Selling a vehicle in Utah involves legal, financial, and practical considerations for sellers and buyers. Utah Code Section 41-1a-705 specifies who may legally sell, offer for sale, or display for sale vehicles, vessels, and outboard motors. It also outlines the requirements for new owners to obtain titles and for current owners to properly transfer titles.
To facilitate a safe and smooth transaction that protects both parties from potential legal disputes and financial liabilities, it is essential to adhere to the legal requirements when selling a vehicle in Utah.
Legal Requirements Before Selling a Vehicle in Utah
The legal requirements for selling a vehicle in Utah as a private seller are fewer than those for dealerships. However, it is beneficial to consider the buyer's perspective and prepare the necessary paperwork. While not all documents are mandatory, sellers are advised to have the following:
Certificate of Title
A vehicle title serves as crucial proof of ownership. Hence, sellers must possess it before proceeding with a sale. Its absence may indicate that the vehicle is stolen or encumbered by liens.
If the title is lost, damaged, or destroyed, the seller must obtain a duplicate title. To apply for a Utah duplicate title, applicants must provide the following:
- Most recent registration
- License plate number
- Vehicle identification number (VIN)
- Odometer reading
- Lienholder information
Applicants may submit their request online through the Utah Motor Vehicle Portal (MVP) or by mailing the completed form TC-123, Application for Utah Duplicate Title to:
Division of Motor Vehicles
Mail and Correspondence
P.O. Box 30412
Salt Lake City, UT 84130
A $6 duplicate title fee applies, payable by credit card, check, or money order. The Utah Division of Motor Vehicles (DMV) will release the duplicate title within 10 to 14 business days of receiving the application.
Vehicle History Report
In Utah, sellers are not legally required to provide a vehicle history report, but offering one can enhance buyer confidence and streamline the transaction process. Sellers must, however, accurately disclose the vehicle's condition and history when selling.
A vehicle history report contains critical information about a car's history from its initial sale to the present. It includes details such as title statuses, reported accidents, and odometer readings that influence the buyer's decision to purchase a vehicle.
The National Motor Vehicle Title Information System (NMVTIS) provides access to vehicle history reports. Buyers can request this document during negotiations as part of the sale agreement.
Safety Inspection Report
A safety inspection report is an official document that certifies a vehicle has undergone a thorough inspection and complies with Utah's established safety standards.
As of January 1, 2018, most private vehicles in Utah no longer require safety inspections, except for some instances, such as salvage vehicles, vehicles with branded titles, and vehicles used for commercial purposes.
However, it is advisable to ensure that the vehicle is safe to operate on public roads and complies with specific safety regulations. This includes checking basic safety features such as brakes, lights, tires, and seatbelts.
Emission Certificate
An emission inspection is only required for vehicles with model years less than six years old that are registered in the following counties:
- Salt Lake
- Davis
- Utah
- Weber
- Cache
Sellers are not legally required to provide an emission certificate for the vehicle. Still, buyers may request this document as part of their due diligence, especially if they are residents of the counties mentioned.
Cars made in years ending with an even number are inspected during even-numbered calendar years. Conversely, vehicles manufactured in odd-numbered years undergo emission checks in odd-numbered years.
An emission inspection is conducted once every two years. It can be completed at any On the Spot Renewal Station location.
Selling a Vehicle with a Lien in Utah
A lien on a vehicle signifies that a lender or creditor has placed a legal claim or encumbrance on it as collateral to secure a loan or debt owed by the borrower or owner. The lender, who extends credit or provides the loan, becomes the lienholder upon accepting the vehicle as collateral.
A lien is typically reflected on the vehicle's title. This indicates that the lender has a security interest in the car until the loan is fully repaid. If the borrower defaults on the loan, the lienholder retains the right to repossess the vehicle to recover the outstanding debt.
Before the sale, the owner must either clear the loan or find a buyer willing to take over the loan.
When owners find it challenging to locate a buyer willing to pay off the loan, trading the car at a dealership may appear the easiest choice, although it generally yields less money than a private sale.
When the owner owes more on the loan than the current value of the car, the trade-in amount may fall short of the loan balance. Consequently, owners must bridge the gap between the trade-in value and the remaining loan amount.
The following steps are necessary to remove a lien from a vehicle:
Loan Payment
The seller should contact their lender to obtain the exact payoff required to clear the loan, including the principal loan amount, accrued interest, and other fees. Once paid in full, the seller should receive payment confirmation from the lender.
Lien Release Document
After paying off the loan, the lender will typically provide a lien release document. The seller is responsible for requesting this document, which states that the loan has been satisfied and the lender no longer has a claim on the vehicle. The document should include details such as the seller's name, lender's name, VIN, and a statement that the lien is satisfied.
Title Update
With the lien release document in hand, the seller needs to visit their local Utah DMV office. They must submit a completed Form TC-656, Application for Utah Title, along with the lien release document and pay any required fees to process the title update.
The DMV will process the application and issue a new title that no longer shows the lienholder's name. This process typically takes several weeks. Once the new title is received, the seller should verify that all information is correct and that the lienholder's name has been removed.
