Selling a vehicle in North Carolina can be an exciting and rewarding experience for anyone looking to upgrade their car or get rid of it. However, this process requires strict adherence to state-specific regulations for a smooth and safe transaction.
The North Carolina Division of Motor Vehicles (NCDMV) offers comprehensive resources and instructions to help sellers navigate the vehicle sale process. This division details the required legal documents, such as the vehicle title and inspection reports. It also requires sellers to correctly assign the vehicle title to the buyer when transferring ownership.
Once the title transfer is complete, the NCDMV mandates further instructions for sellers to relieve them from any further liability for the vehicle. This includes removing the license plate, canceling insurance, and reporting the sale.
By understanding and complying with North Carolina's vehicle sale regulations, sellers can ensure a legally compliant transaction and protect themselves and potential buyers throughout the process.
Legal Requirements Before Selling a Vehicle in North Carolina
Before selling a vehicle in North Carolina, sellers must meet certain legal obligations. Among the critical obligations for sellers is to prepare the vehicle title, conduct emissions and safety inspections, and obtain a vehicle history report.
Meeting these legal requirements before selling a vehicle in North Carolina not only guarantees compliance with state regulations but also enhances the seller's credibility in the eyes of potential buyers.
Title Preparation
Preparing a vehicle title is a crucial step mandated by law when selling a vehicle in North Carolina.
The vehicle title serves as the principal legal document facilitating the transfer of ownership from one party to another. Without a properly executed title transfer, the sale cannot be legally recognized.
In addition to facilitating ownership transfer, the vehicle title acts as concrete proof of ownership. It assures potential buyers that the vehicle they are purchasing has a clear title and is free from undisclosed debts or other legal claims.
In cases where the original title is lost or never received, North Carolina allows vehicle owners to obtain a duplicate title. This process involves completing a notarized Application for Duplicate Title Form (MVR-4) and submitting it along with lien release documents if the vehicle has an existing lien to any NCDMV location or via mail to the address specified on the form.
A fee of $21.50 is required to process the duplicate title request. However, this title fee may be waived if the original title was never received and the request for a duplicate is made within 60 days of issuance.
Note that there is a waiting period of 15 days for all duplicate title requests before processing begins.
Safety Inspection
Sellers should ensure that the vehicle being sold has a valid safety inspection report. This step is not only a legal requirement but also an essential factor that influences buyers' decisions to complete the purchase. By having a valid safety inspection, buyers can have peace of mind knowing that the vehicle meets the safety standards set by the state.
In North Carolina, safety inspections are an annual requirement for all registered motor vehicles. During this inspection, a licensed mechanic carefully examines various vehicle components to test if they meet the necessary safety standards.
Among the components that will be tested include the following:
- Headlights
- Accessory lights
- Directional signals
- Brakes (both foot and parking)
- Steering
- Tires
- Horns
- Rearview mirror
- Windshield wipers
- Exhaust system
- Emission control components
- Tinted windows (if applicable)
It is worth noting that vehicles older than 30 years are exempt from the annual safety inspection. However, it is still advisable for sellers to provide potential buyers with additional information about the vehicle's condition and any recent maintenance or repairs to build transparency and trust.
Emissions Inspection
Apart from a safety inspection, sellers in North Carolina are required by law to conduct an emissions inspection. This inspection is crucial as it assures prospective buyers that the vehicle they are buying meets emissions standards and that they will not face any issues when they register the purchased vehicle in their name.
The emissions inspection requirement is conducted in compliance with the air quality standards set by the U.S. Environmental Protection Agency. This mandate requires motor vehicles registered in North Carolina, particularly in 19 counties, to undergo an on-board diagnostic emissions inspection.
The counties that require the emissions inspection in the state are as follows:
- Alamance County
- Buncombe County
- Cabarrus County
- Cumberland County
- Davidson County
- Durham County
- Forsyth County
- Franklin County
- Gaston County
- Guilford County
- Iredell County
- Johnston County
- Lincoln County
- Mecklenburg County
- New Hanover County
- Randolph County
- Rowan County
- Wake County
- Union County
However, not all vehicles in the counties mentioned above are required to undergo emissions inspection. If certain vehicles meet the following conditions, they are exempt from the requirement:
- Light-duty vehicles that are less than three years old or have fewer than 70,000 miles odometer reading
- Vehicles that are 20 years old or older
- Vehicles that are diesel-operated
- Farm vehicles
- Antique vehicles
Vehicle History Report
In North Carolina, sellers are strongly encouraged to obtain a vehicle history report (VHR) before selling their vehicle. This report provides critical information about the vehicle's past, such as ownership history, accident records, title status, and reported damages.
