Updated on: July 15, 2021
If a buyer does not register a car you sold them it will be, at best, a hassle that you need to sort. For while it's true that most people are good and simply want to live the best life possible, there are always a few who seem set on breaking the rules for their own benefit. While this happens only rarely, some car shoppers may not register a car after purchasing it. Known as title jumping, this practice lets them dodge not only the registration fees and any transfer fee or state sales tax, but also the costs and penalties incurred through parking tickets, traffic tickets, or even crimes.
So, what can you do? Selling a car can be a profitable venture, but it can also provide an opportunity for unscrupulous humans to scapegoat the previous owner of the car for a crime. It's rare, but it can happen. Here's everything you need to know about titling if you sell your car to a buyer who then fails to register it with the Department of Motor Vehicles (DMV).
See our separate guide if you're wondering how to sell a car without a title.
Make Sure the Buyer Knows to Register the Car
Sometimes, the best course of action is to provide clear instructions to the person who's buying your used car. Who knows? Maybe this is the new owner's first vehicle purchase, or their first without the help of a professional car dealer, and they genuinely don't realize they need to get it registered.
When an individual buys a car privately from you, they need to take the transferred title to their local DMV office to register the car in their own name. The car title (formally, the "certificate of title") lists its vehicle identification number (VIN), its description, and its owner's information. When a car is sold (or paid off), a transfer of title from the seller to the buyer (or from the lender or lien holder to the former borrower) is completed. Most states will issue a new title at this point. Even experienced car shoppers may not know this, though, as all the paperwork would be taken care of for them if they were to buy from a dealer.
Unfortunately, if the new owner of the vehicle fails to register their new car in their own name, the original title still stands. Any parking tickets or driving infractions caught on camera will be under the original owner's name. If any crime is committed in the car, it'll be the seller in the crosshairs of law enforcement.
Make Sure It Doesn’t Happen to You
Many states require private sellers to sign the back of the title—along with noting the date of sale, the price, and the exact odometer reading—before handing it over to the buyer. The buyer would then take the vehicle title with the seller's signature to register it and complete the transfer of ownership. Unfortunately, short of conducting the sale at a DMV office, you can't force a buyer to register the car.
Be sure to make a copy of both sides of the signed title for your records. Also make sure that the odometer reading is exact; it should document the moment ownership transferred from your name to the buyer's name. This is critical for release of liability: if you round the odometer reading up to the next zero, and the buyer gets into an accident 5 miles later, they could claim you are responsible.
It's also a good idea to complete a bill of sale. Have both parties sign it, create a copy, and then send the bill of sale to the DMV. If anything happens and the buyer fails to register the car, you'll have the proof needed to show that the car's ownership has been transferred and it is no longer in your name.
Some states, including Florida, Kentucky and New Jersey, require that license plates be turned in when they're no longer in use. Others, like Virginia, Ohio, and California, only encourage you to turn in your old plates. Whether it's required or not, returning plates to the state's DMV after a car sale is a handy extra step of protection as it cancels the registration in the original seller's name.