Thinking about purchasing a new car? Use our new Car Loan Calculator to estimate your monthly car payment!

How to Transfer Equity on a Car Title

by Liz Tomas

A transfer of equity can only be done when there is an open lien or loan on the vehicle in question. The equity refers to he difference between the value of the item and the amount left on the lien. The owner wishes to sell the car but all parties must be made aware of the lien. This situation tends to occur when you have more debt on the vehicle than the vehicle value. This transfer of equity does not remove the lien.

Contact the lien holder to obtain her permission for the transfer of equity and car sale. This permission should be in the form of a document. The lien holder permission will substitute the lien release paper normally used when transferring a title. For permission to be granted, the buyer must pass a credit check and be approved by the lien holder, as if he were applying for a car loan.

Sign and date the car title. Have the buyer sign and date the car title as well. Have a witness sign the title. The lien holder may require that all paperwork be signed at the lien holder's place of business. Ensure that everyone involved in the transaction has a copy of the signed paperwork.

The lien holder, seller and buyer must fill out a transfer-of-equity form. Alternatively, the new buyer can sign the original security agreement.

Submit the transfer of equity form and assigned title to the clerk of courts in the buyer's county of residence. For a successful transfer, the deputy clerk will stamp the transfer of equity or security agreement. This step is normally done by the lien holder.

When the sale goes through, the new owner will take over paying the lien. Once the equity has been paid off, the lien holder will release the title to the car owner.

Items you will need

About the Author

Liz Tomas began writing professionally in 2004. Her work has appeared in the "American Journal of Enology and Viticulture," "BMC Genomics" and "PLoS Biology." She holds a Master of Science in food science from Cornell University and a Bachelor of Science in biochemistry from the University of New Hampshire. She is pursuing her Ph.D. in oenology at Lincoln University.

More Articles