Twice recently, once via email and once via story comment, I have been made aware of problems signing over a title to a used car - problems that have made it difficult to register the used car - and asked how to sign over title.

Probably the most important step in the used car purchase is signing over the title. It is that piece of paper, above all others, that makes you the true owner of the used car and, on the other hand, releases you from the obligations assigned to you for the used car you are selling.

Once the title is signed over, you are no longer the owner of that vehicle.

Yet, as I said above, it's common for mistakes to be made when signing over title to a used car. Take your time when finishing the paperwork for a used car transaction to make sure everything goes correctly the first time. It is going to save you hours, if not days, of headaches down the road. There are other steps to take when completing a used car sale that will protect both the buyer and the seller.

You're probably going to encounter most problems when signing over a used car title from a private seller but that doesn't mean used car dealers don't make paperwork mistakes. You need to be just as vigilant in those transactions, too.

Advice on Signing Over a Used Title

1. Make sure the vehicle identification numbers (VIN) match up on the title to the vehicle you are purchasing. This step is more important than any other. You can find the VIN on the driver's side of the windshield.
2. Make sure the mileage matches up to the number on the title. The number on the odometer should not be below the last recorded mileage on the title without some proof of why this is. An unexplained lower number (without documented proof) is a sign the odometer has been tampered with and you do not want to buy this car.

1. Make sure there are no liens on the title. As explained over at biztaxlaw.D106, "If you purchase a car or truck for your business, a lien is placed against the value of the asset. Liens are discharged when they are paid off." A title that shows a lien, without documentation that is has been paid off, means the owner has no right to sell it to you.
2. Make sure it's clear who the new owner is. In both instances mentioned at the beginning, the seller wrote his name in the section where the new owner's name was supposed to go. In effect, the seller signed over the vehicle to himself. That creates a paperwork nightmare. When that happens, you have to stop the sales transaction. The seller needs to get a duplicate title or take other means to correct the mistake. DO NOT TAKE POSSESSION OF THE VEHICLE . I'm not one to type in all caps but I did that to reinforce the point. Otherwise, the onus is on you to fix the mistake and it's not your problem.
3. Get a bill of sale to go with your new title. It's going to make the transfer of ownership much simpler if you do that. It's another document that demonstrates your ownership of the vehicle.
4. Don't pay for a used car until you have a clean title that has been filled out correctly. This is a little tricky because the owner is going to want to know you can pay before signing over the title. Use your instincts on this. Maybe you turn over payment once your name is correctly filled out on the buyer's line. Don't let the seller fill out the paperwork incorrectly.

Unfortunately, once the paperwork is filled out incorrectly, there is no one set of advice that works in every situation because laws vary from state to state. It's important you have the bill of sale (complete with the VIN) if you have taken possession of the vehicle in addition to having the title signed over to you. Also, get a notarized statement from the seller about the error in paperwork and that it was his or her intent to transfer title of the vehicle. That could help make the process smoother.