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Car buyers, sellers should visit SoS together
APRIL 20, 2010
Secretary Land offers tips for private vehicle sales
Selling a car through the classifieds or from your front yard are simple ways of disposing of an unwanted vehicle. But Secretary of State Terri Lynn Land reminds residents that handling this transaction incorrectly could end with regrets, parking tickets, no sale or even lawsuits.
"Car buyers and sellers should work together to avoid headaches down the road," Land said. "Both parties need to know their legal rights and responsibilities. Buyers need to make sure the vehicle title is valid and free of liens. Sellers want to know they're no longer liable for the vehicle."
Land recommends that both the seller and buyer in private vehicle sales go together to a Secretary of State office within 15 days of the sale to have the seller's title transferred into the purchaser's name.
That way, each party knows the title transfer has been done properly to avoid possible future legal problems. Because Michigan law makes owners responsible for any property damage or injuries caused by their vehicles, ensuring the transfer happens correctly should be a priority for the seller.
If a joint visit isn't possible, the seller must keep a record of the sale. The record may be a photocopy of both sides of the assigned title or a document that includes the name, address, driver's license number and signature of the buyer, and also the vehicle's year, make, vehicle identification number, purchase price and date of sale. The seller must keep the sale record for at least 18 months.
All owners listed on the front of the title must sign off as the sellers before the title can be transferred. Additionally, the seller should complete the odometer statement and check whether the vehicle's mileage is actual, not actual, or if it exceeds the mechanical limits of a five-digit odometer. If a lien against the vehicle is listed on the title, the seller should get sign-off from the lienholder or include a lien termination statement.
When giving a vehicle to a charity, donors should keep a record of the transaction just as if they sold the vehicle. The charity must transfer the vehicle's title into its name unless it holds a used-vehicle dealer license.
After the sale, the seller should remove the license plate. Do not allow the buyer to use the plate, even for a short time. In some cases, sellers who allowed a buyer to drive off with the plate attached ended up receiving parking tickets generated by the buyer.
Under Michigan law, a vehicle purchased from an individual may be driven without registration to an initial location within three days of the sale. The driver must carry the properly assigned title and proof of no-fault insurance, and use the most direct route.
At a Secretary of State office, the buyer will be charged $15 for the title transfer plus a 6 percent use tax calculated from the purchase price or fair retail value. A $15 late fee is charged if the transfer is processed more than 15 days after the sale.
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