The following questions were submitted to John Roska, an attorney/writer whose weekly newspaper column, "The Law Q&A," ran in the Champaign News Gazette.
What do I have to do when I sell my car to someone? How much paperwork is required? Do I have to pay any tax?
The following applies to sales between private individuals. It’s different if you’re a dealer.
For a seller, the bare minimum is to sign the vehicle’s title over to the buyer. But you should also have the buyer sign a Bill of Sale, and cancel your insurance on the vehicle. You should also check to make sure your old title is cancelled. Don't transfer your plates along with the vehicle.
Transferring the title from seller to buyer requires the signatures of all co-owners. Spouses are the most common co-owners, but there’s all kinds. Whoever the co-owners are, they must all sign the title over to the buyer.
“Signing the title over” means signing on the “Assignment of Title” part on the vehicle’s title. The seller must also certify the vehicle’s mileage. Make sure the Vehicle Identification Number (VIN) on the vehicle matches the VIN on the title. It wouldn’t hurt the seller to keep a photocopy of the old title.
I’m told that on newer titles, there’s a detachable form the seller can fill out and mail to the Secretary of State, notifying them of the vehicle’s sale. That can protect against problems caused if the buyer doesn’t get a new title.
It’s the buyer’s job to get a new title. They submit the assigned title with an application for a new title (form VSD 190 from the Illinois Secretary of State), together with the Department of Revenue’s form RUT-50. Both forms are available from the Secretary of State.
The buyer must pay $95 to Jesse White, and a tax to the Department of Revenue. For vehicles worth less than $15,000, the tax is based on the age of the vehicle, staring at $390 for a one-year old vehicle, and ending with $25 for vehicles at least 11 years old. It’s only $15 if the transfer is between family members, like spouses, parents and children, and siblings.
To transfer their own license plates to their newly acquired vehicle, the buyer must pay another $25 to the Secretary of State.
It’s not required by any law, but it’s a good idea to have a Bill of Sale signed by both seller and buyer. That documents the fact that the vehicle was in fact sold, and can protect the seller from liability if the buyer wrecks the car before actually transferring the title into their name.
A Bill of Sale should identify the vehicle’s make, model, year, body type, color, VIN, purchase price, and date of sale. It should also name the seller and buyer, and their addresses. It should be signed by both seller and buyer, and each should get a copy.
It’s a good idea for the seller to get a copy of the buyer’s driver’s license or the ticket in place of their license. That can help prove the seller’s identity, if issues arise later.
Finally, if the seller determines that the buyer didn’t promptly get a new title, the seller should cancel the old one. That’s another way to protect against liability if the buyer wrecks the car. Use form DOP 159 from the Secretary of State.