Your Guide to Selling a Car In Texas
Texas is home to over 14 million registered vehicles. With almost as many private owners, it should come as no surprise that Texas has a thriving used car market throughout the state.
Whether you’ve outgrown your ride, need extra cash, or are ready to upgrade, selling your car seems attractive. After all, you’ll often get more out of it than when trading in. So why not sell it?
Selling your car in Texas can be a rewarding experience. But it can also be complicated for first-time sellers. Texas has specific requirements, rules, and regulations that must be followed when selling a car to avoid unwanted surprises, legal issues, and tax penalties.
In this guide, we’ll take you step by step through these requirements so you can catch all of them. With some planning, you’ll be well on your way to selling your car in Texas.
Step 1: Preparation and Title
Before you list your car for sale, there are a few things you can do to make sure you get top dollar. First, take your vehicle in for a full-service wash. If it’s in the budget, consider paying for detailing. At the bare minimum, get a wax kit and clean the exterior yourself.
As for the interior, many gas stations have high-powered vacuums to handle the seat fabric, while a good wipe-down of the dash, windows, steering wheel, and console can bring out the best in your ride.
Top this off with an air freshener, and you’re good to go. You’d be surprised how much a little shine can add to the final price tag. The pictures will attract more buyers, giving you better options and potentially higher offers.
TIP: This is also an excellent time to locate your Texas title and registration and the certification of a vehicle passing inspection, also known as Vehicle Inspection Report (VIR), which is proof of inspection.
Step 2: How to Price Your Car for Sale In Texas
Texans can be staunch negotiators, so you’d be well-advised to do your homework and price your vehicle fairly and accurately.
Kelly Blue Book is generally the gold standard in pricing used cars. However, looking at classified and recently sold cars online in your area can give you a great idea of what the local market is willing to pay.
Step 3: Marketing and Advertising
This isn’t “Field of Dreams”. And the “if you build it, they will come” mantra doesn’t apply. If you expect to get offers on your car, you’ll need to make it known that it’s for sale.
Start by parking the vehicle where it’ll get noticed by those passing by. Ensure you have large signage indicating that it’s for sale and any other relevant info such as sales price and a contact number.
Next, hit the free online classifieds. Facebook marketplace, local forums, local social networks or groups, you name it.
Lastly, paid ads in Autotrader or your local paper might be worth a shot if you aren’t getting attention.
Step 4: Offers and Inspection
When you receive an offer from an interested party, it’s not uncommon that they would want to conduct a ‘pre-purchase’ inspection (either by themselves or a mechanic they trust). Both you and the buyer will agree on a time and a place for the motor vehicle inspection to occur.
TIP: If any issues are found, documenting them in writing and signing them by both parties can prevent any liability issues from occurring down the road.
Step 5: Signing the Title
Presuming you have a buyer in hand with an acceptable offer, the next step is to begin the transfer of ownership of the vehicle to the new buyer.
TIP: Always take precautions to ensure you get paid. This can take the form of an escrow account, a ‘half upfront, half on completion’ deal, or a transaction for cash at, say a police station parking lot.
To initiate the transfer, you’ll need information, such as your vehicle’s odometer reading and VIN number. On the back of the car’s original title, you will sign, date, and write down the vehicle’s current mileage.
TIP: This is considered a legal document, so write legibly with a good black pen.
Next up is a signature from lean holders. Before you can legally part ways with your ride, any existing lienholders must get the title signed. If you have already paid in full for your car, there should be proof of the lien release on your paper title.
TIP: Lost your title? No problem. Fill out Form VTR-34 Application for a Certified Copy of Title at your local Texas Department of Motor Vehicles or DMV. Usually, there is a small administrative fee between $2-$6.
Proper vehicle title transfers are an important step. Failure to follow DMV and Texas guidelines could result in the seller or buyer being accused or responsible for traffic violations or criminal acts committed by the other party.
Step 6: Signing the Buyer’s Application for Title
Next, you’ll need Texas Title and Registration Form 130-U, also known as the vehicle title application, which can be found online. This is the buyer’s application for the title. Fill in the purchase price of your car in the appropriate field.
TIP: This form is only suitable for 30 calendar days post-sale when the buyer legally has to ‘title’ the vehicle in their name. Adding your signature to this form gives them the legal ability to make title transfers. Failure to title a car within 30 days after the date of sale may result in delinquent transfer penalties.
Form 130-U serves as a valid bill of sale. A Texas bill of sale is a document that details the purchase and selling of personal property that must be correctly submitted before the car sale can be considered legally completed.
When a car is titled after being purchased from an individual, a motor vehicle sales tax of 6.25 percent must be paid on either the purchase price or standard presumptive value (whichever is the highest value). Acceptable forms of payment vary depending on the county.
When the buyer title and register your old car, you must hold proof of liability insurance.
Step 7: Don’t Forget to Remove your License Plates and Notify Your Insurance Company
Those license plates are your own and can be transferred to your next vehicle. Given that these license plates are registered in your name, you want to keep a buyer from leaving with your license plates.
Similarly, you want to avoid paying for insurance on a car you no longer own. Contact your Houston, Texas car insurance company and inform them of the date the vehicle is no longer legally in your name.
Step 8: Remove your Vehicle Registration Sticker
This sticker can typically be found on the inside edge of the windshield. It might take a little doing, but with the help of a razor blade (and even some rubbing alcohol), you’ll have it off in no time.
Your county of registration, license plate number, and partial vehicle identification number are all displayed on your vehicle’s registration sticker.
Step 9: Accompany the Buyer to Your Local County Tax Office to Finalize the Transaction
We’re now in the home stretch, and the finish line is in sight. Although it’s usually best to accompany the buyer to finalize the paperwork at the local county tax office representative, you can alternatively file an official vehicle transfer notification with the Texas State DMV instead.
TIP: If you opt to file a vehicle transfer notification, be advised that this needs to happen within 30 days of the date of sale.
Texas DMV changes the motor vehicle record to reflect the sale of the vehicle when it receives a notification of a vehicle transfer.
And that’s all there is to it! With some planning and preparation, you can easily sell your used car in Texas, netting you a nice chunk of change in the process.
Are you interested in Reading more about Texas?
Take a look at our Ultimate Guides on Texas Car Sales Tax and Texas Car Seat Laws.
