Selling a vehicle in Georgia is more than just handing over the keys to the new owner. It requires understanding several legal requirements to ensure the transaction is complete and legally binding.
There are legal obligations that must be fulfilled both before and after selling a car. From gathering the necessary paperwork to notifying the Georgia Department of Revenue Motor Vehicle Division (MVD) of the sale, sellers must ensure that each of these requirements has been met.
Adherence to these specific regulations not only simplifies the sale process but also assures the buyer of the legitimacy of the transaction. Failing to do so can lead to complications, including financial liabilities and legal issues.
Legal Requirements Before Selling a Vehicle in Georgia
Before selling a vehicle in Georgia, sellers must navigate through a series of legal requirements. These requirements are put in place to protect both the seller and the buyer and ensure transparency, fairness, and compliance with state regulations.
Preparing the Original Title
Before listing a vehicle for sale, the current owner or the seller must possess the original title. If the title is lost or stolen, an application for a replacement title must be completed. This can be done by visiting a County Tag Office and completing the following:
- Submission of a duly completed and signed MV-1 Title/Tag Application
- Submission of the mutilated (damaged) title, if applicable
- Payment of an $8 replacement title fee
Additional requirements may apply in certain situations. For example, if a lien or security interest is still indicated on the current title record, an original Form T-4 Lien or Security Interest must be provided.
If the name on the title has changed, a certified copy of the legal court document authorizing the name change, such as a marriage license or divorce decree, must be attached to the application. If the title was assigned but not issued, the current owner (as shown on record) must apply for the replacement title.
Once the original title is obtained, the seller must accurately complete all the necessary information, including their name, address, and vehicle details, to avoid any errors or discrepancies that could complicate or delay the selling process.
Emissions Testing
As part of efforts to meet air quality standards established by the 1996 Federal Clean Air Act, emission testing is mandated before selling a vehicle in thirteen counties in Georgia's Atlanta metropolitan area. These counties include:
- Cherokee
- Clayton
- Cobb
- Coweta
- DeKalb
- Douglas
- Fayette
- Forsyth
- Fulton
- Gwinnett
- Henry
- Paulding
- Rockdale
This requirement applies to vehicles between 3 and 25 years old, weighing less than 8,500 pounds, and being gasoline-powered. Owners of qualifying vehicles must complete the testing process once a year or during each vehicle registration renewal.
Note that this rule has several exemptions. Vehicles with a gross vehicle weight rating (GVWR) greater than 8,500 pounds and those powered by alternative fuels such as diesel, electric, or propane are exempt.
Additionally, antique or collector cars, vehicles over 25 years old, hybrid vehicles, and certain vehicles owned by senior drivers older than 65 are not required for this process.
Advertising the Vehicle
Compliance with the Georgia Code Section 40-2-39.1 is essential when advertising a vehicle for sale in Georgia.
According to the code, property owners or lessees are prohibited from authorizing the display or parking of more than five used motor vehicles within a 12-month period for selling or advertising. Simultaneously, no more than two used motor vehicles can be displayed or parked on the property for selling or advertising.
Additionally, any used motor vehicle displayed or parked for sale or advertising must be lawfully titled and registered in the name of the individual or entity offering the car for sale.
Failure to comply with these regulations is considered unfair and deceptive, which can lead to penalties under the Fair Business Practices Act of 1975.
Vehicle History Report
A Vehicle History Report (VHR) is integral to selling a car in Georgia. This document provides a comprehensive overview of the vehicle's past, encompassing ownership history, accident reports, title information, mileage records, and any recalls.
By presenting a VHR to potential buyers, sellers can establish trust and transparency, which expedites the sale process and justifies the asking price.
Obtaining a VHR is a relatively straightforward process. Sellers have the option to access these reports through various third-party services. A Vehicle Identification Number (VIN) is typically required to obtain a VHR. Note that there is a fee for acquiring these reports.
Selling a Vehicle with a Lien in Georgia
Selling a vehicle with a lien in Georgia involves a series of specific steps to ensure a smooth transaction.
The process begins with contacting the lienholder to determine the amount needed to settle the outstanding loan. Once this amount is established, the seller has two options for addressing the lien.
Firstly, they can choose to pay off the loan before selling the vehicle. This entails settling the loan balance, which prompts the lender to issue a lien release document to the GA MVD. Upon receiving the updated title, the seller can transfer it to the buyer.
If paying off the loan is not feasible, the seller may allow the buyer to pay the payoff directly to the lienholder. This arrangement often involves both parties visiting the lender's office to finalize the transaction or setting up an escrow account to facilitate the exchange. Following the resolution of the lien, the seller must initiate the title transfer process.
For more information or guidance about selling a vehicle with a lien in Georgia, contact the GA MVD or any local County Tag Office.
Motor Vehicle Sales Tax in Georgia
Both parties must understand the Title Ad Valorem Tax (TAVT) when selling a vehicle in Georgia.
Implemented on March 1, 2013, TAVT replaces the conventional sales and annual ad valorem tax with a one-time payment based on the vehicle's fair market value. The rate is currently set at 7% and is paid upon vehicle titling.
