How to Properly Buy, Sell, Gift or Donate a Vehicle Through a Private Transaction
If you are selling, buying, gifting or donating a vehicle in Maryland, the transaction can be confusing. That’s why each step is covered in this guide to help you privately sell or buy a vehicle, donate or give the vehicle as a gift.
Buyers and sellers should be aware that private vehicle sales (without a licensed dealer) are not regulated by the MVA. Any legal action regarding the sale, warranties, or consumer rights are the sole responsibility of the buyer and the seller.
Always keep a copy of any transfer of ownership documents or related forms for your records.
If You are Selling the Vehicle:
It is your responsibility to take care of the following transactions:
Assign the Vehicle to the New Owner
Is a Notary or a “Bill of Sale” Needed?
You will need a notary, witnessing both the buyer(s) and seller(s) signatures, if you present a bill of sale to complete your transaction. On the “Maryland Certificate of Title” there is a space for the purchase price, and you will not need a bill of sale, unless the vehicle is 7 years old or newer and the vehicle is being sold for less than the book value.
- A notarized
MVA Bill of Sale (form # VR-181) is needed if the sale price is less than the vehicle’s book value and the vehicle is 7 years old or newer. Please call the MVA’s Customer Service Center at 1-410-768-7000 to verify the vehicle’s book value.
- A notarized MVA “Bill of Sale” is not needed if the vehicle’s sale price is more than the vehicle’s book value or the vehicle is over 7 years old.
- If a notarized “Bill of Sale” is not presented and the purchase price of the vehicle is within $500 of the retail value as shown in the National Publication of Used Car Values, MVA will accept the purchase price as completed on the title.
Always Provide to the Buyer the Original Title, and the Original Security of Interest Filing, so that the Buyer Will Have Evidence that the Vehicle Being Sold Has Been Paid Off in Order to Obtain the New Title.
- If there was a lien on the vehicle, to prove the vehicle has been paid off, the “Notice of Security Interest Filing” is needed by the MVA, and the original Notice of Security Interest Filing must be submitted by the buyer to the MVA in order for the new Title to be issued. It is sent to the vehicle’s owner by the financial institution once the final payment has been received.
- If the document is not available, please request a letter on the financial institutions letterhead stating that they hold no security interest and have it signed by the financial institution’s authorized agent. The letter should also include the date of the loan's creation, the amount, the date of its release, the name and address of the debtor, and a full vehicle description (year, make and vehicle identification number).
- The lien on the vehicle must be paid off by the seller prior to transferring ownership. If the vehicle has not been paid off, the seller must contact the financial institution to arrange final payment in order to be released from the lien. Once the lien has been satisfied, the institution will send a letter to you that is signed by the financial institution’s authorized agent releasing the lien on the vehicle or a signed “Notice of Security Interest Filing”.
- Note to Sellers: Once the new Title has been created for the buyer, your old Title and Security of Interest Filing documents will be destroyed.
Return the License Plates to the MVA Before You Cancel Insurance on the Vehicle.
Maryland law is extremely strict and uninsured motorist fines begin at $150 for the first day a vehicle is not insured. Unless the seller is transferring the plates to another vehicle, return the license plates to the MVA and retain the receipt, before canceling the insurance coverage on the vehicle.
If You are Buying the Vehicle:
Whether the vehicle is being purchased from within Maryland or out-of-state, the procedure is the same to transfer ownership to you. Visit an MVA full service office with the following completed documents. You may need a ride to the MVA, because you must register the vehicle and obtain your license plates before you can drive the vehicle on the road.
Certificate of Title
A Release from the Institution that has Financed the Vehicle
- If the seller is transferring ownership of a vehicle titled in Maryland and has financed the vehicle, a “Notice of Security Interest Filing” will be needed. If the vehicle is titled out-of-state the title will be needed showing the lien has been satisfied.
- If the "Notice of Security Interest Filing" is not available, please request from the seller a letter from the financial institution. The letter must be on the financial institution’s letterhead, signed by the financial institution’s authorized agent stating that they hold no security interest. The letter should also include the date of the loan’s creation, the amount, the date of its release, the name and address of the debtor, and a full vehicle description (year, make and vehicle identification number).
- To title the vehicle in Maryland the buyer must have either the “Notice of Security Interest Filing” or the letter from the financial institution.
