How to Buy and Sell a Car in Texas: A Complete Guide
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Are you buying or selling a car in Texas? It isn’t as simple as swapping cash for the vehicle and calling it a day. There are legal steps you must follow.
Noncompliance could result in unexpected fines for the buyer. Meanwhile, the seller could be held liable for tickets or even crimes committed with the car if the paperwork isn’t done right.
In this guide, you’ll learn the steps and documentation for buying or selling a car privately in Texas. You’ll also get valuable tips to ensure the transfer process is smooth and meets legal requirements.
The Key Steps in Buying and Selling a Car in Texas
1. Price Your Car for Sale: Tips for Sellers
Here’s what to do when selling a car in Texas for the best possible return:
- Research the market value: Check local used car listings to see how similar models are priced.
- Use online car appraisal tools: These tools calculate car value based on year, make, model, mileage, and depreciation.
- Factor in added value: Does your vehicle have extras like a new sound system, leather upholstery, and new tires? Use them to justify your asking price.
2. Determine Essential Documents for a Successful Car Sale in Texas
Important documents for a car sale in Texas include:
- Vehicle title: Proves the seller is the legitimate owner
- Bill of sale: Provides evidence of purchase and sale; create your own Texas bill of sale form
- Form 130-U: Records change of vehicle ownership. It’s also known as the Application for Texas Title
- Vehicle Transfer Notification: Notifies TxDMV that the seller is no longer the car owner
3. Verify the Title and Vehicle History for Buyers
When buying a used car, the last thing you want is to make a final decision without knowing all the vehicle details. Checking the title and car history reveals the insights you need.
- Check title history: Find the vehicle identification number (VIN) on the car’s title. Next, select one approved title check provider to run the VIN and generate a title report. The report shows previous owners and whether the vehicle has ever been in a junkyard.
- Get the vehicle history report: Use the same VIN and provider to get the vehicle’s maintenance and repair records.
4. Understand Taxes, Fees, and Registration as a Buyer
What are the Texas used car taxes and fees?
| Tax/Fee | Details | Amount |
|---|---|---|
| Texas sales tax | Applies to vehicles bought inside the state | 6.25% of buying price |
| Use tax | Paid when you buy a car outside Texas | 6.25% of purchase price |
| Registration fees | Vary with car type and weight | $50.75 (passenger vehicle weighing 6,000 lbs. or less) |
| Vehicle title transfer fees | Amount depends on your county | $33 (emission-compliant counties)
$28 (non-emission compliant counties) |
| Gift tax | Texas car donation | $10 |
5. Understand Title Transfer Requirements and Process for Both Parties
Requirements for Texas title transfers include:
- Complete the title assignment section (at the back of the original title). Before signing the title, both parties should ensure details like the odometer reading, date of sale, and the buyer’s full legal name and address are entered accurately.
- Collect and submit the required documents. The buyer obtains the necessary documents and submits them to the local county tax office. These include a duly filled title, Form 130-U, and a bill of sale.
- Pay fees and taxes. The buyer pays motor vehicle sales tax plus title, registration, and local fees that may vary by county.
- Get New Vehicle Title: In Texas, a vehicle title application for the buyer takes at least 20 business days to process.
License plates are transferable, but registration stickers must be removed after the sale.
Common Mistakes To Avoid in the Buying and Selling Process
Blunders to avoid when buying or selling a vehicle include:
- Not researching the vehicle’s current market value: Sellers might price the car too high and scare off potential buyers. Meanwhile, buyers could end up paying more than the car is worth.
- Hiding serious car issues: Buyers may walk away if they spot the problems or even take legal action.
- Not checking the car’s title history: The buyer risks purchasing stolen property or a vehicle with accident damage.
- Not confirming the title transfer: Buyers could face ownership disputes, while sellers might still be liable for the car.
Finalizing the Sale: What To Do After the Transaction
If you sell your car to a licensed motor vehicle dealer, the title stays in your name until they sell it to someone else. To protect yourself from any liability afterward, submit a Vehicle Transfer Notification online on the TxDMV website within 30 days.
As a buyer, double-check the registration details to avoid ownership disputes later. Is the car officially under your name? The new vehicle title should show that you’re the owner.
Protect Your New Purchase with the Right Car Insurance
An insurance policy protects your vehicle from accidents, theft, and damage. But not all providers are good for you. Auto insurance varies a lot by zip code and driver profile.
The best way to get the right coverage is to compare options tailored to your needs. With EverQuote, you can evaluate insurance providers in your area for free in just a few minutes. Get a custom comparison of insurance options today to choose the most suitable provider.