The Guide to Transferring A Car Title in Texas: How To Do It

Transferring a car title in Texas is a fairly simple process, but it’s an essential legal step you need to take. Transferring the car title ensures that the new car owner is legally tied to the car.

While it’s mostly straightforward, there are some factors like outstanding liens or inherited vehicles that can make it more complex. Read on to learn everything you need to know about how to transfer a car title. 

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How to Transfer a Car Title in Texas

Transferring a car title in Texas involves a few key steps, whether you’re buying or selling a vehicle. If you’re the seller, it’s important that you transfer the car title to the new owner so you’re not held responsible for parking tickets, toll violations, and crimes committed with the vehicle. If you’re the buyer, having the car title in your name proves that you’re the owner. 

Here’s a quick step-by-step guide for transferring a car title in Texas:

For the seller:

• First, you’ll need to complete the title by signing the back, writing the date of sale, and the odometer reading. 
• While not necessary, you may want to provide a bill of sale to protect you and the seller. The bill of sale should include the sale price, vehicle information, like make, model, and VIN, and both the buyer’s and seller’s information. 
• Once you provide both the signed title and bill of sale to the new owner, you should submit a vehicle transfer notification. The buyer is responsible for submitting the title transfer, but this form protects you in case they don’t follow through. You can submit it online via the TxDMV website. 

For the buyer:

• Receive the signed title. Make sure the seller has signed the title and included the odometer reading. You may also want to check that the title doesn’t have any liens against it. You can use Title Check to discover any pertinent title information. 
• Complete an Application for Texas Title and/or Registration. You can fill it out online and print it or get a copy from the county tax assessor-collector’s office. The TxDMV suggests having the seller come with you to the county tax collector’s office to make sure there aren’t any issues with the transfer.
• Pay the fees, including a title transfer fee, registration fee, and possible sales tax. Make sure you submit the car transfer within 30 days of purchase. 

When Can You Transfer a Car Title in Texas?

You can transfer a car title in Texas under several circumstances, including: 

• Sale of a vehicle: Whether a private sale or one through a dealership, the title of the car must be transferred to the new owner. 
• Gifting a vehicle: If you’re giving the vehicle as a gift to a family member or other individual, you must transfer the title to the recipient. 
• Inheritance: If someone passes away and you inherit their vehicle, you must transfer the title to your name. The process can vary depending on whether the estate must go through probate.  
• Paying off a loan: When you pay off the loan for your vehicle, the lienholder must release their claim on the title. At this point, you can update the title to show that you are the full owner. 
• Moving to Texas: If you move to Texas and bring your out-of-state vehicle, you’ll need to transfer the title to Texas. 
• Correcting a title: If you receive the title and find there’s a mistake or incorrect information on the title, you can apply for a corrected title, usually without paying any fees. 

When You’re Not Allowed to Transfer a Car Title

There are certain situations where transferring a car title in Texas is not allowed, including:

• Unpaid loan: When a vehicle has an outstanding loan, the lienholder has a claim on the title. In order to transfer the title, the lienholder must first release their claim. 
• Missing or lost title: If the title document is missing or lost, the owner must apply for a duplicate title before the transfer can occur. 
• Incomplete or incorrect information: If the information on the title is incorrect or incomplete, the transfer will be paused until the errors are fixed. 
• Title dispute: If there is a legal dispute over ownership, such as in a divorce or estate issue, the transfer may be blocked until resolved. 
• Title with salvage or junk designation: If a vehicle has been designated as “salvage” or “junk,” it may not be legally eligible for a transfer. Salvage titles can sometimes be transferred, but the vehicle has to be repaired, pass an inspection, and converted to a “rebuilt” title first. 

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Associated Fees

When transferring a car title in Texas, only the new owner has to pay any fees. These include: 

• Title fee: The amount varies based on the county you’re in, but is usually between $28 and $33. 
• Sales tax: 6.25% of the sale price or standard presumptive value (whichever is higher).
• Registration fees: The amount varies based on the country, but it usually starts at $51.75.

Special Exceptions

• Divorce: If you’ve been awarded a vehicle in a divorce, you’ll need to bring the divorce decree with you to the county tax office to apply for a title transfer. However, if the car isn’t part of the decree, your spouse will need to sign the title over to you. 
• Death of a Spouse: In the death of a spouse, if the car is part of the will, it will need to go through probate court first. However, if your spouse didn’t have a will, you’ll need to fill out an Affidavit of Heirship for a Motor Vehicle. 
• Gifts: When transferring a car title in Texas as a gift to close relatives like parents, children, or spouses, the recipient won’t need to pay a sales tax. Instead, they’ll pay a $10 gift tax. Before the title can be transferred, you will need to fill out a Gift Affidavit form. 

Trading in Your Car

When you buy from or trade in your car to a dealership in Texas, the dealership handles the car title transfer process for you. If you’re trading in your car, you simply sign the title over to the dealership, and they handle the rest. The dealership will take care of:

• Signing and transferring the title to the new owner. 
• Ensuring any liens are cleared if there’s an outstanding loan.
• Processing the title for the new vehicle you purchase or lease. 

However, it’s important to note that dealerships are not required by law to transfer the title to the dealership. This means it could be months before they transfer from your name to the new owner. If you trade in your car, you’ll want to fill out a Vehicle Transfer Notification to protect yourself from liability. 

Pros and Cons of Trading in Your Car

Trading in your car at a dealership comes with several benefits, but it also has a few downsides. Here’s a look at the pros and cons of trading in your car:

Pros:

• Convenience: The dealership handles all the paperwork, including the title transfer. 
• Immediate transaction: The trade-in process is quick. You can usually use the trade-in value as a down payment on a new car in the same visit. 
• No need to find a buyer: Selling a car privately can take time, but when you trade it in, you won’t have to go through all the work of finding a buyer. 
• Sales tax savings: In Texas, when you trade in a car, you only pay sales tax on the difference between the trade-in value and the price of the new vehicle. This can result in major savings on sales tax. 

Cons:

• Lower offer than private: Dealerships usually offer less for your trade-in than you might get in a private sale. However, the benefits of trading your car in are usually worth it. 
• Dependent on new purchase: Many times, the trade-in process depends on you purchasing a new or used vehicle from the dealership. 
• Limited negotiable power: While you can negotiate the trade-in value, dealerships don’t have as much room to offer a higher value to you. 

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Find Your Next Car with Tipton Ford

Transferring a car title in Texas isn’t complicated, but it’s an important step to take that will protect you from liability and prove your ownership of a car. When you trade in your current vehicle, Tipton Ford will handle the whole process for you. 

Whether you’re looking to trade in your current vehicle or simply need another, your next car is waiting for you at Tipton Ford. We’ve been serving the community of Brownsville, Texas since 1959. Come check us out today. With our large collection of new and used Fords, we’re sure to have what you need! Or if you need custom truck accessories, window tinting, or custom tires, we can help! We’re located in Brownsville but we serve the entire state, including McAllen, Weslaco, Harlingen, San Antonio, Austin, Houston, and Dallas. We have a huge selection of F-150s, Expeditions, Broncos, and more for you to choose from.  

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