Trading in your ride puts significant cash in your pocket. Whether you are trading it in at a dealership or selling it on Craigslist, you need to complete the paperwork before the deal is finalized. Buying a car with a spouse or partner is a big responsibility, and you document your ownership of the vehicle by signing the title. Your ability to sell the car without the co-owner on the title depends entirely on how the car title is signed.
It’s All In the Writing
All car titles must be signed by the owners listed on the title in order to be registered with the state. The exact process for registration varies by state. Almost all states use the “and/or” rules when it comes to co-owners on car titles. If the co-owners names are joined with “and” then both parties must be present to sell the car. Titles using “or” between the co-owners’ names either party can sell the car without the other party present. Check with your state to make sure you follow all applicable state laws.
Removing a Co-Owner
In anticipation of selling the car, you may remove a co-owner by filing the necessary paperwork with the state Department of Motor Vehicles. Your co-owner can sign over his ownership in the vehicle before the sale date to eliminate hassles during the sale. Some states require that the owner sign in the presence of a notary. The title must be resubmitted to the state and a new title issued in your name only. Keep in mind it takes time for this process to be completed. According to the Texas Department of Motor Vehicles, it could take up to 20 business days to process a title application.
When we lose a loved one, we have to deal with processing their property. Inheriting a car comes with a unique set of challenges. If you owned a vehicle with someone who died and the title shows the “AND” statement, you must remove the name from the title in order to sell the vehicle. You must provide a copy of the death certificate and re-register the title with the state. Only with a clean title in hand -- in your name only -- can you sell the car.
When buying a car, make sure the car title is legally signed by both co-owners in accordance with your state law and is able to be registered with the state before signing over payment. If you buy a car when the ownership is in conflict, you could be forced into civil court to get your money back. In addition, make sure the previous owner has filed the appropriate lien release with the state. Cars with a lien are not able to be registered to new owners until the loan attached to the vehicle is paid off.
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