An MVA “Bill of Sale”
- A notarized MVA Bill of Sale is needed if the sale price is less than the vehicle’s book value and the vehicle is 7 years old or newer. Please call the MVA’s Customer Service Center at 1-410-768-7000 to verify the vehicle’s book value.
- If a notarized “Bill of Sale” is not presented and the purchase price of the vehicle is within $500 of the retail value as shown in the National Publication of Used Car Values, MVA will accept the purchase price as completed on the title.
- An excise tax will be charged on the basis of 6% of the vehicle’s book value or 6% of the purchase price on the notarized “Bill of Sale” for vehicles 7 years old or newer. For older vehicles, the tax is calculated on the purchase price. Maryland’s minimum excise tax charged is $38.40, based on a minimum value of $640.
Vehicle Inspection
- Used vehicles must be safety inspected before they can be registered by the MVA. The vehicle must be inspected by a licensed Maryland inspection station. An automobile dealer, service station or specialized automobile service center can all be licensed as Maryland inspection stations. A “Maryland Safety Inspection Certificate” is valid for 90 days. Make sure the vehicle identification number, engraved on a metal plate and visible through the windshield on the driver’s side, matches the number entered on the “Maryland Safety Inspection Certificate”, the “Certificate of Title” and any other vehicle ownership documents. Altered inspection certificates will not be approved.
- A Temporary Registration is available for buyers who must have an inspection or repairs completed to register the vehicle. The temporary registration may be purchased at the MVA when titling the vehicle and is valid for 30 days from the issuance date. The temporary registration allows the buyer to transport the vehicle for a Maryland safety inspection and any necessary repairs. 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, the buyer will need to pay the title fees, taxes, and any lien filing fee, if applicable, and the temporary registration fee when purchasing the temporary plates.
- If a temporary registration is needed, an MVA Temporary Inspection Waiver (form # VR-129) must be completed.
License Plates and Insurance
Has the Vehicle Been Damaged?
Why the Vehicle’s Title History is Important
Always ask to see the title and review it carefully. You may wish to trace a used vehicle’s title to obtain the vehicle’s history, and to confirm ownership of the vehicle and the odometer reading.
Look for any indications that the vehicle has been salvaged which may mean that it has been extensively damaged. In Maryland, anyone who wishes to re-title a salvaged vehicle is required to undergo a salvage inspection to prove that the vehicle is safe to drive. A salvage certificate is then issued with a “brand”. Salvage certificates are branded in Maryland by the following categories:
- Damage to the vehicle is greater than the market value
- Damage to the vehicle is equal to or less than the market value, (the title will not be branded)
- The vehicle is not rebuildable, not to be re-titled
- Or the vehicle has been either stolen or abandoned.
Once the Maryland Salvage Certificate has been issued, the owner can apply for and obtain a new title for the vehicle. If the salvage certificate was branded because the damage to the vehicle was greater than the fair market value or was an abandoned vehicle, the title certificate will be branded rebuilt savage. The MVA cannot issue a title to a vehicle branded as not rebuildable; not to be retitled. If applying for registration, the vehicle must undergo a Maryland Salvage Inspection, and then a Maryland Safety Inspection before registration plates may be issued. If the vehicle you are interested in purchasing is a re-titled Maryland salvaged vehicle, it will appear on the MVA’s history report.
The Maryland Motor Vehicle Administration can provide you with the basic title information showing the history of the vehicle while it has been registered in Maryland. Due to our privacy laws, we will not give you the name or address of any previous owners but will supply you with the vehicle information. To request the information, complete an MVA Request for Motor Vehicle Administration Records (form # DR-057) for either a non-certified or certified record. You will need to know the vehicle’s title number, tag number, and vehicle identification number. An individual researching a vehicle’s history would request a non-certified record containing only the vehicle’s history. If the vehicle record is to be used for legal or court actions a certified record is requested, containing the MVA’s Administrator’s seal.
If the vehicle has been salvaged and re-titled in another state it may not appear on the Maryland MVA vehicle history. The state that re-titled the vehicle would have a history of the transaction. If the vehicle is currently registered out-of-state or at some time has been registered in a different state, you will need to contact that state’s department of motor vehicles to obtain the vehicle’s history. Each department of motor vehicles may require a variety of vehicle information to obtain the title history. Contact them for their requirements and procedures.
There are also automobile services listed in the yellow pages or on the Internet under a search for “vehicle history” that will provide a complete vehicle history. An automobile service running a history check on the vehicle would also have a salvaged indication on it. Some companies provide the service for free, while others will charge a fee. Most of the companies require the vehicle make, model, and vehicle identification number.
