The keys are handed over and the money is in your account. But your obligations don't end at the point of sale. Failing to notify the right parties promptly can leave you on the hook for parking tickets, tolls, traffic violations — or worse — long after the car is gone.
Step 1: File a Release of Liability with Your State DMV
This is the most important step. A Notice of Release of Liability (sometimes called a Notice of Transfer) officially records that you are no longer the owner of the vehicle. Until you file this, you remain responsible for anything that happens with the car.
- Most states allow online filing through your state DMV website. This is the fastest method and provides a confirmation number.
- California: File a Notice of Transfer and Release of Liability at dmv.ca.gov within 5 calendar days of the sale.
- Texas: Report the sale online at TxDMV.gov within 30 days.
- Florida: Submit a Notice of Sale through the FLHSMV online portal.
- New York, Illinois, and others: Check your state DMV site for the specific form and filing method.
- Keep the confirmation or a copy of your filing for at least two years.
Step 2: Handle the License Plates
In most US states, license plates belong to the owner, not the vehicle. When you sell the car, you keep the plates.
- Remove your plates before or at the point of sale in most states.
- Return or transfer the plates: If you're buying a new vehicle, you can often transfer your plates. Otherwise, surrender them to your state DMV to avoid continued registration fees.
- California, Kansas, and North Dakota are exceptions — plates typically stay with the vehicle. Check your state's rules.
- If the buyer drives away with your plates (in a state where they shouldn't), contact your DMV immediately.
Step 3: Cancel Your Insurance
Contact your auto insurer immediately after the sale to cancel or transfer your coverage.
- Cancel the policy for the sold vehicle. You may be entitled to a pro-rata refund for the unused portion of an annual or 6-month policy.
- Don't cancel early: Keep the policy active until the title has officially transferred and you've filed your release of liability. Some states require the seller to maintain insurance until transfer is complete.
- Transferring to a new vehicle? Contact your insurer to update the policy — in most cases you can transfer coverage the same day.
Step 4: Notify the Lienholder (If Applicable)
If your vehicle had a loan, the lender (lienholder) held the title. Selling should have involved paying off the loan and receiving a lien release. Once you have the lien release, keep it with your records as proof the loan was cleared.
Step 5: Keep Your Records
- Keep a signed copy of the bill of sale.
- Keep your DMV release of liability confirmation.
- Keep the odometer disclosure statement.
- Keep any lien release documentation.
- Retain these records for at least two years.
