What to Do After Selling a Car with Title: A Step-by-Step Guide

Congratulations on selling your car! Now that the title has been signed over and the keys handed off, it’s important to take a few essential follow-up steps to protect yourself from liability, avoid legal issues, and ensure a clean transition.

In this guide, we’ll walk you through everything you need to do after selling a car with a title, including:

• Reporting the sale to the DMV
• Canceling insurance and registration
• Keeping copies of documents
• Protecting your personal information
• And more

Let’s get started.

🚗 1. Report the Sale to Your State DMV

One of the most important things to do after selling your car is to notify your local Department of Motor Vehicles (DMV) that the vehicle is no longer in your possession.

Why It Matters:

• Prevents future liability for traffic violations or tolls
• Avoids responsibility for taxes or fees after the sale
• Helps prevent identity theft or fraud if the buyer misuses the car

How to Report:

Most states allow you to report online, by mail, or in person.

📞 Even if not required, reporting the sale protects you from future headaches.

🪪 2. Remove License Plates and Return Them (If Required)

After the sale, you should:

• Remove your license plates
• Return them to the DMV (in some states)
• Or transfer them to another vehicle if allowed

Check your state’s requirements—some require plate return immediately, while others allow you to keep them for a set period.

🏦 3. Cancel or Transfer Insurance Coverage

Once the car is sold:

• Cancel your insurance policy for that vehicle
• Or notify your insurer that the car has been sold

This ensures you won’t be charged for coverage you no longer need and prevents potential claims or liabilities tied to the new owner.

💡 Some insurers offer a “release of liability” form confirming you’re no longer responsible for the car.

📝 4. Keep Copies of All Documents

Always retain copies of the following for your records:

Store these securely for at least one year, just in case any disputes arise.

🧾 5. Confirm That the Buyer Registers the Car

While not always within your control, it’s good practice to encourage the buyer to complete the title and registration process quickly. If they don’t, you may still appear as the registered owner in official records.

📌 If you receive post-sale notices or fines, contact the DMV and provide proof of sale.

📬 6. Notify the IRS (if applicable)

If you sold your car for more than its fair market value and used it for business purposes, you may need to report the sale to the Internal Revenue Service (IRS).

When to Report:

• The car was used for business or self-employment
• You claimed depreciation or mileage deductions
• You sold the car for a profit

💼 Consult a tax professional or visit the IRS website for guidance.

🧰 7. Deactivate Connected Services

Many modern vehicles come with connected features like:

• Remote start or app access (e.g., Tesla, FordPass, OnStar)
• Toll transponders (E-ZPass, TxTag, FasTrak)
• Navigation history or Bluetooth pairings

Before handing over the car:

• Log out of all accounts
• Reset PINs and passwords
• Deactivate remote access systems

This helps protect your privacy and prevents misuse of your data.

📱 8. Delete Personal Information

Don’t forget to remove any personal data stored in the car’s infotainment system, such as:

• Contacts
• Call logs
• GPS history
• Stored Wi-Fi networks
• Apple CarPlay/Android Auto connections

If possible:

• Perform a factory reset
• Remove SD cards or USB devices
• Disable cloud syncing

🧨 9. Handle Any Outstanding Liens

If there was a lien on the car when you sold it, make sure the lender is aware of the sale and that the loan has been paid in full.

You can:

• Request a lien release letter
• Provide it to the buyer for DMV processing
• Ensure the title reflects that the lien is cleared

⚠️ If the lien isn’t released properly, it could delay the buyer’s ability to register the vehicle.

📄 10. File Your Paperwork and Receipts

Organize and store all sale-related documents in a safe place for at least a year :

• Copy of the signed title
• Copy of the bill of sale
• Payment confirmation (bank statements, cashier’s check copy)
• DMV confirmation of sale
• Email correspondence with the buyer

These help protect you in case of disputes or legal questions later.

📞 Frequently Asked Questions (FAQ)

Q: Do I have to notify my insurance company after selling my car?

A: Yes. Failing to cancel or transfer coverage could result in unnecessary charges or confusion.

Q: Can I be held liable after selling my car?

A: Only if you didn’t officially report the sale to the DMV or left the title open.

Q: Should I keep a copy of the bill of sale?

A: Yes. It serves as legal proof of the transaction.

Q: What if the buyer doesn’t register the car?

A: If you reported the sale to the DMV, you should not be held responsible for anything after the sale date.

Q: Can someone steal my identity using the car title?

A: While unlikely, always be cautious about how much personal info you share and verify that the sale is completed legally.

🧾 Final Thoughts: Complete the Process to Protect Yourself

Selling your car is only truly finished once you’ve taken the necessary post-sale steps to protect yourself from future liability, legal issues, and financial surprises.

By:

• Reporting the sale to the DMV
• Canceling insurance and removing plates
• Keeping copies of all paperwork
• Ensuring the buyer completes registration

You’ll close the chapter on your car responsibly and securely.

🔗 Helpful Resources

• NMVTIS.gov – National Motor Vehicle Title Information System
• Carfax Free VIN Check
• Your State DMV Website
• IRS – Reporting the Sale of a Vehicle

If you found this guide helpful, share it with someone preparing to sell their car. Knowing what to do after selling a car with the title is just as important as the sale itself.