Motor Vehicle Sales Tax in Utah
In Utah, sales tax rates for motor vehicles vary by city but generally range from 6.35% to 9.35%. These taxes are calculated based on the net purchase price specified in the bill of sale, with the buyer responsible for payment when titling and registering the vehicle at the Utah DMV.
Out-of-state residents buying a vehicle in Utah may be exempt from paying Utah sales tax if the car is titled and registered in another state. To verify the buyer's non-resident status, the seller typically checks their out-of-state driver's license and ensures the vehicle will be registered elsewhere.
If the non-resident buyer plans to register the vehicle out-of-state and provides proof, such as an out-of-state address and transportation arrangements, the sale may qualify for exemption from Utah sales tax.
Non-resident buyers can obtain a temporary permit from the Utah DMV, valid for 30 days, to legally transport the vehicle to their home state. Upon registration in their home state, buyers are responsible for complying with their state's tax laws, including applicable sales tax rates and regulations.
Legal Requirements After Selling a Vehicle in Utah
After agreeing on a price and transferring ownership of a vehicle, several legal requirements must be fulfilled to ensure that both the seller and buyer meet their obligations and safeguard their interests.
The following steps are essential after the selling of a vehicle in Utah:
Provide Vehicle Title
The seller is required to provide the buyer with a title within 48 hours of the transaction. This document, signed by the seller, contains information regarding the vehicle's make, model, and 17-digit VIN.
Provide Bill of Sale
A bill of sale is a legal record of a vehicle transaction between two parties. While Utah law does not explicitly require a bill of sale for private vehicle transactions, it is highly recommended for both buyers and sellers.
A bill of sale serves several important purposes. First, it provides a clear record of the transfer of ownership, which can be crucial in resolving any future disputes. Second, it helps release the seller from potential liabilities associated with the vehicle after the sale.
Third, it documents the vehicle's purchase price, which is essential for the buyer when calculating and paying the required sales tax during registration. Additionally, some local offices in Utah may request a bill of sale as part of the titling and registration process.
Sellers and buyers can handwrite a bill of sale or use a computer to type and print it. However, if the document is handwritten, ink rather than pencil is essential to ensure its permanence and legibility.
The Utah DMV has provided TC-843, Bill of Sale, as a template for this document. The bill of sale must include:
- Buyer's name and address
- Seller's name, address, and signature
- Complete vehicle description, including the VIN
- Details of any trade-in, if any
- Vehicle purchase price
- Trade-in allowance, if applicable
- Net purchase price
Provide Odometer Disclosure Statement
Utah Code Section 41-1a-902 mandates that in the sale or transfer of a vehicle, a written odometer disclosure statement using the form TC-891, Odometer Disclosure Statementmust be furnished to the buyer.
The buyer must acknowledge receipt of the statement by signing it, and both the buyer and the seller should retain a clear copy. The original odometer statement must be submitted to the Utah DMV when registering and titling the vehicle.
The Odometer Disclosure Statement contains the following information:
- The vehicle's odometer reading at the time of transfer
- The date when the transfer occurs
- The seller's (transferor's) name and address, or their agent's details if it is a company
- The buyer's (transferee's) name and address, or their agent's details if it is a company
- The vehicle's specifics: make, model, year, body type, and VIN
- A declaration that confirms whether the odometer reading is accurate, beyond the odometer's mechanical limits, or inaccurate mileage
Failing to provide an odometer statement or violating its regulations constitutes a Class B misdemeanor. Installing a device that alters odometer readings or knowingly selling a vehicle with tampered mileage is classified as a Class A misdemeanor.
Issuing a false odometer statement, resetting or tampering with an odometer, or knowingly selling a vehicle with an altered odometer is considered a third-degree felony.
Report Vehicle as Sold
Notifying the Utah DMV of the sale of a vehicle should be promptly done to protect the seller from future liabilities associated with the car and ensure accurate records at the DMV.
A vehicle can be reported as sold online through the Utah MVP website or by phone at 1-900-DMV-UTAH. Alternatively, the report can be submitted by mail or fax by sending a written notification to:
Division of Motor Vehicles
MVCC
P.O. Box 30412
Salt Lake City, UT 84130
Fax: (801) 297-3570
The written notification must include the following information:
- Vehicle year
- Make
- Plate
- VIN
- Owner's signature
Remove License Plate
Utah Code Section 41-1a-701, effective until January 1, 2025, outlines that the registration expires when a vehicle's legal ownership is transferred, and the license plate must be removed.
This measure protects the seller from liabilities for any future parking or traffic violations associated with the vehicle. Within 20 days of the title transfer, the seller must either send the old plate to the Utah DMV for destruction or reassign it to another car, following Utah DMV regulations.
In Utah, a license plate belongs to the owner, not the vehicle, so it can be transferred from another vehicle the seller owns or returned to the DMV. If the plate is being transferred as part of the sale or ownership release, the new owner must apply to the Utah DMV to reassign it to their name.
Cancel Insurance
After notifying the DMV and removing the license plates, the seller should contact their insurance provider to cancel the vehicle's coverage. This prevents the seller from paying for insurance on a car they no longer own.
Additionally, the seller should ensure that the buyer is not paying for any continuing services associated with the old car. This includes canceling electronic toll passes, radio subscriptions, in-vehicle safety/security systems, and any other services attached to the vehicle.