. For more information about odometer mileage reporting, see http://dmv.ca.gov/pubs/brochures/reg/odometer.htm.
Reporting the transfer to DMV
Under California Vehicle Code §5900(a), the seller has 5 days to report the transfer to DMV by completing Notice of Transfer and Release of Liability. This may be submitted electronically using the online form at http://dmv.ca.gov/online/nrl/welcome.htm, or you may download a form from http://dmv.ca.gov/forms/reg/reg138.pdf and submit it in person or by mail. This form formally releases you from liability for this vehicle (Vehicle Code §5602), in case purchaser has an accident or gets parking tickets. For more information, see http://dmv.ca.gov/online/nrl/nrlfaq.htm.
Under California Vehicle Code §5902, the buyer has 10 days from the date of sale to report the transfer to the DMV, and 30 days to from the purchase date to pay all transfer fees. Be sure to pay these fees, even if you do not yet have all of the required documents, such as a smog certificate. Failure to pay these fees within 30 days results in penalties.
To report the vehicle transfer, you will need to visit a DMV office. To make this process faster, you may make an appointment online at http://www.dmv.ca.gov/foa/welcome.do?localeName=en or by calling 1-800-777-0133.
When you go to the DMV, bring the vehicle title signed by the previous owner, and showing the odometer mileage if the vehicle is less than 10 years old. If the title does not have a designated space for the odometer information, bring a completed Vehicle/ Vessel Transfer and Reassignment Form (REG 262). If the vehicle is over 4 years old and not exempt from the requirement, you will also need a valid smog inspection certificate. If the seller submitted a biennial smog certification to the DMV within the previous 90 days, you will need a statement, signed by both the buyer and seller, stating that fact.
At the DMV, you will be required to pay transfer fees and applicable smog fees and use taxes. The DMV agent assisting you with the transfer will calculate these fees based on the specifics of your transfer. More information about transferring a vehicle available at http://dmv.ca.gov/vr/topbuysell.htm
For more information on this and other "Everyday Law" subjects, visit the Sacramento County Public Law Library, "Providing Free Public Access to Legal Information for over 100 years."
Mary Pinard Johnson, Public Services Librarian
January 31, 2013