Do you live in California? Are you considering selling your car? Then this guide is for you!
Whether you’re on the hunt for a new ride, have outgrown your current one, or simply need some extra ‘walking around’ money, selling your used car in California is a great option.
But don’t just go posting a for sale ad online or in the paper. Although there are a multitude of options when it comes to selling your car in Cali, the state has made the process increasingly complex over the years.
In this guide we’ll take you through all of the ins and outs, helping you stay compliant and legal while cashing in on your old ride.
The Process from A-to-Z: everything you need to account for when selling a car in California
Any time a car changes ownership on the title (even if it is a gift or inheritance), the California state DMV classifies this as a ‘vehicle transfer’, thus making the process subject to certain documentation, fees, and other rule and regulations.
It is also important that you maintain insurance on the vehicle up until the point at which it is transferred to the new owner. Coordinate with your California car insurance company to date the end of the policy to coincide with the date of the sale/transfer.
When Completing the DMV Vehicle Transfer Process, you’ll need to have the following documentation on hand:
1. Your car’s title
If you’ve had your car for a long time, you might not even remember where you put the darn thing. In this case, you’ll need to fill out the REG 227 form, known as a Certificate of Title or Application for Duplicate Title or Paperless Title. Both the seller (you) and the buyer (some other third party) will need to fill out the REG 227, and provide a notarized lienholder’s release (if applicable).
Given that this is a legally binding transaction, the appropriate signatures of the seller(s), buyer, and lienholder (such as a lender) must be obtained.
3. Payment of Fees
No sale in California would be complete if the state didn’t get it’s share. As such, CA charges a “Transfer Fee” and other California Car Registration Fees that must be paid to the DMV.
Other Items May Need Depending on Your Situation
1. Form REG 262 (Vehicle or Vessel Transfer and Reassignment)
The bad news is that this form isn’t available online. The good news is that you only need this form if the car has been sold more than one time with the same title. If needed a call to the DMV at 800-777-0133 is all it takes to have the form mailed to you.
2. Form REG 101 (Statement to Record Ownership / Statement of Error or Erasure)
Titles can be complicated and errors do happen. If misinformation or inaccurate information is on the title in error, this form needs to be filled out by either the party who made the error, or the party whose name appears in error.
3. Form REG 256 (Statement of Facts)
If you acquire the vehicle from a family member, the new owner will need to complete this form.
4. Form REG 166 (Lien Satisfied / Title Holder Release)
Instead of the Certificate of Title, the REG 166 form may be used by the lienholder or legal owner of the car to release any financial or other interests in the car. Please note that this form must be notarized if you intend to submit it along with an Application for Duplicate California Title.
5. Form REG 138 (Notice of Transfer and Release of Liability)
This form is required by the state any time an owner of a vehicle registered in California transfers or sells their interest or title to the vehicle. This notice must be submitted within five (5) days from the date of the sale or transfer and is designed to release the owner (you) from any criminal or civil liability resulting from the new owner’s operation of the vehicle (i.e. parking tickets, etc.).
6. Form REG 5 (Affidavit for Transfer Without Probate for a California Titled Vehicle)
In the unfortunate situation where the current owner of the car has been deceased for 40 or more days, and in cases where the value of their estate does not exceed $150,000, this form must be filed. Generally, the REG 5 form would be filled out by the ‘next of kin’ or whoever was the designated “executor” of the estate. If that’s you, you’ll need to fill this out before selling the vehicle.
7. Odometer Disclosure on the Title (or Form REG 262)
If your car is less than 10 years old, you are required to submit this disclosure. Two exceptions are if the car is new and being transferred before it’s first ‘retail sale’ by a dealer, or if your car is more than 16,000 pounds (generally only applies to semi-trucks and commercial vehicles).
8. Obtain a Smog Inspection Certification
This is required unless your vehicle meets one or more of the following exceptions:
- The car is a 1975 or older model and is gasoline-powered
- Car is a 1997 or older model and/or has a gross weight of over 14,000lbs AND is diesel-powered
- The car weighs more than 14,000lbs and is powered by natural gas
- Car is electric-powered
- Car is less than 8 model-years old and is gasoline-powered
If needed, you can obtain a “vehicle emission system statement” (SMOG report) by filling out form REG 139 and having your car inspected at a designated testing center.
9. Collection of Use Tax and Other Applicable Fees
As part of the sale, you will need to pay taxes and other fees that will likely be dependent (at least in part) by the city and county you live in. Example: county specific fees, sales and use tax.
10. Submission of All Forms and Report of the Transfer to the California DMV
Within 5 days you (the seller) are required to report the transfer to the DMV. You will need the last 5 digits of the VIN (be sure to take a picture or write this down), the license plate number and the new owner’s name and address.
Final Thoughts on How to Sell a Car in California
Selling a car in California might seem like a hassle, and in some ways, it can certainly be discouraging. But with a little planning and preparation of paperwork, you can be well on your way to selling your old car and getting a nice chunk of change.
By following the steps in this guide you can make sure you’re compliant with CA rules and laws from start to finish, and that the transfer will be legally recognized in the state.