Selling a vehicle is governed by specific state regulations designed to protect buyers and sellers. In Virginia, individuals must understand and comply with the rules set forth by the state.
As the overseeing agency, the Virginia Department of Motor Vehicles (VA DMV) administers and enforces the legal provisions related to motor vehicle titles and registrations. This office makes sure that all vehicle sales transactions adhere to the established legal framework and applicable state laws and regulations.
Additionally, sellers must comply with the Code of Virginia Section 46.2-1529 to provide buyers with security. According to this state law, dealers must maintain records in their original form or electronic formats for five years for convenient and systematic retrieval.
Legal Requirements Before Selling a Vehicle in Virginia
In the Commonwealth of Virginia, sellers must fulfill a series of legal mandates before selling a vehicle. These mandates are designed to facilitate a transaction compliant with state regulations. The seller is tasked with establishing a flawless transfer of ownership and delivering all required documents to the buyer.
The process of preparing for the transaction includes:
Duplicating the Title
In Virginia, vehicle owners are sometimes required to secure a duplicate title, especially when there is a change in ownership. The process begins by verifying if the title is eligible for duplication.
To qualify, the requester must be the registered owner, and the vehicle must be titled in the state. If the car is under a lien, the lienholder is responsible for applying for the duplicate title.
To obtain a duplicate title, the vehicle seller must fill out the Application for Replacement and Substitute Titles (VSA 67) and make sure that all owners get to sign. Additionally, the seller must pay the $15 substitute title fee upon submitting the VSA 67 to the nearest VA DMV customer service center.
Getting a Vehicle History Report
Vehicle history reports offer comprehensive details about an automobile's past, including information on any prior accidents, damage sustained, or significant repairs performed. By offering this report to potential buyers, a seller can demonstrate transparency and honesty, which builds trust and confidence in the transaction.
To obtain a vehicle history report in Virginia, the seller must prepare a written request containing specific details about the vehicle, such as the make, model year, title number, and Vehicle Identification Number (VIN). This information can typically be found on the certificate of title and vehicle registration card.
Once the request is prepared, the seller must mail it to the following address:
Department of Motor Vehicles
P.O. Box 27412
Richmond, VA 23269
Attention: Vehicle Records Work Center
The seller must include payment for the applicable fees in the form of checks along with the request. The initial cost for an official document is $8, with an additional $3 charge for each subsequent document requested.
Emission Inspection Requirements
In Virginia, sellers must ensure compliance with emission inspection requirements if the vehicle is garaged in certain designated counties before selling a motor vehicle. These localities include:
- Fairfax
- Arlington
- Prince William
- Loudoun
And the cities of:
- Manassas Park
- Alexandria
- Fairfax
- Manassas
- Falls Church
The emission inspection is valid for two years and can be obtained by driving through an on-road emissions testing site or visiting a certified emissions inspection station. To learn more about the emissions testing site available, visit the rapidpass.org website.
All diesel-powered vehicles manufactured in 1997 or later and gasoline-powered vehicles less than 25 years old are subject to the emission inspection requirement.
If the vehicle has a current valid emissions certificate from another state, performed within the last 12 months, it can be titled and registered in Virginia without undergoing a new emissions inspection.
However, VA DMV will not register or re-register any vehicle subject to an emissions inspection until it has passed the inspection or has been issued an emissions inspection waiver.
Advertising the Vehicle
In Virginia, a seller advertises a vehicle for sale to reach potential buyers and communicate the details and condition of the vehicle.
Sellers typically craft vehicle advertisements to feature the vehicle's make, model, year, and distance covered as indicated by the odometer. They also include multiple images to give potential buyers a comprehensive view of the vehicle's condition.
Specific regulations govern the advertisement, display, sale, or offer for sale of used motor vehicles. According to state laws, an individual must lawfully hold the title to a used vehicle in their name, as outlined in the Virginia Code Chapter 6 Section 46.2-600, before selling, displaying, advertising, or offering the car for sale. This requirement is subject to exceptions permitted under the Code of Virginia Section 46.2-631.
However, this limitation does not apply in two situations:
- If the person offering the used vehicle for sale is a licensed motor vehicle dealer
- If the individual has the specific legal authority to advertise, display, sell, or offer the used motor vehicle for sale
Selling a Vehicle with a Lien in Virginia
When selling a motor vehicle in the state, there are instances where the car has an existing lien. In such cases, the seller must take additional steps.
Request a Lien Release
Before proceeding with the sale of a vehicle with a lien, the seller must pay off the vehicle loan and contact the lender or lienholder to obtain a lien release. The process varies based on the lender's participation in the state's Electronic Lien Program.
If the lender participates in the program, they can release the lien with the VA DMV electronically and mail a new title to the address on the record.
However, if the lender does not take part in the Electronic Lien Program, they must indicate on the title that the lien has been satisfied and eventually mail it to the seller. In this case, the lien will not be automatically removed from the records of VA DMV.
To remove the lien from the VA DMV's records, the seller must bring the title to any VA DMV customer service center and apply for an alternative title. A fee of $15 is required, and the office will issue a new title with the notation "Lien Satisfied," along with the corresponding date.