Helpful Transaction Tips
- The seller should have the “Certificate of Title” and “Security Interest Filing” (if applicable) available for the buyer to examine at the time of the transaction. The buyer should verify that the name on the title is the same as the seller’s name, the title has not been altered, and the vehicle identification number matches the one on the vehicle. The title should not contain erasures or staples that could conceal or distort information, making the title invalid.
- The title must be completed properly by both the seller and the buyer at the time of the transaction. The completed information must be clear and easy to read to ensure accuracy and to avoid future problems when the buyer registers the vehicle.
- The buyer’s name must be recorded in the “Assignment of Ownership” area on the title to complete the sale. Without this information, the title is considered “open” and will not be recognized by the MVA for registration.
- The transaction will need a separate notarized MVA Bill of Sale (form # VR-181) signed by both the buyer and the seller if the vehicle is less than 7 years old and is not being sold for the National Automobile Dealers Association book value.
Donating a Vehicle to Charity
If you are donating a vehicle, the owner and the charity need to do the following:
Owner:
- The title of the vehicle must be properly assigned to the charity. This is handled in the same manner as if you were actually selling the vehicle. Be sure to fill in the name and the address of the charity under the “Assignment of Ownership” section to properly complete transfer of ownership of the vehicle to the charity. Some charities may request that you leave the new owner information blank, but this leaves you at risk for future problems since the title would then be considered “open” by the MVA and unassigned. It may also affect your tax deduction for the donation.
- The odometer mileage must be filled in on the “Maryland Certificate of Title."
- If the giver has financed the vehicle, the charity will need the vehicle’s “Maryland Notice of Security Interest Filing” showing the vehicle has been paid off. If that document is not available, please request a letter on the financial institution’s letterhead stating that they hold no security interest and have it signed by the financial institution’s authorized agent. The letter should also include the date of the loan’s creation, the amount, the date of its release, the name and address of the debtor, and a full vehicle description (year, make, and vehicle identification number).
- Do not leave the license plates on the vehicle. After the title is transferred, remove the license plates from the vehicle and return the plates to the MVA unless you are transferring the plates to another vehicle. You may only transfer the plates if the new vehicle is titled in the same name and the new vehicle classification is the same as the old vehicle. Keep your receipt from the MVA when you return your plates. Keep insurance coverage on the vehicle until the date the plates are returned to the MVA or transferred to the new vehicle.
- Cancel the vehicle insurance for the donated vehicle. To avoid penalty fees, cancel the vehicle insurance only after the plates have been returned to the MVA or transferred to another vehicle.
Charity:
The charity is responsible for providing the owner with a receipt for tax purposes for the donation of the vehicle. Check with the charity concerning the allowable tax deduction.
List of Charities Licensed as Wholesale Dealers in Maryland.
Giving the Vehicle as a Gift
If the vehicle is being given as a gift, and an exemption from excise tax is being requested, the following requirements apply:
The parties involved in the transfer of the vehicle must be members of immediate family:
- Spouse
- Son or Daughter
- Adopted Son or Daughter
- Grandson or Granddaughter
- Stepson or Stepdaughter
- Mother or Father
- Stepmother or Stepfather
- Brother or Sister
- Half Brother or Half Sister
- Grandmother or Grandfather
- Son-in-law or Daughter-in-law
- Mother-in-law or Father-in-law
- Aunt or Uncle (65 years old or older) to niece or nephew
If the last names do not agree, you must submit proof of the relationship.
For example, a marriage certificate showing the daughter’s current married name, as well as a birth certificate showing the daughter’s last name prior to the marriage would prove the relationship. Please contact the MVA’s Customer Service Center at 1-410-768-7000 if you need clarification on the types of documentation needed to prove a relationship.
Note: Marriage licenses are acceptable if it is a certified official marriage certificate signed by a clerk of the court and contains an embossed seal. Marriage certificates signed by the Pastor/Minister/Clergy received after the ceremony was performed will not be accepted. A certified official marriage certificate can be applied for and obtained from the court.
If a vehicle is being given to a niece and/or a nephew from an aunt and/or uncle, a Certified Statement (form # VR-299) is needed to accompany the Gift Certification (form # VR-103).
