Navigating Car Sales by Owner in New Jersey: A Comprehensive Guide

Buying or selling a car privately in New Jersey, often referred to as a “Car For Sale By Owner” transaction, can be a straightforward process when you understand the necessary steps for legally transferring vehicle ownership. This guide provides a detailed overview to ensure a smooth and compliant transaction, whether you are the buyer or the seller. Remember, unlike some transactions, transferring a vehicle title requires an in-person visit to a New Jersey Motor Vehicle Commission (MVC) agency. Mail-in transfers are not permitted. Following these guidelines carefully will help you avoid penalties and ensure all documentation is correctly handled.

For Sellers of Cars by Owner

If you’re selling your vehicle privately, it’s crucial to complete specific actions to legally relinquish ownership and avoid future liabilities. Here’s what you need to do:

Plate Removal and Surrender

• Remove Your License Plates: As the seller, you must remove the license plates from the vehicle immediately upon sale. These plates are registered to you, not the vehicle itself.

• Surrender Plates to the MVC: Unless you are transferring these plates to a newly purchased vehicle registered under your name (which is permissible, but not to the new buyer of your old car), you must surrender them to a Motor Vehicle Agency. This officially disconnects your plates from the sold vehicle. Find your nearest agency here. More information on plate surrender can be found here.

Title Transfer and Bill of Sale

• Sign the Title: Locate the seller’s section on the reverse side of the vehicle title. Carefully sign and complete this section. This signature is your official release of ownership.
• Provide the Title to the Buyer: Hand over the signed title to the buyer. This document is essential for them to register and title the vehicle in their name.
• Create a Bill of Sale: In addition to the title, you must provide the buyer with a bill of sale. This document formalizes the sale and includes vital information for both parties. The bill of sale must include the following:
  • Buyer’s Full Name and Address: Accurate details of the purchaser.
  • Date of Sale: The exact date the vehicle was sold.
  • Mileage Odometer Reading: Record the odometer reading at the time of sale. This is a legal requirement, and further details on odometer readings are provided below.
  • Sale Price: The agreed-upon selling price of the vehicle.

Alt text: Exterior view of a New Jersey Motor Vehicle Commission Vehicle Center, emphasizing the building’s signage and entrance, relevant to vehicle services.

For Buyers Purchasing a Car by Owner

As a buyer in a “car for sale by owner” transaction, you have responsibilities to ensure you legally own and can operate your newly acquired vehicle. Here are the necessary steps:

Title and Registration

• Sign the Title: Upon receiving the title from the seller, locate the buyer’s section on the reverse side. Sign and complete this section, including your driver’s license or Entity Identification Number (EIN) if applicable. For businesses, an EIN (formerly CorpCode) is required. You can find information about obtaining an EIN here.

• Visit a Motor Vehicle Agency: You must visit an MVC agency in person to complete the title transfer. This cannot be done by mail. Locate an agency here.

• Complete Vehicle Registration Application: At the agency, you will need to complete the Vehicle Registration Application (Form BA-49), if applicable. This form is necessary to register the vehicle in your name and obtain New Jersey license plates.

• Receive License Plates: After processing your application and payment of fees, you will receive your New Jersey license plates.

• Required Documents: Ensure you bring all necessary documents to the MVC agency. The requirements vary slightly depending on where the vehicle was previously titled:

  • Pre-owned in New Jersey
  • Pre-owned in another state that issues titles
  • Pre-owned in a state that does not issue titles
  • Pre-owned and purchased at an auction

Time-Sensitive Title Transfer

• 10-Day Transfer Rule: In New Jersey, titles, especially those from New Jersey or dealer reassigned titles, must be transferred within 10 working days from the date of sale to avoid a $25 penalty. Ensure you act promptly to complete the title transfer process after purchasing your car for sale by owner.

Power of Attorney for Title Transfer

In some situations, you may need to present a Power of Attorney (POA) when transferring a title. This is relevant if you are signing title or registration applications on behalf of someone else in a non-dealer transaction.

When You Need a POA

• Signing on Behalf of Someone: If you are signing paperwork for a title or registration change for someone else, you must present a valid Power of Attorney. This applies if you will be signing on their behalf.

POA Requirements

• Types of POA Accepted: The MVC accepts General, Durable, or Limited Power of Attorney documents.
• Notarization is Mandatory: The POA must be notarized to be valid.
• Required Information: The POA document must include:
  • Appointee/Attorney-in-Fact’s Information: Name and address of the person authorized to act.
  • Principal’s Information: Name, address, and signature of the person granting the power of attorney.
  • Scope of Powers Granted: Clearly specify the powers being granted.
  • Vehicle Specifics (for Limited POA): Limited POAs must reference the specific vehicle, including Year, Make, VIN, and the type of transaction authorized.
• Business POAs: POAs issued by a business must be on official company letterhead.
• ID Requirement: Anyone presenting a POA must also present their own valid ID or driver’s license.

