Selling a vehicle in Washington can initially seem confusing or overwhelming, especially for first-time sellers. However, the process becomes much more straightforward with a clear understanding of the state's specific regulations.
The Washington Department of Licensing (DOL) oversees the vehicle selling process. This department provides essential guidance and resources for individuals looking to sell their vehicles. It outlines the necessary paperwork, the transfer of ownership process, and other post-sale obligations.
More specifically, vehicle sellers in Washington must provide buyers with an assigned title, comply with the odometer disclosure requirement, and complete a bill of sale. They must also remove the license plates from the vehicle and notify the DOL of the sale.
By following the rules and regulations set by the DOL, sellers can confidently navigate the entire selling process, minimize the risk of future disputes, and secure a smooth and efficient vehicle transaction.
Legal Requirements Before Selling a Vehicle in Washington
Apart from focusing on the vehicle's condition and removing personal items from the car, sellers must fulfill specific legal prerequisites before selling a car in Washington. This includes preparing the vehicle title, obtaining a vehicle history report, conducting a vehicle inspection, and effectively advertising the car.
By meeting these requirements, sellers increase their chances of finding a buyer and establish trust in the transaction. Moreover, adhering to these legal obligations helps sellers avoid any complications during the sale process and mitigate the risk of encountering legal obstacles.
Prepare the Vehicle Title
The vehicle title is a vital document. It establishes the seller as the rightful owner and assures the buyer of clear ownership and the absence of undisclosed liabilities. This document is also required for ownership transfer, and without it, the sale cannot proceed legally. Therefore, it is imperative for sellers in Washington to have the title readily available before they sell a vehicle.
In cases where the title is lost or unavailable, sellers can obtain a replacement title. To do so, they need to follow a straightforward process.
Initially, sellers need to print and complete the Affidavit of Loss/Release of Interest form on white paper and have all registered owners sign it in the presence of a notary public. An additional page should also be included with the desired mailing address for the title.
The completed form can then be submitted in person or mailed at any DOL office, along with the replacement title fee of $33.50. After payment, the replacement title typically arrives by mail within four to six weeks.
For those needing a replacement title instantly, visiting a Quick Title Office is advisable. Individuals can obtain a replacement title at these offices before leaving or receive it by mail immediately. However, a replacement title at a Quick Title Office costs $85.50.
Note that a Quick Title Office cannot provide replacement titles for vehicles reported stolen, destroyed by insurance or wreckers, or vehicles whose title is noted as "WA rebuilt."
Conduct a Vehicle Inspection
It is recommended that sellers allow buyers to conduct a thorough vehicle inspection before selling a vehicle in Washington.
This inspection enables sellers to demonstrate their commitment to prioritizing the vehicle's safety and reliability. It also helps identify and resolve potential issues or safety concerns, instilling greater confidence in the buyer's decision to purchase the car.
Typically, buyers choose a trusted mechanic to carry out the inspection, and it is customary for them to cover the associated expenses. The inspection covers essential components of the vehicle, such as the radio, heater, and air conditioning systems, windshield wipers, lights and turn signals, brakes, tires, and the engine.
Both the buyer and seller should retain a copy of the inspection report for their records, providing a tangible record of the vehicle's condition at the time of sale.
Obtain Vehicle History Report
Apart from conducting a vehicle inspection, it is highly recommended that sellers obtain a vehicle history report (VHR), even though it is not legally required when selling a vehicle in Washington.
A VHR provides a comprehensive overview of the vehicle's past, including crucial information such as accident records, ownership history, title status, odometer readings, and any liens or recalls.
By acquiring a VHR, sellers demonstrate transparency and honesty to potential buyers. It allows them to provide accurate information about the vehicle's history, which builds trust and increases the likelihood of a successful sale. The report also helps sellers avoid potential disputes by revealing any accidents, damages, or significant repairs the vehicle has undergone.
Furthermore, the VHR assists sellers in determining the fair market value of their vehicle. With information about the mileage, ownership history, and any previous issues, sellers can price their vehicle appropriately and maximize their chances of a fair yet profitable transaction.
To obtain a VHR, sellers can turn to the National Motor Vehicle Title Information System (NMVTIS)'s approved third-party data providers. These providers typically check the vehicle identification number (VIN) or license plate number and charge a service fee to generate the comprehensive report.
Advertise the Vehicle
Sellers must advertise their vehicles to find prospective buyers. However, it is crucial to abide by Washington's laws when doing so.
