Selling a car in New Hampshire can be daunting. However, it can become straightforward if one understands and adheres to the legal requirements associated with vehicle selling.
The New Hampshire Division of Motor Vehicles (DMV) plays a crucial role in regulating vehicle sales within the state. It sets forth the requirements that sellers must understand and comply with when conducting these transactions.
Among the responsibilities of sellers are completing and signing the title, providing a bill of sale, and ensuring that all necessary documentation is in order. The NH DMV also requires the seller to remove the license plates from the vehicle and not to hand them to the buyer.
Following the rules and regulations of selling a car in New Hampshire is a legal obligation that protects both the buyer and the seller. It helps prevent future disputes and affirms that the vehicle's ownership is transferred correctly and efficiently.
Legal Requirements Before Selling a Vehicle in New Hampshire
When selling a vehicle in New Hampshire, sellers must not only prioritize the vehicle's good condition but must also fulfill several legal requirements. Among the legal prerequisites that sellers must meet before selling a vehicle include preparing the title and bill of sale, obtaining a vehicle history report, and advertising the vehicle effectively.
Meeting these requirements is an excellent way to find a buyer and build trust in the transaction. Besides that, sellers can avoid any hassles during the sale process and avoid potential legal hindrances.
Prepare the Vehicle Title
Preparing a title is a crucial step for vehicle sellers, not only in New Hampshire but also in other states.
The title is a vital document proving the seller's legal ownership of the vehicle. It gives prospective buyers confidence that the seller has the rightful authority to sell the car.
Moreover, the title is a required document for transferring ownership. It must be properly assigned to the buyer, which enables them to register the vehicle under their name.
In the unfortunate event of a lost, stolen, or destroyed title, individuals can obtain a duplicate from the NH DMV. Keep in mind that once a duplicate title is issued, the original title becomes invalid. Also, only the vehicle's current owner can request a duplicate title for that specific vehicle.
To request a duplicate title, the current owner must submit the following documents to any NH DMV location:
- A completed Duplicate Certificate of Title Application (TDMV 18)
- Money order or check for the duplicate title fee of $25
- Release of Lien or Other Encumbrances (TDMV 20A), if applicable
If visiting an NH DMV office is not feasible, interested parties can mail the required documents to the following address:
NH Dept. of Safety
DMV - Title
23 Hazen Drive, Concord, NH 03305
After the department receives and verifies the application, a duplicate title will be processed and sent to the vehicle owner within five to ten calendar days.
Prepare a Bill of Sale
A Bill of Sale or the Report of Sale or Transfer of a Non-Titled Motor Vehicle (TDMV 22A) is not mandatory for most private-party vehicle transactions in New Hampshire. However, it becomes essential if such transactions involve title-exempt vehicles.
Vehicles under the title-exempt category typically include those from the model year 1999 or older. If an individual is selling cars that fall under this category, they must prepare a Bill of Sale for a seamless and legally compliant transaction.
The Bill of Sale functions similarly to a certificate of title for these older vehicles. Since title-exempt vehicles do not have a title, it serves as the primary evidence of ownership. Moreover, it is needed when transferring the ownership of title-exempt vehicles from the seller to the buyer.
Obtain Vehicle History Report
While not required by law, vehicle sellers in New Hampshire are strongly advised to acquire a vehicle history report (VHR) before selling a vehicle.
A VHR comprehensively documents a vehicle's past. It contains information regarding ownership history, accident records, title status, odometer readings, and any liens or recalls.
This document is helpful for sellers as it demonstrates transparency and honesty. It allows them to provide potential buyers with accurate information about the vehicle's history, which builds trust and increases the chances of a successful sale.
Also, since this report reveals any previous accidents, damages, or major repairs that the vehicle has undergone, sellers can avoid potential disputes with buyers to secure a smoother transaction.
Besides that, a VHR helps sellers determine the fair market value of their vehicle, considering the information about the vehicle's mileage, ownership history, and any previous issues.
