A private sale, which is a transaction between two individuals rather than with any licensed business, is one of the simplest ways to buy or sell a used car. However, private sales are not entirely unregulated by the government. In California, there are certain legal requirements for both buyers and sellers in such transactions.
According to California law, any time a vehicle changes ownership the transaction is referred to as a transfer. This applies to inheritance, gifts and private sales alike. Therefore, no matter how much the buyer pays for a car in a private sale, including situations where no money changes hands, the laws for a vehicle transfer still apply.
One of the central laws to the California vehicle transfer process is transferring the title from the original owner to the buyer. To do this, both parties must sign the back of the original California title, which also includes a space to list the vehicle's mileage. If the original title is lost or missing, the seller will have to apply for a new title through the California DMV before completing the sale.
The buyer must take the completed title to a California DMV office to pay the transfer fee. As of March 2010, the California vehicle transfer fee is $15. The DMV will then mail a new title with the new owner's name to the buyer's home address.
In most cases, the buyer must present a smog inspection when applying for the title transfer. It is the seller's responsibility to provide the buyer with a smog inspection certificate that is less than 90 days old. The certificate must still be within 90 days of being issued when the buyer visits the DMV.
There are several cases where California law does not require a smog inspection certificate for a private vehicle sale. These include transfers of hybrid or electric vehicles, cars from model year 1975 of earlier, diesel-powered cars and cars that use natural gas for fuel and weigh more than 14,001 lbs. When a car is transferred between immediate family members, there is also no need for a smog inspection certificate.
Following a private sale, the buyer must also pay a registration renewal fee and a use tax. The use tax is based on the new owner's county and city of residence. The registration is based on the class and weight of the vehicle, and will automatically transfer the new registration into the new title holder's name. The new owner will receive a new registration sticker, which must be affixed to the rear license plate.
California law mandates that the license plates remain on a vehicle that is sold through a private sale. If the vehicle has custom plates, they transfer to the buyer along with the car itself. The buyer may apply for new license plates along with the registration renewal and transfer, but this will require an additional fee.
