A Texas independent dealer’s obligation to transfer title on behalf of the customer is a serious matter and an important part of the service you provide. This chapter will introduce you to the basics of transferring titles in Texas. Let’s begin with a quick overview of a dealer’s duties.
When a Texas dealer sells a vehicle, they must transfer the title to that vehicle into the name of the buyer. This is required by law. A dealer can get into a lot of trouble for allowing the customer to title and register the vehicle on their own. As a dealer, it is YOUR RESPONSIBILITY to title and transfer the vehicle in the customer’s name.
There are some exceptions to this rule.
Refer to your TxDMV dealer manual, which lists a few additional exceptions. Note that this chapter will deal only with the scenarios where YOU are responsible for transferring the title.
So, what exactly does transferring a title mean for you?
It means that you will complete and provide various documents to a county tax assessor collector’s office. We’ll get into those documents throughout this section. You may choose to use webDEALER, the TxDMV’s web-based application that allows dealers to electronically submit title applications to counties. Check with your local tax assessor for more information.
For the purpose of this course we will assume you are physically submitting your application to transfer and register at the tax office. Title transfers can take place at the tax office where your dealership is domiciled, where the vehicle is encumbered, in the county the customer resides, or in any county willing to accept the transfer.
As we discussed earlier, to avoid penalties, you must transfer the title within 30 calendar days of the date of sale. (Buy-here, pay-here dealers who have applied to defer sales tax have 45 days to transfer.)
So, where do you start? Every title transfer transaction will require a minimum of two documents.
The first document is what we call “evidence of ownership.” This document is almost always going to be the existing title to the vehicle. This course will focus specifically on the Texas Certificate of Title.
The second document is the Application for Texas Title and/or Registration, also known as the Form 130-U. This form will identify the buyer and seller and contain all of the information about the sale that the county will need in order to issue a new title in the name of the customer. This form is available at the county tax office and online at www.txdmv.gov. Your dealer management software programs should include the 130-U.
Many transactions will require some additional documentation. We’ll walk you through a few of the more common additional documents associated with transfers. These are often the things that can make transferring titles somewhat tricky.