Selling a car to a private buyer or individual can be confusing, especially for those selling a vehicle for the first time. Navigating state and county guidelines during the process can be complex, requiring even experienced sellers to understand their state's unique rules.
Each state has its set of rules and regulations that govern the sale of vehicles, and Ohio is no exception. Therefore, sellers in Ohio need to understand and comply with specific guidelines, such as Rule 109:4-3-16, to ensure a successful and legally compliant transaction.
By familiarizing themselves with the state's legal requirements before and after selling a vehicle, such as performing emissions testing and signing an odometer disclosure statement, sellers can confidently navigate the selling process and avoid potential pitfalls.
Legal Requirements Before Selling a Vehicle in Ohio
Before successfully selling a car, aside from repairing any damages, it's crucial to fulfill the legal requirements set primarily by the Ohio Bureau of Motor Vehicles (BMV).
In Ohio, here are the legal requirements and actions to consider before selling a vehicle:
Emissions Testing
Certain counties in Ohio, such as Cuyahoga, Lake, Geauga, Lorain, Portage, Medina, and Summit, have regulations that mandate vehicle emissions testing before they can be legally sold or registered. However, note that cars older than 25 years are exempt from this requirement.
While emissions testing may not be mandatory in all other Ohio counties, it is still advisable to consider having the test performed. This is because potential buyers from counties where testing is compulsory may prefer vehicles that have successfully passed the test.
Duplicating a Title
In Ohio, ensuring the legality of a vehicle sale requires the seller to transfer the title to the buyer. However, obtaining a duplicate title is necessary before proceeding with the sale if the title is lost or misplaced.
There are two options to obtain a duplicate title: in person or through the mail.
For an in-person application, sellers must visit any Ohio County Clerk of Courts Title Office, bring a valid photo ID and payment for the title fees, and the duplicate title will be printed on the spot.
Alternatively, they can opt for a mail application by submitting a completed Application(s) for Certificate of Title to a Motor Vehicle form, paying the title fees, and enclosing a self-addressed, stamped envelope to their County Clerk of Courts Title Office.
If sellers or owners need their title number, they can use the vehicle identification number (VIN) search tool on the Ohio BMV website to locate it by entering their VIN.
For payment options, contacting the County Clerk of Courts Title Office is advisable.
Having a Paper Copy of the Title
If a seller possesses an electronically maintained title and prefers a paper copy, they can request a printed version to ensure a seamless transfer of title ownership to the buyer.
To obtain a paper copy of an electronically maintained title, sellers must apply for a replacement title. The process for obtaining a paper copy of the title or applying for a replacement title is the same as duplicating a title. Sellers can obtain the paper copy in person by visiting a County Clerk of Courts Title Office or through the mail.
Advertising the Vehicle
When sellers in Ohio advertise a vehicle for sale, they need to be aware of the specific applicable regulations.
In Ohio, the advertised price should accurately reflect the actual purchase price minus specific fees such as registration, licensing, title, taxes, and document fees. Any additional costs must be included in the advertised price to ensure transparency and compliance.
To gain a deeper understanding of the regulations surrounding the advertising of motor vehicles in Ohio, sellers can refer to the Advertising Guidelines provided by the Ohio Attorney General.
Getting a Vehicle History Report
When selling a vehicle in Ohio, obtaining a vehicle history report is highly recommended. A vehicle history report provides valuable information about the vehicle's past, including any accidents, title transfers, mileage discrepancies, or other vital details.
Getting a vehicle history report allows sellers to provide transparency and build trust with potential buyers. It demonstrates that the seller is willing to disclose accurate and reliable information about the vehicle's history, which can help the buyer make an informed decision.
In Ohio, aside from third-party or private sources, sellers can obtain vehicle history reports through the Ohio BMW Online Services. To obtain a vehicle history report, sellers must typically provide the VIN and contact information and pay the applicable fees.
Selling a Vehicle with a Lien in Ohio
When selling a vehicle with a lien in Ohio, there are essential steps to follow to ensure a smooth transaction.
If the car has an outstanding loan, the seller must first pay off the remaining balance to remove the lien from the title. Alternatively, the seller can have the buyer pay the lien holder directly, but this option typically works best when selling to a friend or family member.
Once the loan is paid off, the lender will release the lien manually or electronically.
If the lender joins Ohio's Electronic Lien and Title Program, they will release the lien electronically, removing it from the vehicle's BMV records. The seller must then apply for a paper title at the County Clerk of Courts Title Office and pay the associated fees. Once all requirements are satisfied, a new paper title will be issued.
If the lender does not participate in the Electronic Lien and Title Program, they will mark the lien as discharged and mail the paper title to the seller. To remove the lien from the BMV records, the seller must take the title to any County Clerk of Courts Title Office.
Motor Vehicle Sales Tax in Ohio
Motor vehicle sales tax is an important consideration for buyers and sellers. The sales tax rate in Ohio is 5.75%, but the total tax rate can differ based on local municipalities and can be as high as 8%.
The Ohio Department of Taxation regularly audits title transfers and exemption claims on motor vehicles and other equipment to ensure that the sales tax liability has been adequately satisfied.
In Ohio, all motor vehicle sales are generally subject to sales or use tax unless an exemption applies.