Request a Transfer of Certificate of Title With Lien
If the buyer intends to take over the lien on the vehicle, the seller must request a Transfer of the Certificate of Title with Lien (Form SUT 4) from the lienholder.
Completing the Transaction
Once the necessary lien-related documentation is obtained, the seller must:
- Sign over the vehicle title to the buyer, which indicates the change of ownership
- Provide the lien release documentation, along with the title, to the buyer
Sales and Use Tax of Motor Vehicles in Virginia
When a vehicle's ownership changes during titling, the VA DMV requires a 4.15% Sales and Use Tax (SUT). This tax is calculated based on the vehicle's gross sales price or its current market value, whichever is higher.
Determining the Gross Sales Price
The vehicle's gross sales price reflects its cost after any incentives or rebates have been applied. It encompasses the dealer processing fee but excludes other reductions, including credits for unpaid liens, trade-ins, or other outstanding credits.
The VA DMV calculates and collects the SUT based on the automobile's gross sales price. If the estimated tax amount falls below $75, the minimum tax of $75 is applied.
The SUT is typically calculated for the buyer when purchasing a vehicle from a manufacturer or dealer.
However, in private transactions, the sales price entered by the seller on the title certificate serves as a bill of sale. Still, additional documentation may be necessary in specific circumstances.
If the vehicle is over five years old and the seller has not yet inputted the sales price or has entered an erroneous sales price on the title, there are two options for submitting the necessary documentation:
- Vehicle Price Certification (SUT 1)
- Manually written bill of sale
Both the seller and the buyer must sign the handwritten bill of sale, which must include the date of sale, year, vehicle identification number (VIN), purchase price, make, and model.
If the vehicle is under five years old, one must present an Affidavit for Procurement of Title (SUT-1A) to the VA DMV during the titling process. The SUT-1A is necessary when the price differs by more than $1,500 from the existing trade-in value mentioned in the NADA Official Used Car Guide.
Responsibility for Paying the Sales Tax
In private vehicle sales within Virginia, the buyer is typically responsible for paying the SUT to the VA DMV, not the seller. The buyer must ensure that the appropriate SUT is paid at the time of titling.
SUT Tax Exemptions
Certain exemptions from the SUT exist. The complete list can be found in the Code of Virginia's Exemptions. Some exceptions require validation of the exemption status and an accomplished Purchaser's Statement of Tax Exemption as justification.
Generally, when an individual titles their vehicle for the first time and possesses a valid registration or title from a U.S. Armed Forces branch or another state, they are excused from paying the SUT.
Conversely, if the vehicle was purchased elsewhere within the last 12 months, confirmation that the SUT was settled elsewhere must be provided to qualify for the exemption in Virginia.
Out-of-State Sales Tax Responsibility
Generally, when a vehicle registered in Virginia is sold to residents of another state, Virginia does not collect sales tax from out-of-state buyers. Instead, the buyer is required to pay sales tax in their state upon registering the vehicle there.
Each state has its own set of rules and rates regarding vehicle sales tax.
Virginia can offer a credit for taxes paid to another state if the two states have reciprocal tax agreements.
If the buyer has already paid sales tax in their home state when registering the vehicle purchased from Virginia, they usually can offset that amount against the sales tax due in Virginia should they decide to register the vehicle later.
Legal Requirements After Selling a Vehicle in Virginia
During or after a vehicle sale in Virginia, sellers must address several legal requirements and paperwork to warrant compliance with state regulations. These include:
Title Transfer and Buyer Notification
As the seller, they must sign the vehicle title to the buyer or recipient to acknowledge the change of ownership. It includes providing accurate odometer readings and any necessary disclosures.
Additionally, the seller should provide the buyer with the bill of sale, which serves as a transaction record and includes details such as the sale price, vehicle information, and both parties' signatures.
Notifying the VA DMV of the Sold Vehicle
In Virginia, sellers must notify the VA DMV when a vehicle is sold within 30 days of completing the sale. The VA DMV offers different methods for accomplishing this task. Sellers can notify the VA DMV online, through a customer service center, or by phone.
Failure to notify the VA DMV of the sold vehicle can have consequences.
If the seller does not complete the notification within the specified timeframe, they may still be held responsible for any parking tickets, toll violations, or other infractions that occur during the period when they were still listed as the owner.
Additionally, the seller may face challenges related to insurance coverage, as the policy may still be in their name even though they no longer own the vehicle.
Handling License Plates
After the sale, the seller must remove the plates from the sold motor vehicle. The removed license plates can be transferred to another vehicle as long as they are registered under the seller's name.
In cases where the plates are not being transferred, the seller must either turn them in or deactivate them at the nearest VA DMV customer service center, online, or DMV Select before informing the insurance company of the transaction.
If the seller has six months or more remaining on their vehicle registration, they can be eligible for a refund. This can be obtained in two ways:
- Submitting the completed Application for Vehicle Registration Refund Form (FMS-210) and license plates to a DMV Select or customer service center
- Completing the FMS-210 and mailing it together with the plates to the VA DMV
Partial refunds do not cover late fees, Virginia Road Tax for heavy trucks, and one-time license plate reservation fees.