5 Essential Steps to Legally Transfer a Car Title in Michigan

Follow These Key Steps For a Smooth Michigan Car Title Transfer

Selling a car in Michigan involves more than just exchanging money and handing over the keys. If the title transfer isn’t completed properly, you could face legal consequences, unpaid fines, or even liability for accidents involving the vehicle after the sale. Whether you’re selling a used car to a private buyer or purchasing one yourself, understanding Michigan’s vehicle title transfer process is crucial.

To make the process easier, we’ve broken it down into five simple steps. Follow these to ensure a legally sound, hassle-free transaction.

Step 1: Ensure You Have a Clean Title

Before listing your car for sale, confirm that you have a clean, lien-free title in your name. A lien means that a lender, such as a bank or financing company, has a legal claim to the vehicle. If you still owe money on the car, you must pay off the loan and obtain a lien release from your lender before transferring the title.

If your title is lost or damaged, you can request a duplicate from the Michigan Secretary of State (SOS) office before proceeding with the sale. Selling a car without a proper title can delay the transaction and complicate the transfer process.

Step 2: Complete the Title Certificate Properly

Once you’ve found a buyer, it’s time to complete the title transfer paperwork. The Michigan vehicle title must be filled out correctly by both the seller and the buyer. Here’s what the seller needs to do:

• Fill out the seller’s section on the title, including the vehicle's mileage (odometer reading) if applicable.

• Sign and date the title in the designated areas.

• Provide the buyer with a bill of sale. While not legally required in Michigan, a bill of sale serves as a valuable record of the transaction.

The buyer should review the title information carefully to ensure accuracy before signing their portion of the document. Any mistakes can delay the title transfer at the SOS office.

Step 3: Remove Your License Plate

Michigan law requires that the seller keeps their license plate when selling a vehicle. Plates do not transfer to the new owner. Before the buyer takes possession of the car, remove your license plate and retain it for use on another vehicle or return it to the SOS office if necessary.

The buyer must purchase a new license plate and registration before legally driving the vehicle. If they plan to drive the car immediately after purchase, they should obtain a temporary tag from the SOS office.

Step 4: Report the Sale to the Michigan Secretary of State (SOS)

To protect yourself from future liability, it’s important to notify the Michigan SOS that you’ve sold your vehicle. This prevents any potential issues such as unpaid parking tickets, toll violations, or accidents linked to the vehicle under your name.

You can report the sale by submitting a Release of Ownership form, which can be done online or in person at a Michigan SOS office. Be sure to keep a copy of the completed and signed title transfer for your records.

Step 5: Buyer Registers the Vehicle and Finalizes the Transfer

The buyer is responsible for finalizing the title transfer and registering the vehicle in their name. Within 15 days of purchase, the buyer must:

• Take the signed title to a Michigan SOS office.

• Pay the necessary title transfer fee and sales tax based on the purchase price.

• Obtain new plates and registration before legally operating the vehicle.

The title transfer fee in Michigan varies, and sales tax is typically 6% of the vehicle’s selling price. If the buyer fails to complete the transfer within 15 days, they may face late fees and penalties.

Why This Matters

Failing to properly transfer the title can result in serious consequences. If the buyer does not register the vehicle in their name, you could still be legally responsible for any incidents involving the car. Unpaid fines, tickets, or accidents could all trace back to you as the previous owner. To avoid these risks, always follow the necessary title transfer steps and keep documentation of the sale.

Final Thoughts

Selling a vehicle in Michigan doesn’t have to be complicated, but following the right steps ensures a smooth and legal transfer. By making sure you have a clear title, properly completing the paperwork, removing your license plate, reporting the sale, and ensuring the buyer registers the vehicle, you’ll avoid unnecessary headaches and protect yourself from future liability.

Have questions about auto insurance after selling or buying a car? Contact MS2 Agency LLC today for personalized coverage and peace of mind!

Sources:

• Michigan Secretary of State (SOS): https://www.michigan.gov/sos

• Michigan Title Transfer Guide: https://www.michigan.gov/titles

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