Vehicles primarily used to produce agricultural products for sale may qualify for an exemption. Similarly, a motor vehicle used mainly for transporting tangible personal property for others may also be eligible for an exemption.
In addition, purchases of motor vehicles by churches and nonprofit charitable organizations may be exempt if the vehicle is purchased and titled in the organization's name.
Lastly, vehicles primarily used for taxable transportation services, such as charter services or taxicabs, may qualify for exemptions.
Who Pays Sales Tax When Selling a Car Privately in Ohio?
When selling a car privately in Ohio, the responsibility for sales tax lies with the purchaser.
If the seller opts to sell their vehicle to a car dealer, similar to the process of buying from one, all taxes and title fees will be handled by the dealer.
If the seller chooses to sell the car to another individual, they must transfer the vehicle into the buyer's name at the local county title office. In this case, the purchaser is responsible for paying the applicable taxes, which are determined based on the agreed-upon purchase price.
To ensure clarity and record-keeping, it is advisable for the seller and the buyer to create a purchase agreement that each party can retain for their records.
Sales Tax for Vehicles Sold in Ohio to Residents of Another State
Currently, motor vehicle dealers in Ohio are only obligated to collect sales tax on vehicle sales to non-residents who will remove the vehicle to the following states:
- Arizona
- California
- Florida
- Indiana
- Massachusetts
- Michigan
- South Carolina
To determine the sales tax rates that purchasers from the seven states mentioned above must pay, check this information release from the Ohio Department of Taxation.
If the purchaser intends to remove the vehicle to any state other than the aforementioned seven, Ohio sales tax does not apply.
To ensure compliance, the purchaser from another state must complete Form STEC-NR, an affidavit that must be filed with the Clerk of Courts during the application for title process.
The affidavit requires information such as the date of sale, the trade-in amount, and the sales tax collected (if any).
Legal Requirements After Selling a Vehicle in Ohio
During or after a vehicle sale in Ohio, sellers and buyers have certain legal obligations to fulfill. From odometer disclosure statements to notifying the Ohio BMV about the sale of the vehicle, these legal requirements can ensure a smooth and compliant vehicle transaction in Ohio.
Odometer Disclosure Requirements
Once a buyer has been found, the seller and buyer must complete the Odometer Disclosure Statement form. This form is essential as it is an official record of the vehicle's mileage at the time of sale.
By completing the statement, both parties acknowledge and agree upon the recorded mileage. This document proves the agreed-upon figure and ensures transparency and accuracy in the vehicle transaction process.
Transferring the Title to the New Owner
When transferring the title to the new owner in Ohio, the seller must complete the "assignment of ownership" section on the back of the title and have their signature(s) notarized. This completed title is then presented to the buyer to finalize the transfer.
If the title is held electronically, Ohio allows the use of the Ownership Assignment and Title Application for Casual Sale form. This form serves the same purpose as the back of a physical title and can be used to assign ownership to an Ohio resident.
In certain cases, such as when using a power of attorney or if the seller is a minor, additional forms are required. The original Power of Attorney for a Certificate of Title form is needed for power of attorney situations, while the Minor Consent form is necessary if the seller is a minor.
Note that the Social Security numbers of all parties involved are necessary for the title transfer process. Additionally, when transferring a title in Ohio, photocopies of the title are not accepted. Only the original title should be presented for the transfer. It is essential to complete the title transfer within 30 days of the sale to avoid a late fee.
Do Both Parties Need To Be Present To Transfer a Title in Ohio?
In Ohio, when transferring a title with dual ownership, both parties are generally required to be present. However, there is an exception if a notarized power of attorney is provided. If one party cannot be physically present during the title transfer, they can appoint someone with a notarized power of attorney to represent them.
Removing the License Plates and Cancelling Insurance
Removing the license plates and canceling car insurance are crucial final steps when selling a car in Ohio. Removing the license plates from the vehicle after the sale is essential to avoid any confusion and legal liability.
Ohio law mandates that sellers return license plates to the local Ohio BMV office unless they transfer them to a new vehicle.
To complete the sale process, sellers must fill out a Customer Request to Cancel Vehicle Registration form and submit it, along with the license plates, to a local Ohio BMV office or the state BMV.
After canceling the vehicle registration, sellers should visit their insurance provider to cancel the insurance policy on the sold vehicle. It is not possible to transfer a car insurance policy from one owner to another. By canceling the registration and insurance, sellers can alleviate themselves of any future obligations related to the vehicle.
How To Notify the Ohio BMV of the Sold Car?
When notifying the Ohio BMV of a sold car, there is generally no requirement for a bill of sale. The Ohio BMV does not provide a specific template for completing a bill of sale, although it may be necessary in certain situations, such as when selling a vehicle out-of-state or for export purposes.
Having a bill of sale can also serve as proof of sale for tax purposes, act as a receipt for personal records, and provide protection against potential legal issues in the future.
When creating a bill of sale, critical information typically includes a detailed description of the vehicle, including the VIN, the names of the buyer and seller, the final sale price, and the county and state where the car was sold.
While not mandatory in Ohio, a bill of sale can provide documentation and peace of mind for both the seller and buyer in the event of any future disputes or inquiries.