What Are the Laws for Selling Cars in California?

by Jordan Meyers
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No matter how much you like your car, there's no guarantee you will want to keep it forever. The time may come when you want to sell it. If you're selling it in California, there are certain laws you'll need to learn before you get started.


One of the most important aspects of transferring legal ownership of your car to another person is signing Line One of your title. If there is a lien holder for your vehicle, such as a vehicle-loan company, it will have to provide its authorized signature on Line Two. In California, one of the most important laws involves reporting the sale of your car to the California Department of Motor Vehicles (DMV). You must do this within 5 days of the sale. The DMV provides a form you can fill out, which is called a Notice of Transfer and Release of Liability. You can find it on the California Department of Motor Vehicles website. This form should be mailed to the following address:

Department of Motor Vehicles Notice of Transfer and Release of Liability P.O. Box 942859 Sacramento, CA 94259-0001


If you do not report the sale of your car to the Department of Motor Vehicles, you are taking on some risk. The records for the vehicle aren't updated unless you either notify the DMV or the new owner gets a new title. This means you could be financially liable if an accident were to occur before either of these things took place. In such a situation, you could be considered the legal owner of the vehicle, even though you had sold it.

Time Frame

Another law that governs the selling your car involves smog certification, and is based on the age of your car. According to the California DMV, this only comes into play if you are selling a car that is more than 4 years old. In such a case, you'll have to provide smog certification to the buyer. However, there are some exceptions to this rule. If you are transferring the title of your vehicle to a person in your family, you are not required to provide such certification. Likewise, you do not have to provide it if your registration has been renewed in the last 3 months.


According to California law, you may sell your car even if you cannot find the title to your vehicle. To do so, you'll need to apply for a duplicate title through the DMV. You'll need to request this duplicate title and complete the application process before you finalize the sale of your car.


It is a misconception that the laws in California are the same whether you're selling one or two cars or selling cars for a living. To sell cars as a business, you'll need to apply for a dealership license through the Department of Motor Vehicles. You'll also have to meet a range of requirements involving such issues as where you'll sell the cars and the type of signage you'll use on your lot. You'll also need occupational and business licenses. You may even have to provide a surety bond, which is a type of contract that gives consumers a way to get money back from you if you commit fraud or fail to follow car-selling laws.

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