Sell a Car to an Out of State Buyer: Tax, Laws, and Paperwork Guidelines

January 27, 2012

If you're interested in trying to sell a car to an out of state buyer, there are a few things that you'll need to keep in mind before you can complete the transaction. The process to sell a used car out of state, like the process of buying a car in the same manner, depends somewhat upon the state in which you live. It also depends upon the state that the car is going to, as there may be a buy car out of state tax for the vehicle's new owner to deal with. In order to be sure that you complete this procedure in a legal and official manner, read on for some information about how to protect your sale and ensure that it is legitimate.

Complete the Title Transfer Application

One of the most important things to keep in mind when selling a used car across a state border is that you'll have to go through with a title transfer application at both your local DMV and the DMV in the state in which the car will arrive. Begin by visiting your DMV and obtaining a paper copy of the title transfer application. Have the buyer do the same for his or her local DMV. In most cases, the procedure for transferring the title will be the same, but you'll have to complete both halves of the application. Be sure to take note of whether you're legally required by either or both states to get a vehicle inspection report, an odometer reading or any other type of official inspection before you can transfer the title. You'll have to both sign the title and the transfer applications.

Taxes

Most states do not have taxes governing the sale of vehicles, but the buyer may have to pay state taxes in order to bring the new vehicle into his or her home state. Be sure to check in with your local DMV and have the buyer do the same with his or her local DMV branch office for more information on these taxes. There are tax forms and necessary paperwork available at the DMV office or through the state DMV website as well.

Laws

There are, in some obscure cases, laws that may govern the sale of cars across state borders. For that reason, it's a good idea to speak with a representative at the local DMV or with a car dealer in your area for more information about what those taxes and laws may be and how to avoid any legal fines or penalties. These laws typically require notifying the government of the sale (which can be done through the DMV anyway.)

As with all other transactions, the informed buyer and seller are the ones that have the most success. Take the time before you enter into negotiations to learn about what you'll need to do to sell your vehicle across a state border for the most money to you and through a means that will avoid any legal penalties and fines.

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