There are several ways to obtain a VHR. Interested parties can get one by availing the services of commercial providers like Carfax and AutoCheck. Typically, these services require a vehicle identification number (VIN) and a fee.
Aside from obtaining a VHR, individuals can acquire other motor vehicle records from the NH DMV. To obtain these records, they must follow the procedures outlined in the Online Motor Vehicle Record system or fill out a Release of Motor Vehicle Records (DSMV 505) and submit it to any NH DMV office or mail it to the address provided in the form.
Advertise the Vehicle
Private vehicle sellers in New Hampshire must advertise their vehicles to find prospective buyers. However, sellers must keep in mind the state's advertising policies when doing so.
According to New Hampshire Revised Statutes Section 358-A:2, using unfair methods of competition or engaging in deceptive acts or practices in the conduct of trade or commerce within the state is unlawful. Therefore, sellers must approach their advertising efforts with integrity and transparency.
To comply with these regulations, sellers should provide accurate and detailed information about the vehicle they are selling. This includes the make, model, year, mileage, and vehicle condition. Refraining from making exaggerated claims or misrepresenting the vehicle's attributes is also vital, as this could potentially mislead prospective buyers.
Selling a Vehicle with a Lien in New Hampshire
Before selling a vehicle with a lien in New Hampshire, sellers must contact the lienholder, typically a bank or financial institution, to discuss settling the lien. This can typically be accomplished by utilizing the funds from the vehicle sale or arranging a separate payment with the lienholder.
Once the lien is settled, the lienholder releases the title to the seller. The lienholder will also include a document about the release of the lien, often in the form of TDMV 20A.
With these documents, the seller can proceed with the sale and transfer the vehicle title.
During the transfer of the title, the seller must fill out the assignment section on the back of the title. This properly assigned title, along with the release of the lien document and any other required paperwork, must then be handed over to the buyer.
After that, the seller must remove the license plates from the vehicle and notify the New Hampshire DMV of the sale.
Motor Vehicle Sales Tax in New Hampshire
New Hampshire is one of the few U.S. states that does not impose a general sales tax or a motor vehicle sales tax. Hence, motor vehicle transactions that occur in the state do not require paying a sales tax on the vehicle's purchase price.
Despite this lack of sales tax, individuals must acquaint themselves with the requirement to register the vehicle with the NH DMV, which entails various fees.
Since the vehicle registration process in New Hampshire is twofold, individuals must pay the city or town fees and the state fees. Also, other charges may apply during this process, such as license plate fees or temporary registration fees.
Who Pays Sales Tax When Selling a Car Privately in New Hampshire
As mentioned, private car sales in New Hampshire are not subject to sales taxes, which means that both the seller and the buyer are exempt from this financial obligation.
Instead, the fees associated with the registration are applicable, which are generally the buyer's responsibility. These fees are settled when buyers or the new owner apply for the vehicle title and registration in their name and when obtaining license plates.
Sales Tax For Vehicles Sold in New Hampshire to Residents of Another State
There are a few key points to consider regarding sales tax for vehicles sold in New Hampshire to residents of another state.
Unlike many other states, New Hampshire does not impose a sales tax on motor vehicle purchases. Therefore, if residents of another state buy a vehicle in New Hampshire, they will not be required to pay any sales tax. However, they must pay the applicable registration fees if they register the car in New Hampshire.
On the other hand, if residents of another state register the vehicle in their home state, they must pay the applicable sales tax there. The exact amount varies depending on the tax rate of the state where they reside. Thus, it is advised to contact the state's relevant department or tax authority to determine the precise sales tax amount.
Legal Requirements After Selling a Vehicle in New Hampshire
If a private seller in New Hampshire has identified a prospective buyer for a vehicle, both parties must fulfill further legal obligations to finalize the transaction. These include:
Complying With the Odometer Disclosure Requirement
In New Hampshire, sellers must adhere to the odometer disclosure requirements outlined in the Federal Truth in Mileage Act of 1986 when selling a vehicle. This law mandates that sellers provide the purchaser with a written disclosure of the vehicle's mileage registered on the odometer during the sale or the transfer of ownership.