Individuals must adhere to the Revised Code of Washington Section 19.86.020 when advertising a vehicle. This section, which falls under the Washington Consumer Protection Act, strictly prohibits unfair or deceptive acts in trade or commerce.
To ensure compliance with this regulation, sellers must provide accurate and detailed information about the vehicle they are selling. They must include vehicle details such as the make, model, year, mileage, and vehicle condition.
Also, avoiding making exaggerated claims or misrepresenting the vehicle's attributes is essential, as this could potentially mislead prospective buyers.
By adhering to these guidelines, sellers can prioritize honesty and transparency when providing information to potential buyers about their vehicles. They can also avoid legal consequences, such as civil penalties and fines.
Selling a Vehicle with a Lien in Washington
Selling a vehicle with a lien in Washington requires careful navigation of the legal and financial aspects involved. In this situation, the seller must contact the lienholder, typically the auto loan lender, to determine the precise amount needed to settle the loan and facilitate the sale.
Once the exact amount has been determined, the seller has two options: either pay off the loan themselves or find a buyer willing to assume the responsibility of paying off the remaining balance. Whichever route is chosen, it is crucial to settle the lien before proceeding with the sale is vital.
Upon settlement of the lien, the seller will receive a lien release document from the lienholder, often in the form of a Release of Interest. This document serves as proof that the lien has been satisfied, enabling the seller to proceed with the sale of the vehicle.
To complete the sale, the seller must gather the buyer's payment and provide the necessary documentation. This includes transferring the title to the buyer, providing an odometer disclosure, and issuing a bill of sale. Additionally, the seller should remove the license plates from the vehicle and cancel the auto insurance.
Finally, sellers must report the sale to the DOL. This step informs the DOL that the vehicle is no longer in the seller's possession, releasing them from any further liability associated with it.
Motor Vehicle Sales Tax in Washington
Motor vehicle sales tax is an essential consideration for anyone involved in vehicle transactions in Washington.
The sales tax is computed based on the vehicle's selling price. Currently, the state imposes a base sales tax rate of 6.5% on most transactions, augmented by an additional 0.3% vehicle sales tax. This results in a combined motor vehicle sales tax of 6.8%.
In addition to state taxes, local jurisdictions within Washington impose their own sales taxes on vehicle transactions. These local taxes vary depending on the city or county, ranging from 0.5% to 4%, further impacting the total tax burden on vehicle transactions.
For instance, cities like Fife and Puyallup may impose total sales taxes of up to 10.2%, while Tacoma and Olympia residents could face sales tax rates of around 10.4% and 9%, respectively.
Who Pays Sales Tax When Selling a Car Privately in Washington?
When selling a car privately in Washington, the sales tax burden rests on the buyer rather than the seller.
Upon registering the vehicle, the buyer must settle the applicable sales tax. In addition, buyers are accountable for covering registration fees, title fees, service fees, and license plate expenses.
Depending on the county or district where the vehicle will be registered, buyers may also be required to pay Regional Transit Authority Tax and Local Transportation Benefit District Fees.
Sales Tax for Vehicles Sold in Washington to Residents of Another State
According to Washington state regulations, sales tax on vehicles sold to residents of another state may be exempted under certain conditions.
If the vehicle is delivered to a nonresident and will be taken outside the state under a vehicle trip permit issued by the DOL, it is exempt from sales tax. Additionally, if the vehicle is immediately registered and licensed in the buyer's state of residence and will not be used in Washington for more than three months, it is also exempt from sales tax.
However, it is worth noting that if an out-of-state buyer intends to register the vehicle in Washington, it becomes necessary to pay the applicable sales tax along with any other associated registration fees.
Legal Requirements After Selling a Vehicle in Washington
To finalize a vehicle's sale in Washington, the seller and buyer must fulfill numerous legal obligations. These include complying with the odometer disclosure requirement, transferring the vehicle title, completing a bill of sale, removing license plates, canceling vehicle insurance, and notifying the Washington DOL of the sold car.
By following these legal obligations, sellers can complete the transaction legally
and release them from further liability. On the other hand, buyers will be able to register the purchased vehicle in their name seamlessly.
Comply With the Odometer Disclosure Requirement
Complying with the odometer disclosure requirement when selling a vehicle in Washington is not only necessary for a title transfer but also crucial for transparency and fairness in the transaction.
This requirement aims to combat odometer fraud, where a vehicle's mileage reading is manipulated to deceive buyers about its usage and value. By providing an accurate odometer reading, sellers enable buyers to make informed decisions about the condition and worth of the vehicle.