Certificate of Title
To give the vehicle as a gift in Maryland it must be already titled in the state of Maryland. You must submit the Gift Certification (form # VR-103) with the Certificate of Title.
- To give the vehicle to one family member from another, the same information and transaction procedures are required on the “Maryland Certificate of Title.” The person giving the vehicle is the “seller” and the “buyer” is the person receiving the vehicle as a gift.
- To add a name to the title, place both the current owner’s name and the new name on the line for “name of buyer” in the “Assignment of Ownership” section. Complete the address line for the buyers in this, as well as the “Application for Title and Registration” section.
- It is important to remember that the current lienholder on the vehicle must approve the addition or deletion of a name on the title. A vehicle with a current lien must have a letter of permission on the lienholder’s letterhead for the owner to submit to the MVA to add or delete a name on the title.
- In the purchase price section, print the word “gift” and fill in the date of the transaction.
- Fill in the odometer reading in the “Assignment of Ownership” section.
GIFT ASSIGNMENT OF OWNERSHIP
Click to see enlarged form
Vehicle Inspection
Any transfer between spouses or between parent and child are exempt from inspection if titled in Maryland. All other transactions require a Maryland Safety Inspection. An inspection is not required if the vehicle is co-owned and one of the names is being removed from the title certificate.
Notice of Security Interest Filing
- If there is a lien showing on the face of the title and the vehicle is paid off, the receiver of the vehicle will need the “Notice of Security Interest Filing."
- If the document is not available, please request the giver of the vehicle to obtain a letter on the financial institution’s letterhead stating that they hold no security interest and have it signed by the financial institution's authorized agent. The letter should also include the date of the loan's creation, the amount, the date of its release, the name and address of the debtor, and a full vehicle description (year, make and vehicle identification number).
Excise Tax
A vehicle that is titled in the state of Maryland and is transferred as a gift is tax exempt as long as the receiver meets the relationship requirements. A vehicle that is given as a “gift” to a Maryland resident from out-of-state is not tax exempt unless the vehicle was previously titled and registered in Maryland and the relationship of the individuals meets our requirements.
Plate Transfer and Registration
- Insurance information must be submitted to register the vehicle. The full name of the insurance company, policy or binder number, and the agent’s name (if there is an agent) must be submitted. The insurance information is certified as true and correct by the recipient(s) signature(s). The insurance coverage must be provided by a company licensed to insure vehicles in Maryland.
- The recipient of the vehicle must complete the “Application for Title and Registration” section on the “Maryland Certificate of Title” with the insurance information.
Plates may be transferred if the vehicle is titled:
- In joint names of husband and wife and is being transferred to the name of either the husband or the wife;
- In the name of the husband or the wife and is being transferred to the joint names of both;
- In the joint names of a parent and child and is transferred to the individual name of either party;
- In the name of an individual and is transferred to the joint names of that individual and that individual’s parent or child; or
- In the name of an individual and is transferred to the name of a child or parent of that individual.
New plates must be purchased for all other gift transfers to family members. If you are transferring plates and less than 12 months remain in the registration year, the registration will be renewed for an additional year when the vehicle is titled. If the plates cannot be transferred and are returned with 12 or more months remaining, a one-year registration fee refund will be mailed to you.
Unlicensed Vehicle Dealers vs. Licensed Dealers
There is a difference between a licensed vehicle dealer and a “curbstoner." A curbstoner is an unlicensed vehicle dealer who sells vehicles on the street or “at the curb." Curbstoners may also advertise vehicles in the newspaper classified section.
Here are a few clues to spot a possible curbstoner:
- The vehicle’s title is not in the seller’s name.
- The same phone number is listed for multiple vehicles in the newspaper or outdoor location.
- The license plates are out-of-state, issued temporarily, are dealer tags, or missing altogether.
Licensed motor vehicle dealers:
- Must post their business license at their place of business and are licensed by the type of vehicle sales they conduct.
- The motor vehicle dealer may only sell from a licensed location.
- The dealer’s salesmen must also be licensed and can only sell for the dealer listed on their sales license. Salesmen must have their licenses when conducting sales and you may ask to see it.
Different licenses/different sales:
- Only a dealer with a new vehicle dealer’s license may sell a new car.
- A new car dealer may sell used vehicles and may sell vehicles to other dealers at wholesale prices.
- A used vehicle dealer may only sell used vehicles and may sell at wholesale prices to other dealers.
- A wholesale dealer may not sell vehicles to the general public.