For sellers, this disclosure is crucial not only for law compliance but also to help prevent odometer fraud.
For buyers, receiving an accurate odometer disclosure is important for evaluating the vehicle's condition. It can help them estimate potential maintenance needs and make informed purchase decisions.
Failure to provide accurate odometer disclosure can result in legal consequences for sellers. If a buyer discovers that the mileage was misrepresented after the sale, they have grounds to take legal action against the seller for misrepresentation or fraud.
To comply with this requirement, sellers must complete the appropriate section on the back of the vehicle title. In cases where the certificate of title does not have sufficient space for disclosure, sellers can utilize the Odometer Disclosure Statement Form (TDMV 12) provided by the NH DMV.
Note that the odometer disclosure requirement applies to all vehicles model year 2011 or newer, self-propelled vehicles, and automobiles with registered weights of 16,000 pounds or less. Vehicles that do not meet these criteria are generally exempt from this requirement.
Transferring the Vehicle Title
Transferring the title to a new owner is essential when selling a vehicle in New Hampshire. This step confirms that the legal ownership of the car is properly transferred to the buyer.
To successfully transfer the title, the seller and buyer must complete the appropriate section on the back of the vehicle title. Both parties must provide their legal names, addresses, signatures, the date of the sale, and the odometer reading. The seller must also attach the lien release document if a lien is recorded on the vehicle.
Once these requirements are met, the seller can give the buyer the title and other relevant documents.
When selling a title-exempt vehicle, the process for transferring ownership is slightly different.
In this case, the seller must provide the buyer with a properly executed Bill of Sale or form TDMV 22A. This document should include important information such as the vehicle's model, make, type, odometer disclosure, and the seller's legal name and signature. The buyer must also fill out certain sections of this form, including their name and signature.
Once all the necessary information is completed, the buyer can take the form and any other required documentation from the seller.
With the title or form TDMV 22A and other documentation in hand, buyers can visit any NH DMV location to register the purchased vehicle in their name.
Do Both Parties Need To Be Present To Transfer a Title in New Hampshire?
In New Hampshire, both parties typically do not need to be present to transfer a vehicle title. As long as sellers have done their part by filling out and signing the appropriate sections on the title or bill of sale, they can transfer it to the buyer. The buyer is then responsible for visiting an NH DMV office to apply a title for their name to officially and legally finish the ownership transfer.
Removing the Plates and Canceling the Vehicle Insurance
The seller must follow specific steps regarding license plates and insurance after they sell a vehicle.
Once the transfer is complete, the seller must promptly remove the license plates from the vehicle. The license plates remain the seller's property, and it is the buyer's responsibility to obtain new plates from the NH DMV.
Failure to remove the plates may make the seller liable for any violations that occur after the buyer takes possession of the vehicle.
In addition to removing the license plates, sellers should cancel the vehicle insurance immediately. Continuing to pay for insurance on a vehicle no longer in their ownership is unnecessary and can be a financial burden.
To cancel the vehicle insurance policy, sellers should contact their insurance provider and inform them about the sale and their desire to cancel the policy. The insurance provider will then guide sellers through the official process of terminating the policy.
Notifying the New Hampshire DMV of the Sold Car
Notifying the NH DMV of the sold car is paramount for several reasons.
By notifying the NH DMV, sellers can officially transfer the ownership to the buyer and avoid any future confusion or disputes regarding ownership. It also means that the seller is no longer responsible for any accidents, violations, or other issues related to the vehicle that may arise after the sale.
To effectively notify the NH DMV, sellers must complete the Report of Sale or TDMV 22A form and submit it to any NH DMV office. This document should include crucial vehicle information, such as the make, model, year, and VIN. It must also feature details about the buyer and seller, an odometer disclosure, and the date of sale.