How to Transfer a Car Title in Michiganby Scott Krohn
In Michigan, the process of transferring ownership of a vehicle starts with making sure that all liens placed against the car have been satisfied and the certificate of title is clear of lien holders. With all liens vacated, transferring ownership is a matter of the buyer and seller providing required information on the title, submitting required documentation to a Michigan Secretary of State office and paying applicable fees and taxes.
Starting with a Clear Title
A vehicle that has a lien placed against it cannot be transferred to a new owner until the amount owed on the vehicle has been paid in full and the lien holder has been removed from the title. The most common type of lien is placed by institutions that provide financing for the purchase of vehicles. This type of lien will be removed once principle, interest and fees on the loan have been satisfied. The lender can release the lien by providing a signature from an authorized officer in the lien holder’s section of the vehicle title or with a statement written on company letterhead confirming that the loan has been satisfied. A second type of encumbrance in Michigan is referred to as a garage keeper’s lien, which can be placed for non-payment of repairs or storage of a vehicle. To remove this type of lien, the amount due must be paid, the lien holder provide a written release and the owner files the release with a Michigan Secretary of State office.
A seller can release a clear title by completing the Title Assignment by Seller section on the front of the title. Required information includes the name and address of the buyer, the purchase price and the date of the sale. The seller must also give the odometer reading and sign where indicated. The State of Michigan recommends that sellers keep a record of the sale for at least 18 months to show proof of the release of ownership if the buyer does not transfer the title. Documents that prove ownership include either a picture or photocopy of the assigned title or a bill of sale that lists the details of the transaction, along with the buyer’s signature.
In Michigan, the new vehicle owner completes the buyer’s section and signs where indicated. To ensure that ownership can be transferred, the Secretary of State office recommends that buyers examine the information provided by the seller for an accurate odometer reading, signature, date of transaction and purchase price. To transfer the title, buyers are required to submit the completed certificate of title to a Secretary of State office, along with the fee -- $15 as of June 2015-- to transfer the title and payment of a use tax, which is calculated at 6 percent of the purchase price. Michigan offers an instant title service for an extra $15. Otherwise, the certificate of title will be mailed to the new owner. Buyers have 15 days from the transaction date to transfer the title of the vehicle. If the transfer is not executed in the allotted time, a late fee will be charged.
Transferring a Gifted Title
The process of transferring the title on a vehicle that has been given as a gift is similar to a buy/sell transaction with the exception that gifts between family members are exempt from use tax. On the title, the person giving the vehicle completes the Title Assignment by Seller section and the recipient completes the information asked of the buyer. To assume ownership, the person receiving the vehicle as a gift can take the completed title to the Secretary of State office and pay the $15 transfer fee. The new owner can either pay $15 for an instant title or have the new title sent by mail.