To fulfill the requirement, sellers must appropriately complete the odometer disclosure section in the title document. This includes providing accurate mileage reading, signing, and printing their name. On the other hand, buyers must acknowledge the disclosure by signing and printing their names in the designated buyer's blocks.
In cases where the title document does not have a specific section for odometer disclosure, individuals can obtain an odometer disclosure form. Note that this form cannot be faxed, downloaded, or emailed, as it is printed on special paper. Individuals are advised to visit a DOL office to get this form.
According to regulations, individuals must comply with the odometer disclosure requirement if the vehicle involved in the transaction is a model year 2011 or newer. Conversely, if the car is a model year 2010 or older, individuals are exempt from reporting the odometer miles.
Transfer the Vehicle Title
Transferring the vehicle title is crucial during a vehicle sale in Washington. It facilitates the transfer of ownership and safeguards both the buyer and the seller from potential legal or financial complications.
To transfer the title, it is advisable for both parties to meet at a vehicle licensing office and sign over the title.
If meeting at the licensing office is not possible, choosing a well-lit public area or involving a trusted third party is recommended. In such cases, buyers should obtain a trip permit to legally drive the vehicle after obtaining ownership.
When signing over the title, sellers must sign in two designated areas on the front of the title, while the buyer only needs to sign once. If there are multiple sellers listed on the title separated by "or," only one seller needs to sign for the transfer. However, if the sellers' names are separated by "and" or "and/or," all sellers must sign.
If there are multiple buyers, the same rule applies.
It is of utmost importance that these signatures are notarized. Therefore, it is advised to refrain from signing the title until in the presence of a notary public or a licensing agent at a vehicle licensing office.
Once all the necessary information on the title is correctly filled out, the seller can collect the payment from the buyer and hand the title over, completing the transfer process.
Do Both Parties Need To Be Present To Transfer a Title in Washington?
Since Washington requires the signatures on the title to be notarized, both parties must be at the notary public or DOL office together to finalize the title transfer.
However, if the seller has already notarized the signatures on the title in advance, the buyer can complete the ownership transfer independently. This means that after receiving the notarized title from the seller, the buyer can visit a DOL office alone to finalize the transfer of ownership.
Complete a Bill of Sale
Completing a Bill of Sale (Form TD-420-065) is a crucial step mandated by the DOL after the sale of a vehicle in Washington state. This document includes vital information such as the names and addresses of both the seller and buyer, specific details about the car, such as the VIN, make, model, year, mileage at the time of sale, and the transaction date and sale price.
The Bill of Sale is of significant importance to both parties involved. For buyers, it is essential documentation to transfer the vehicle title into their name. Meanwhile, retaining a copy of the Bill of Sale is equally vital for sellers as it acts as official proof of the transaction and is valuable in resolving any disputes that may arise after the sale.
Remove the License Plates and Cancel the Vehicle Insurance
According to Washington state law, sellers must remove their license plates before handing the vehicle to the buyer. Failure to do so can result in sellers being held responsible for any fees or liabilities incurred by the new owner, such as parking tickets or speed camera violations.
Sellers can transfer these plates to another vehicle they own of a similar type. Alternatively, they can surrender the plates at a local vehicle licensing office. Regardless of the choice, the buyer cannot use the plates once removed from the vehicle.
In addition to removing the license plates, sellers must promptly cancel the vehicle insurance. This step is essential to avoid unnecessary expenses associated with insuring a vehicle that the seller no longer owns.
To cancel the insurance policy, sellers should immediately contact their insurance provider and inform them about the sale of the vehicle. The insurance company will typically provide guidance and assistance throughout the cancellation process to facilitate a seamless transition and avoid any potential overlaps in coverage.
Notify the Washington DOL of the Sold Car
After a vehicle is sold in Washington, sellers must fulfill their legal obligation of notifying the DOL within five days of the sale date.
Fortunately, sellers have multiple options for notifying the DOL of the sold vehicle. They can file online through the online vehicle report of sale platform or License eXpress.
Alternatively, sellers can opt for in-person or mail notification. When choosing this option, sellers must fill out the Vehicle Report of Sale Form and submit it in person or by mail to a vehicle licensing location. Along with the form, a fee of $13.25 must be included to cover the charge for reporting the sale of the vehicle.
Although there is no late fee for delayed notification, sellers may be held accountable for any financial, criminal, or civil issues arising from the vehicle after its sale. To avoid such complications, sellers are advised to complete the notification immediately.