Letter of Authorization as an Alternative to POA

• Paperwork Already Signed: If you are representing someone else in a non-dealer title or registration change, but all the necessary paperwork has already been signed by that person, you may use a General Letter of Authorization LOA-1.pdf (state.nj.us) instead of a POA.

Transfer of Title Upon Death of Owner

Dealing with vehicle ownership after the death of the owner requires specific procedures. All necessary documents must be presented at an MVC Vehicle Center, and it is advisable to schedule an appointment beforehand.

Title in Spouses’ or Domestic Partners’ Names

• Surviving Owner: If the title is in both names, the surviving owner can transfer the title.
• Required Documents:
  • Current title, properly signed and completed by the surviving owner.
  • A copy of the death certificate.
  • A notarized Affidavit (Form BA-62).
• Fees: A $60 title fee applies. The existing registration can be transferred to an immediate family member for an additional $4.50.

Transfer to Estate or Individual (Owner Died with a Will, No Co-owner)

• Estate EIN (if applicable): If the title is being transferred to the name of the estate, you will need to apply for an Entity Identification Number (EIN – formerly CorpCode). If the title is going directly to an individual, an EIN is not needed.
• Required Documents:
  • EIN (if applicable).
  • Old title, signed and completed by the executor.
  • Surrogate’s Short Certificate.
  • Your driver’s license for identification.
• Fees: Pay the $60 title fee ($85 for financed vehicle titles).
• Registration and Insurance: If the vehicle will be operated, a new registration and proof of New Jersey insurance in the estate’s name are required. The existing registration can be transferred to an immediate family member for $4.50.

Owner Died Without a Will (No Co-owner)

• Surviving Spouse/Partner, Estate Under $50,000:

  • Documents: Current title and an Affidavit of Surviving Spouse/Domestic Partner/Civil Union Partner. This affidavit must have the raised seal of the County Surrogate where the deceased resided. The title should be signed and completed by the surviving spouse/partner.

• Heirs, No Surviving Spouse/Partner, Estate Under $20,000:

  • Documents: Current title and an Affidavit of Next of Kin. This affidavit also needs the raised seal of the County Surrogate. The title must be signed and completed by the Next of Kin.

• Estate Exceeds Above Amounts:

  • Documents: Current title properly assigned and executed by the Administrator of the estate, along with an Administrator’s Short Certificate. The Short Certificate must have the raised seal of the County Surrogate.

Alt text: Image of the New Jersey Vehicle Registration Application form (Form BA-49) in PDF format, highlighting its importance for car for sale by owner transactions in New Jersey.

Other Important Information for Private Car Sales

Odometer Reading Accuracy

• Legal Requirement: Providing an accurate odometer reading at the time of sale is legally required. This reading indicates if the vehicle has exceeded its mechanical limitations.
• Inaccurate Readings: If the odometer reading is inaccurate, the seller must provide a written estimate of the actual mileage.
• Universal Title Application: You can download a copy of the Universal Title Application which includes sections for odometer disclosure.

Liens on Titles

• Lien Payoff: If there is a lien noted on the deceased’s title, it generally must be paid off before a new title can be issued.
• Lien Transfer Exception: The lien can be transferred to the sole owner in some cases. Contact the lending institution for specific details and procedures.

Sales Tax Considerations

• Sales Tax Applicability: Sales tax generally applies to vehicle sales.
• Gift Exemption: A vehicle sale is exempt from sales tax if it is indicated as a gift on the purchase price line on the reverse side of the title. More information on vehicle sales tax exemptions is available.

Payment Methods at MVC

• Accepted Payment Forms: The MVC accepts various payment methods, including American Express®, Visa® card, MasterCard®, Discover card®, check, money order, or cash.

Related Resources for Vehicle Transactions

For further assistance with vehicle-related matters, refer to these related links:

• Certified title search (request a copy)
• Title correction
• Duplicate title (lost, stolen, or damaged)
• Canceling a new car title
• Satisfying a lien
• Vehicle registration application records
• Registration renewal/request duplicate
• Vehicles purchased without an existing New Jersey title (Improper Evidence of Ownership Procedure)
• Universal Title Application

By understanding and following these guidelines, both buyers and sellers involved in “car for sale by owner” transactions in New Jersey can navigate the process efficiently and legally, ensuring a successful transfer of vehicle ownership.