By obtaining a VHR, sellers can confirm that they have accurate information about the vehicle's condition and history, allowing them to disclose any relevant details to potential buyers. This transparent approach builds trust and establishes a solid foundation for the transaction.
Sellers have several options for obtaining a VHR in North Carolina. They can use reputable online services that provide comprehensive reports based on the vehicle identification number (VIN) for a fee. Alternatively, they can request a Motor Vehicle Record (MVR) from the NCDMV, which could be a driving record, vehicle record, or crash report.
To request an MVR in person, sellers can submit the Request for Motor Vehicle Information (MVR-605A) form and the $14 payment to either the Raleigh Central Services/License Plate Agency located at 4121 New Bern Ave., Raleigh, NC 27616 or the Huntersville License Plate Agency located at 12101 Mt. Holly-Huntersville Road, Huntersville, NC 28078
Meanwhile, those who prefer to request an MVR by mail can send the completed MVR-605A form and payment to the address listed on the form. However, mail requests can take up to 10 business days to process upon receipt.
Selling a Vehicle with a Lien in North Carolina
Selling a vehicle with a lien in North Carolina requires additional steps and specific paperwork.
Initially, the seller must contact the lienholder to discuss the process and obtain specific instructions. Typically, the lienholder will require the remaining loan balance to be paid off before the sale can proceed.
After settling the lien, the seller must obtain the lien release documents. The NCDMV provides necessary forms for this, which include the Affidavit by North Carolina Lienholder (MVR-46D) and the Application for Removal of Lien from the Certificate of Title (MVR-8).
With the lien release documents in hand, the seller can transfer the vehicle title to the buyer. This process involves properly assigning the title to the buyer and including the lien release documents for a smooth transfer.
Finally, the seller must remove the license plates from the vehicle, cancel the vehicle insurance, and notify the NCDMV of the sale. These steps help remove any further liabilities and prevent potential ownership disputes.
Motor Vehicle Sales Tax in North Carolina
The state generally collects a highway-use tax instead of a sales tax when selling a vehicle in North Carolina. This tax is imposed whenever a title is transferred and is currently set at a rate of 3% of the vehicle's price. The revenue collected from this tax is then allocated to the North Carolina Highway Trust Fund and the state's General Fund to fund road improvements.
Besides the highway-use tax, North Carolina residents must also pay an annual vehicle property tax. The amount of this tax is determined by the county of residence and the vehicle's appraised value.
Who Pays Sales Tax When Selling a Car Privately in North Carolina?
During private vehicle sales, the buyer typically bears the responsibility of paying the North Carolina highway-use tax. This tax is typically paid when the buyer registers the purchased vehicle in their name at the NCDMV location.
In addition, buyers must be mindful of other fees, such as registration fees, license plate fees, and county-specific fees.
Sales Tax for Vehicles Sold in North Carolina to Residents of Another State
The sales tax for vehicles sold to residents of another state varies based on the destination state's tax laws.
Generally, out-of-state buyers who plan to register the vehicle out-of-state are exempt from North Carolina highway-use tax. However, they must pay the sales tax that applies in that particular state.
On the other hand, if out-of-state buyers intend to register the vehicle in North Carolina, they must settle the highway-use tax and any other fee during the registration process.
It is advisable to consult the NCDMV or the respective authority from another state to understand any additional requirements or exemptions applicable to interstate vehicle sales.
Legal Requirements After Selling a Vehicle in North Carolina
The seller and prospective buyer must fulfill various legal obligations during and after the vehicle sale. These responsibilities include providing accurate odometer and damage disclosure, transferring the title, returning license plates, canceling vehicle insurance, and notifying the NCDMV about the sale.
Adhering to these requirements is crucial for both parties to finalize the transaction in accordance with legal standards.
Odometer Disclosure Requirement
Understanding and adhering to the odometer disclosure requirement is crucial in vehicle transactions in North Carolina.
This requirement has been implemented to combat odometer fraud, which involves manipulating a vehicle's mileage reading to misrepresent its usage and value. By providing an accurate odometer reading, sellers enable buyers to make informed decisions about the vehicle's condition and worth.
