Whether you live in the outskirts of Upper or Lower Peninsula, or live in a city like Detroit, Ann Arbor or Ypsilanti, if you are thinking about privately selling your used car or truck, you’ve come to the right place. With an estimated 3 million registered trucks and cars in the state of Michigan, it is no wonder that thousands of private car owners from the Wolverine State have used Autotrader to sell their car. Below, we’ve outlined the 5 steps required to sell a car in the state of Michigan. Remember, most U.S. states consider the vehicle title a legal document which is why it is advised to use the legal names (no nicknames) of both parties involved along with legible handwriting using a black or blue ink. Mistakes, errors and using correction fluid may void the document so be careful and take your time filling it out.
Step 1: Allow the buyer to have the car inspected by a third party
Step 2: Organize and gather all related vehicle documentation
Step 3: Bill of Sale
Step 4: Transfer the title
Step 5: Remove your license plates and notify the DMV
Most vehicle shoppers who buy a car privately should get a pre-purchase vehicle inspection conducted by a qualified and licensed auto mechanic of their choosing. Although the buyer pays for this inspection, the seller and buyer must agree on when and where the inspection is to be held. If the inspection does find any issues with the car, it is a good idea for you as the seller to keep the report for your records.
Find all maintenance records, owner’s manual and other paperwork related to the vehicle. If you can provide the buyer with extensive and detailed maintenance records, this will help provide the buyer with confidence that you’ve maintained the car in a proper and regular manner. These may be paper documents or electronic records from your local shop or dealership.
Although not legally required in Michigan, a Bill of Sale should include the following information:
A Bill of Sale can be helpful if problems arise when the buyer goes to transfer the title or register the vehicle in their name. Many private vehicle owners notarize their Bill of Sale as a best practice. Under Michigan law, a seller is not liable for any damages or a violation of law that subsequently results from the use of ownership of the vehicle by the purchaser if the owner maintains a Bill of Sale proof as noted above.
In Michigan, the mileage for vehicles older than ten years old does not need to be provided when ownership changes. Private vehicle transactions in Michigan require a 6% tax due on the full purchase price or fair market value of the vehicle, whichever is greater. The Michigan Department of Treasury administers the collection of the tax. No taxes are due if you purchase or acquire a vehicle from an immediate family member. Vehicles gifted between immediate family members in Michigan are also exempt from sales tax if certain conditions are met. All other vehicle sales between non-immediate family members are subject to taxes. If the vehicle is being gifted, the seller should still indicate a purchase price of $0.00 on the Bill of Sale. If you inherit a vehicle from an immediate family member, no tax is due.
If the vehicle’s title has been lost or stolen or badly damaged, you’ll need to apply for replacement title. and pay the any related fees prior to selling the car. If the vehicle’s owner has passed away, vehicle ownership is inherited according to a pre-defined list which Michigan has defined here. If the vehicle owner is deceased and the estate is not probated, the surviving spouse may transfer the vehicle into their name. A title cannot be transferred until the vehicle loan has been fully paid. If there is a lien, it must be released by the lienholder in the appropriate signature space. You also may attach a lien termination statement from the financial institution to the title.
Michigan private vehicle sellers must complete their part on the title assignment by signing it and adding:
If there is more than one owner named on the front of the title, all owners must sign. The buyer should enter their legal name, current address and signature in the buyer’s section of the title. If both buyers are not able to sign together at a DMV branch office, use the Appoint of Agent form provided by Michigan’s Secretary of State.
After the sale the vehicle, the title will remain in the seller's name until the buyer submits the seller's assigned title and applies for title in their (the buyer's) name. This is why most sellers and buyers meet at a DMV branch office and process a title transfer application in person, otherwise you could be held liable for their actions. If you can’t meet the buyer in person, Michigan provides instructions on how to document proof of the vehicle sale.
Unless the license plate is transferred to another vehicle, before you complete the sale, take your license plates off the vehicle. Never allow the buyer to drive off with your plates. Michigan law allows buyers of a recently purchased vehicle without license plates to drive it directly home within three days of the sale but they need to have the title assigned in their name and proof of insurance. If you do not plan to transfer the license plate to replacement vehicle, destroy or recycle the plate.
Yes. Unless the license plate is transferred to another vehicle, either destroy or recycle the license plate. Never allow the buyer to drive off with your plates on the vehicle.
A vehicle Bill of Sale is not legally required in Michigan when transferring a vehicle between private individuals.
There are several documents which sellers of vehicles will need: