This article covers a simple scenario: "As is" sale of a car.
Topics on this page:
- Transaction Steps
- Post-Sale Seller Steps
- Post-Sale Buyer Steps
- Tips for the buyer and seller
- The Documents
Transaction Steps
Step 1: Communicate and Understand What Is Being Sold
- Buyer: In Maryland, a safety inspection is required before you can register a car. This responsibility generally falls to the buyer, since the buyer will be the one seeking to register the car. Consider asking to pay for a safety inspection before paying for the vehicle.
- Seller: Be sure the buyer understands that the sale is “as is.” You may wish to state in writing that the car is being sold “as is.”
Step 2: Arrange for Transfer of Vehicle
- Buyer: You should arrange to receive the vehicle at your property, or somewhere you can legally keep it until you complete the post-transaction steps. Don't receive the vehicle on public property. An unregistered vehicle can be ticketed if it is parked in a public place and it is illegal to drive an unregistered and uninsured vehicle.
- Seller: You should park the car on the property of the buyer, or in some place where the buyer can legally keep it. The buyer can also have the car picked up by a tow truck.
Step 3: Transfer the Title and Cash
- Buyer: Pay cash and receive vehicle title from seller.
- Seller: Sign over the title and receive cash from buyer.
Step 4: Finalize the Bill of Sale
- Buyer: You should receive a bill of sale from the seller.
- Seller: Bill of Sale options: (Required by law for newer cars being sold cheaply)
- If the car is older than 7 years, OR if the car is being sold for the blue book value, or more, you are NOT required to use a notarized Motor Vehicle Administration (MVA) Bill of Sale.
- If the car is 7 years old or newer, AND the sale price is less than the blue book value, you must use notarized MVA Bill of Sale.
- Whether or not the MVA requires you to use its Bill of Sale, you may wish to use it, or to use your own contract.
Post-Sale Seller Steps
Step 1: Remove your license plates and registration certificate from the car when you hand over the keys.
Step 2: If you recently registered or re-registered the car, you may be entitled to a partial refund when you turn in the plates. If you are seeking a registration refund, fill out and bring the form when your return your plates to MVA:
Step 3: Return the plates and registration certificate to the MVA. There is no fee for returning license plates. You can also return the plates to any MVA authorized tag and title service, but they might charge you a fee.
Step 4: Call and cancel the insurance on the car.
- NOTE: Canceling insurance before returning your license plates to MVA can result in a large fine. Be sure you get a receipt from the MVA for the license plates.
Post-Sale Buyer Steps
Step 1: Have the car inspected and take an inspection report showing that the car passes inspection. You may have to perform repairs and have the car re-inspected to do this.
- Used vehicles are required to pass a safety inspection prior to being registered in Maryland.
- If you are having difficulty arranging the inspection, you may be eligible for a 30-day temporary registration or a military personnel inspection waiver. A temporary registration allows you to legally drive your vehicle to and from an authorized Maryland inspection station or repair facility in order to have the vehicle pass a Maryland safety inspection.
Step 2: Have the car insured.
Step 3: Register the car.
- Once your vehicle has passed a safety inspection, you may apply for your registration and license plates.
- You will need to bring the following documents to the registration section of any full service office.
- Your temporary registration
- The Maryland safety inspection certificate from the inspection station.
- Insurance information including your insurance company’s name, policy or binder number and agent.
- An Application for New Plates/Stickers & Transfer of Plates or Non-Title Trailers.
- There are fees to submit the application for registration and license plates.
Tips for the buyer and seller
Stay safe! Don’t be a theft target. Don’t show up with a large amount of cash in a place where you do not feel comfortable.
Tips for the seller:
- If you are selling the car “as is,” be careful not to promise that the car works any better than it does. You may wish to use a Bill of Sale or a written contract, even if not required, to state in writing that the sale is “as is.”
- You may also get more money for the car if you handle the inspection and repair process yourself. You may not want to pay for the inspection unless you have a contract with a buyer, however, because a passing inspection report only remains valid for a certain period of time.
- The easiest way to not be scammed is to deal only with cash. Some scams involve a buyer trying to overpay you with a bad check or other non-cash means, and having you pay back some in cash to the buyer or a third party. Learn more about Avoiding online car buying scams.
Tips for the buyer:
- Before buying the car, it is a good idea to do a Uniform Commerical Code search to check whether anyone has a perfected security interest in the car as collateral for a loan.
- In order to register the car after buying it, you will need to prove to the MVA that the car passes inspection.
- You may wish to arrange for the inspection and repairs before buying the car. If not, be sure you have a legal way to transport and store the car legally until it is registered. It is illegal to drive a car that is not registered and insured. It is also illegal to park an unregistered car in a publicly accessible place like a street or a store parking lot.
- You can buy a “Temporary Registration” at the MVA when titling the vehicle. The temporary registration is valid for 30 days. This gives you time to get the inspection and repairs you need to register the vehicle. The registration fee will not be collected until the “Maryland Safety Inspection Certificate” is submitted and a one or two year registration plate is requested. However, you will need to pay the title fees, taxes, any lien filing fee, and the temporary registration fee when purchasing the temporary plates.
The Documents
The certificate of title
Before buying or selling a car, make sure the title is free of liens. Liens will be stated on the front of the title.
There is a place on the back of the title for the names and signatures of the seller(s) and the buyer(s), the sale price, the odometer reading, and the date.
The bill of sale or contract
The MVA provides a Bill of Sale form. If this form is required, fill it out and have the buyer(s) and seller(s) sign it in the presence of a Notary Public. (The Notary Public may charge a small fee.)
Even if you are not required to use the MVA Bill of Sale form, you may wish to use a Bill of Sale or a written contract anyway. You can use the MVA Bill of Sale, or you can write a simple contract, modeled on the MVA Bill of Sale.
If you write your own contract, you may wish to include things like:
- all of the information that appears in the MVA Bill of Sale form (Vehicle year, make, model, body style, VIN; Name of buyer; Sale Price; Odometer reading; Buyer's and Seller's names, signatures, and date of signatures);
- a statement that the car is being sold "as is," (or a statement listing any guarantees by the Seller);
- a statement of any agreement the seller makes about delivery;
- a statement that the Buyer is responsible for all liability and damages after the sale;
- a statement that the Seller owns the vehicle and has authority to sell it;
- a statement that the vehicle is free of all encumbrances, liens, taxes, and fees;
- a statement that the Seller will defend and beheld responsible for any encumbrance, lien, tax or fee owed because of the car, before the sale;
- anything else that is relevant.
This list contains some ideas, but you may not need each of these statements, and you may need other statements.
You can have the Bill of Sale or Contract notarized if you wish.