Selling a Car In Texas: Understanding the Process
Selling an automobile privately can be more difficult than selling it to a dealership. When you sell your vehicle to a used car dealer, they understand the requirements and have most of the documents required to finalize the sale. You won’t have to personally go to the Texas Department of Motor Vehicles or provide the necessary documentation to register the transaction.
If you’ve ever bought or sold a used car or truck in Texas privately, you know the process can be almost as bad as getting a tooth pulled. It couldn’t have been more perplexing, and the state personnel in charge couldn’t have been less accommodating. I recently sold my old car, detailed the process, and I’d like to share it with you now.
All the steps on How to Sell a Car In Texas
- Prepare the vehicle for sale.
- Gather information about the vehicle.
- Get the proper paperwork from the Texas Department of Motor Vehicles.
- Calculate the car’s worth.
- Locate a buyer.
- Negotiate the purchase.
- Meet the purchaser.
- Understand your legal responsibilities.
- Complete the transaction.
Step 1 – Sign the Title over to the Buyer.
This is the section you want to get right. Obtaining a new title is more straightforward, but it will also cost you time and money.
A Certificate of title in Texas is a 2-page document (front and back) that serves as formal proof of ownership. The automobile is owned by whoever has the Title. On the first page, the Title lists the owner or owners of the vehicle. It should be signed by the new owners as soon as they receive it (but no one ever does—just it’s stuffed in the glove compartment). Do it right now. The signatures should be written precisely as the owners have done above them (spouses’ or co-signers’ signatures go beside each other).
After that, turn the Title over to the buyer. This is where the actual sale happens. Assignment of Title is the 1st box at the top. The complete automobile sale takes place here. The buyers enter their names and address on the 1st line. The names need to match what the customer wants their new Title to say.
Now you record the mileage as it appears on the OD. Check none of the boxes unless your OD has exceeded the limit (which is improbable, see box #1) or is damaged or not working (box #2).
Ok great, now put the selling date.
The crucial thing comes next. Write your signature on the line above the Seller/Agent Signature. Fill in the signatures in the order they show on the face of the Title (spouses, co-signers). Then, on the line next to your signature, please PRINT your names EXACTLY as they are typed on the front side of the Title (no punctuation).
Fantastic. Almost finished. The Buyer now repeats the process on the line below yours. Again, the names need to look EXACTLY how they wish on their new Title. There is no punctuation, and only names or signatures are needed.
Ok, great. You just transferred the Title. Your automobile is now in possession of the new owner. Is it that straightforward? No. There’s a lot more paperwork and standing in line at the county Tax Assessor’s office ahead of you. But you’ve finished the most crucial part.
Step 2 – Complete and sign a Texas Title Application.
The Texas Department of Motor Vehicles affectionately refers to this as 130-U. Transferring the Title is essential; you cannot purchase or sell a vehicle without it. They will evict you from the Tax Assessor’s office if you do not have it (the last time I purchased a used car in Texas, I scribbled a bill of sale on a stray business card in my glove compartment and carried it to the Tax Assessor). They were laughing in my face).
Oh, and it’s just as perplexing as an IRS Form 1040, minus the helpful instructions.
To begin, choose the Title & Registration checkbox at the top. Perform NOT do ANY of this in front of the Tax Assessor’s office, or she will throw you out into the street for “changing a government document.” Do all of this in the privacy of your home/car/tax assessor parking lot or with the buyer/seller.
Fill out as all information as you can in boxes 1-12. This is where you write the VIN (make sure it matches the VIN on the Title), model year, make (the company that manufactures your car), body style (copy what it says on the Title), color, minor color, model, Texas license plate number, odometer reading (this better match the odometer reading on the Title) (and, again, only check the box if you check-marked one on the Title), and the rest just leave blank.
Now go to Box 13 and choose “Individual” unless you’re selling your automobile to the government or a business, in which case select the appropriate choice.
Now we’re getting down to business. Fill in the BUYERS’ first, middle, and last names (this form calls them “applicants”) EXACTLY as they appear on the transferred Title in boxes 16 and 17. The “additional applicant” is the co-husband, buyer, or wife. Do not mess this up. If you do, the tax assessor’s office lady will laugh as she ushers you out the front door into the parking lot.
Now we’ll go to Boxes 18 and 19, where the buyer will enter the address and their county of residence (note that the form changes to now calling the Buyer the “owner”).
Good. The seller (who the form refers to as the “Previous Owner”) must now provide their name(s), city, and state. Once again, make sure this corresponds to the name(s) on the Title.
You may now go to Box 37, where you will enter the vehicle’s selling price. This is the final selling price. Please don’t attempt to fib and say you bought a 1981 Ford Bronco for $100 as I did with my first automobile when I was 15. They’ve gotten smarter since then, and they just search up the car’s worth on the internet. Fill in the actual cost. Fill in nothing else in this box. The kind folks at the tax assessor’s office want to figure out how much tax you owe them. And, yeah, they’ve heard the one about how this automobile has been taxed several times and how this violates your constitutional rights, etc.
Finally, we are nearing the conclusion. Proceed to the Certification Box. The sellers sign their names above the line that says “Signature(s) of Seller(s)” and print them next to it. Print them in the order they appear in the Title. Then there’s the date, and this has to be the same date as the Title or else.
Finally, the buyers (who are now referred to as applicants/owners on the form) sign and print their names on the lines below. The names and dates must match those on the Title.
Ladies and gentlemen, we have completed the necessary documentation. But, to be safe (and to lay out the terms of the acquisition), we need to do one more thing. The Sale Agreement.
Step 3 – Complete and sign a Bill of Sale.
You are not necessarily to have this. The state is unconcerned, and it’s not even interested in seeing it. It is just a written agreement between you and the buyer and seller about the parameters of the automobile purchase. I made one up after doing some research on the internet. This is a link to it.
This is significant because it specifies the date of the transaction, the purchase price, and, most importantly, that the sale is being made AS-IS. This implies that the customer receives the vehicle with no warranties, promises, or guarantees. Only the automobile. Tough beans if something goes wrong as soon as the customer pulls away. It is now their concern. Everyone signs this, and the vendor maintains a copy.
Step 4 – Collecting Payment.
This is the simple part. The buyers pay the total purchase price in cash or with a cashier’s check. DO NOT LET GO OF THE TITLE UNTIL THIS IS COMPLETED. Accepting payments, seeing the customer later to pick up the money, receiving a personal check, and so on are all unacceptable. This is the point when the rubber hits the road. Only a cashier’s check from a credit union/bank (or cash )will be accepted.
County Tax Assessor’s Office.
Prepare to have a good time! The Buyer brings the transferred Title and application to the proper county tax assessor’s office (who knows why it’s the tax assessor and not the department of motor vehicles). That’s how Texas is) and gets in line.
The helpful clerk will complete the rest of the form, lead you through the rest of the procedure, and accept your money. Bring cash or a check because they don’t accept credit cards (actually, they do, but you’ll be charged a 5% fee (a lot on a vehicle purchase) if you use one).
If you performed everything incorrectly (unlikely), you should obtain your new Title in four to six weeks.