They say that everything's bigger in Texas, but we've got good news for used car owners: The legal process for selling a car in Texas isn't really that big of a hassle. Across America, the process doesn't vary a great deal, and the unique wrinkles you'll encounter in the Lone Star state won't be too much of a bump in the road.
Whether you're in Austin or Zapata, the bulk of the legal process for selling your car boils down to filling out paperwork – get your basic info and your John Hancock ready, and you'll be well on your way to posting an ad in Autotrader's Texas section.
Prep the Sale
According to Texas law, your car must be insured at the time of sale. Before you break out the "For Sale" sign and window paint, make sure your insurance policy is active and up to date (or take out a policy if the car in question has been out of operation for a while). Likewise, it's the legal responsibility of the seller to insure the car for the first 30 days after the sale, so you'll want to work out just the right policy termination date with your insurer.
Now that your insurance is up-to-date, you'll need the vehicle's title in order to make sure the sale is on the legal up-and-up. If you've lost the title, you'll need to complete Form VTR-34, Application for a Certified Copy of Title, at your local Department of Motor Vehicles or online via the Texas DMV's website. The application requires a current ID, a signed release of lien (if one's not already in the DMV's records) and a fee ranging from $2 to $5.45.
Transfer the Title
Now that you've done a little paperwork, it's time to do more paperwork – the most important paperwork in the car-selling process, that is. In Texas, a title transfer is required within one month of selling your car. If you fail to do so, you may be held accountable for tickets, toll violations and crimes committed with the vehicle.
To get the ball rolling, file a Texas Vehicle Transfer Notification, Form 130-U. This form signals the Texas DMV to update the motor vehicle record as "sold" and protects you from being held responsible for violations committed by the vehicle's new owner.
Now it's time to put a bow on the proceedings. Grab the vehicle's title, and you'll see a section that allows you to sign the car over to a new owner. Fill out said section – be sure to include the date of sale, the sale price and an accurate odometer reading – and hand it over to your buyer once you have money in-hand. Include a signed copy of Form 130-U for extra security.
Add Even More Security
While handing over a bill of sale to the buyer isn't legally required, it does help leave a paper trail and verify that the sale has taken place. If you provide one, include your contact info; the vehicle identification number (VIN); the car's make, model and model year; its ownership history; the transaction date; the purchase amount; and signatures of both the buyer and the seller. In some Texan counties (like Jefferson County, for example), the local tax assessor-collectors office provides pre-made bills of sale to use.
Once the title is transferred, the sale process is legally complete. If any complications arise regarding violations committed by the new owner, grab a Form VTR-275, Request for Texas Motor Vehicle Information, from the Texas DMV's site to confirm the exact month and year the title was transferred.
- CarsDirect: How to Sell a Car in Texas: Laws, Paperwork and Methods to Consider
- DMV.org: Paperwork When Selling a Car in Texas
- DMV.org: Title Transfers in Texas
- Texas Department of Motor Vehicles: Buying or Selling a Vehicle
- Texas Department of Motor Vehicles: Get a Copy of Your Vehicle Title
- DMV.org: Bill of Sale Requirements in Texas
As a freelance writer and small business owner with a decade of experience, Dan has contributed legal- and finance-oriented content to diverse sources including Chron, Fortune, Zacks.com, Motley Fool and MSN Money, among others.