However, exemptions and reduced rates apply to this tax rule. Non-titled vehicles and trailers are exempt from TAVT but are subject to annual ad valorem tax. Meanwhile, new residents are eligible for a reduced TAVT rate of 3%, which came into effect on July 1, 2019. Additionally, family transfers and inheritances can qualify for reduced TAVT rates.
As for military personnel and first responders, special exemptions or reduced rates may apply provided they meet specific criteria and provide the required documentation.
Sellers should also be mindful of the Annual Ad Valorem Tax, which applies to vehicles not under TAVT. This tax, assessed annually based on the vehicle's fair market value and the owner's tax district, must be paid upon registration renewal to avoid penalties.
Check out this Vehicle Taxes page on the official GA MVD website for further information.
Who Pays Sales Tax When Selling a Car Privately in Georgia?
In Georgia, the buyer typically shoulders the payment of sales tax or TAVT during private-party transactions. As mentioned, the tax amount depends on the vehicle's market value and is paid at the time of vehicle registration.
Purchasers must ensure proper payment of this tax to complete the titling process, establish their legal ownership of the vehicle, and assume the associated responsibilities.
Sales Tax for Vehicles Sold in Georgia to Residents of Another State
Georgia sales tax applies solely to vehicle sales within the state. If the car is delivered outside Georgia or to the jurisdiction where it will be registered, the buyer may be exempt from Georgia sales tax obligations.
However, buyers should acquaint themselves with their state's tax regulations, as they might incur taxes upon registering the vehicle locally.
Legal Requirements After Selling a Vehicle in Georgia
Following a successful vehicle sale in Georgia, the seller and buyer must address additional legal requirements to complete the transaction. These obligations include:
Odometer Disclosure Requirement
Adherence to the Odometer Disclosure Requirement is imperative following the sale of a vehicle in Georgia.
Under this requirement, sellers must accurately document the vehicle's odometer reading on a secure transfer document such as the title. On the other hand, buyers are obligated to acknowledge this declaration by printing their name and signing the title with the listed mileage.
Specific vehicles are exempt from this requirement under the Federal Truth in Mileage Act. It includes those with a GVWR over 16,000 pounds, non-self-propelled vehicles like trailers, vehicles 20 model years or older, those sold directly by manufacturers to U.S. government agencies, and new vehicles transferred from dealer to dealer before the first retail sale.
Transferring the Title to the New Owner
When transferring the title to a new owner of the sold vehicle, certain steps must be followed.
Initially, the Title Assignment section on the back of the title must be completed. This should include all the sellers' names and signatures (if with multiple sellers) and the buyer's name, address, and purchase price.
For vehicles under ten years old, an Odometer Disclosure Statement must be completed either on the back of the title or on a separate form. Also, if a lienholder is listed on the title, obtaining a lien release from the lienholder is crucial before transferring the title to the new owner.
Lastly, transfer fees must be settled. The exact amount may vary depending on the county in which the transfer takes place, but it typically consists of a license plate fee, title fee, TAVT, and any penalty due.
Do Both Parties Need To Be Present To Transfer a Title in Georgia?
In Georgia, both parties generally do not need to be present to transfer a vehicle title. However, the seller must provide the necessary information and sign the title. The buyer can then complete the transfer process by submitting the signed title to the GA MVD and any required documents and fees.
Removing the Plates
Following a successful title transfer in Georgia, sellers must promptly remove the license plates from the vehicles. Both standard and specialty plates remain the seller's property and should be detached before finalizing the sale.
Buyers, meanwhile, are obligated to register and acquire new plates or transfer existing ones within 30 days of purchase or transfer.
Cancelling Vehicle Registration and Insurance
Georgia vehicle owners must cancel the registration of their vehicles once they are sold. Failing to do so could expose them to liability for any incidents involving the car.
In Georgia, vehicle owners can voluntarily cancel registration through two methods: online using DRIVES e-Services or in-person at their local County Tag Office.
To cancel vehicle registration online, sellers need to have their license plate or VIN number and their driver's license number or Letter ID. The Letter ID can be found on any correspondence received regarding the vehicle.
For those who prefer an in-person approach, completing and submitting a Form MV-18J Application of Voluntary Registration Cancellation to the County Tag Office is necessary.
Once the registration cancellation is completed, sellers can cancel their insurance policy. Depending on the payment frequency, sellers may be eligible for a prorated refund for the remaining policy duration. It is advisable to contact the insurance company to confirm if any cancellation fees are applicable.
To avoid any potential issues, sellers should aim to cancel their insurance policy within 30 days of selling their car.
How To Notify the Georgia MVD of the Sold Car?
While not required, sellers can notify the Georgia MVD of the sold car by completing a Bill of Sale. This document verifies the transfer of ownership from the seller to the buyer.
A complete Bill of Sale must include information such as the full name and address of both parties. It must also have the vehicle's details, such as the VIN, make, model, year, and odometer reading at the time of sale. If there are any liens on the vehicle, the lienholder's details should also be indicated.
To finalize the Bill of Sale, the agreed-upon purchase price should be stated, and both the seller and buyer must sign the document.
Sellers should keep a copy of the completed Bill of Sale for their records. This copy can serve as proof of the transaction and can provide protection in case of any future disputes.