To comply with this mandate, the seller and buyer must complete an Odometer Disclosure Statement (MVR-180). This statement should include the date of sale, the odometer reading at the time of purchase, and both parties' printed names and signatures.
However, certain vehicles are exempt from the provisions of this disclosure statement. These exemptions include:
- Vehicles with a gross vehicle weight rating exceeding 16,000 pounds
- Vehicles that are not self-propelled
- Vehicles that are 20 years old or older, beginning with the year model 2011
- New vehicles before their first transfer for purposes other than resale
- New vehicles sold directly by the manufacturer to any agency of the U.S. in accordance with contractual specifications
Damage Disclosure Statement
Vehicle sellers in North Carolina must provide buyers with a damage disclosure statement when selling a vehicle. This legal requirement aims to promote transparency and protect the buyer's interests. Failure to comply with this obligation can lead to civil or criminal liabilities for the seller.
Like the odometer disclosure, the damage disclosure statement is crucial. It allows the seller to communicate any damage or defects in the vehicle to the buyer, avoiding potential legal issues that may arise in the future.
To adhere to this requirement, sellers must accurately complete the Damage Disclosure Statement (MVR-181). The form requires sellers to detail whether the vehicle has undergone significant damage exceeding 25% of its value due to collisions, its salvage status, any history of flooding, recovery from theft, or reconstruction.
The seller must truthfully complete and sign the document. Likewise, the buyer must acknowledge its content and sign confirming their awareness of the disclosed damage information.
Title Transfer
When selling a vehicle in North Carolina, sellers and buyers must learn the prerequisites for transferring the title. This process is crucial to officially transfer vehicle ownership and protect both parties from potential legal and financial liabilities.
To initiate a title transfer, the seller and the buyer must complete the necessary information on the assignment portion of the title. This includes the seller's signature and printed name, the date of sale or delivery, and the buyer's name and address.
In North Carolina, vehicle titles need to be notarized when transferring. Furthermore, if multiple individuals own the vehicle, all owners must sign the title.
Once the information on the title is complete, the seller can transfer it to the buyer along with the odometer disclosure and damage disclosure statements to finalize the process.
Do Both Parties Need To Be Present To Transfer a Title in North Carolina?
In North Carolina, both parties do not necessarily need to be present simultaneously to transfer a vehicle title, but specific requirements must be met to have a valid title transfer.
Since North Carolina requires a notarized title, the seller must be in the presence of a notary public to have their signature acknowledged and validated. Once the title is notarized, it can then be transferred to the buyer.
After receiving the notarized title, the buyer becomes responsible for registering the vehicle in their name with the NCDMV.
License Plate Return and Cancel Vehicle Insurance
Once a vehicle is sold in North Carolina, the seller must take necessary actions to protect themselves from potential liabilities or financial burdens associated with the vehicle.
Sellers must remove the plates from the vehicle before completing the sale. This measure guarantees that the buyer or any other individuals do not inadvertently use the plates, which could lead to traffic violations or legal issues for which the seller may be held accountable.
Once the license plates have been removed, the seller can transfer them to another vehicle they own or surrender them to the NCDMV. If choosing to return the plates, they must visit an NCDMV license plate agency or mail them to the address below:
NCDMV Vehicle Registration Section
Renewal Title & Plate Unit
3148 Mail Service Center
Raleigh, NC 27697-3148
In addition to removing the license plates, sellers must cancel the vehicle insurance. However, this should only be done after the license plates have been returned to the NCDMV. Canceling the insurance before returning the plates may result in a fine for failure to maintain continuous insurance coverage.
Notify the NCDMV of the Sold Car
After selling a vehicle in North Carolina, the seller should promptly notify the NCDMV. This notification is essential to avoid future confusion or disputes regarding the vehicle's ownership. Additionally, it absolves the seller of any responsibility for accidents, violations, or other issues arising after the sale.
Although the NCDMV does not require a specific form for this notification, completing and submitting a bill of sale to the NCDMV is recommended.
Numerous bill of sale templates are available online, but this document typically includes the full names and addresses of both the seller and the buyer, the selling price, and detailed information about the vehicle, such as the VIN, make, model, year, and odometer reading at the time of sale.
For further guidance on properly notifying the NCDMV and to confirm complete release from any liability associated with the sold car, individuals are advised to either visit an NCDMV location or contact their customer service hotline at (919) 715-7000.