In Arizona, specific regulations and laws govern the sale of vehicles. One critical regulation is the requirement to transfer the vehicle title to the new owner upon purchase. This is in Arizona Revised Statutes (ARS) Title 28, Chapter 10, which covers motor vehicle registration and titles. The law requires sellers to transfer titles to buyers within 15 days of sale.
Additionally, Arizona law mandates sellers to provide a valid and current emissions compliance certificate if the vehicle is subject to emissions testing. This requirement is part of the state's efforts to maintain air quality standards.
Furthermore, sellers must disclose to the buyer any known defects or issues with the vehicle. This includes mechanical problems, prior accidents, or other relevant information that could affect the vehicle's value or safety.
Sellers in Arizona must follow these regulations to avoid potential fines or legal complications and ensure a smooth and lawful vehicle sale process.
Legal Requirements Before Selling a Vehicle in Arizona
When preparing to sell a vehicle in Arizona, sellers must follow several legal requirements and steps mandated by the Motor Vehicle Division (MVD) of the Arizona Department of Transportation (ADOT). These include:
Duplicating a Title
When selling a vehicle in Arizona, the seller must have a valid certificate of title. This requirement is outlined in ARS Section 28-2058. If the original title is lost, damaged, or becomes illegible, the vehicle's owner can apply for a duplicate title.
The process is straightforward – the owner must access their AZ MVD Now online account and request a duplicate title. The fee for this service is $4. All information on the duplicate, such as the owner's name, lienholder details, legal status, and vehicle information, must remain the same as the original. Only the address and vehicle location can be updated.
Alternatively, Arizona residents can obtain a duplicate title in person at an MVD office or an authorized third-party driver's license location.
Having a Paper Copy of the Title
When selling a vehicle in Arizona, having a physical paper copy of the title can facilitate a smoother transfer of ownership to the buyer. If the state maintains the seller's title electronically, they can request a printed version to use during the sale.
To obtain a paper copy, the record owner must apply for a title replacement through the Title Replacement service on the AZ MVD Now website. This service costs $4.
Alternatively, the owner can apply for a title replacement by mail by completing a Title and Registration Application form and checking the box for a title replacement. Regardless of the number of owners, only one owner's signature is needed. The completed application should be mailed to the address provided:
Motor Vehicle Division
PO Box 2100
MD 555M
Phoenix, AZ 85001
Note that processing times for mail-in applications may take up to six weeks. The fee for the paper title replacement service by mail is also $4.
Emissions Inspection Requirements
When individuals in Arizona are selling a vehicle in the Phoenix or Tucson metropolitan areas, they must be aware of the emissions inspection requirements. The specific requirements may vary based on the vehicle's type, model year, fuel type, and weight.
However, there are exceptions to this rule. Vehicles that are five years old or less, manufactured in 1966 or earlier, or classified as electric cars are typically exempt from the emissions testing requirement.
To ensure compliance with these regulations, visit myAZcar.com.
Getting a Vehicle History Report
Obtaining a vehicle history report is essential for successfully selling a vehicle in Arizona. This report provides buyers with important information about the vehicle's past, including accident history, service records, and ownership changes. It helps build trust and can speed up the selling process.
Sellers can purchase a vehicle history report from websites like CARFAX or AutoCheck. Additionally, eligible individuals can obtain and print a copy of the report online through the AZ MVD Now system.
Another option is to complete a Motor Vehicle Record Request form and submit it, along with the required fee of $5 for a certified record (covering a five-year driving history) or $3 for an uncertified record (covering a three-year driving history), by mail or at any AZ MVD office or authorized third-party location.
The form must be witnessed by an MVD agent or notarized to be valid.
Advertising the Vehicle
In Arizona, sellers must follow specific regulations when advertising vehicles for sale. These guidelines are outlined in ARS Section 28-4415.
Motor vehicle dealers have certain permissions regarding advertising particular vehicles, but brokers face stricter limitations.
Dealers can advertise and offer for sale any vehicle physically located at their established place of business. Alternatively, they can promote a car by disclosing the precise street address and business hours where potential buyers can inspect it. Dealers may also advertise vehicles directly available from manufacturers or distributors at the time of advertisement.
Brokers, however, cannot advertise or offer any specific motor vehicle for sale or exchange. Their advertising capabilities are limited to promoting their services for arranging or assisting in purchasing new cars from dealers.
Brokers can specify the makes and models they work with, but they must clearly disclose their broker status and state that all arranged sales are subject to price and availability from the selling dealer.
Selling a Vehicle with a Lien in Arizona
Selling a vehicle with a lien in Arizona requires following specific procedures to ensure a smooth transfer of ownership. A lien is a legal claim or encumbrance on a car, typically resulting from a loan or outstanding financial obligation.
In Arizona, sellers must disclose any existing liens on the vehicle before proceeding with the sale. The state's MVD provides an online service on the AZ MVD Now system that allows individuals or potential buyers to check for liens and unresolved financial obligations on Arizona-titled vehicles.
If a financial lien exists, it will either be listed on the paper title or held electronically. The seller must obtain a lien release from the lender upon paying off the loan, which then allows for a clear title transfer. For electronic liens, the lienholder will send an electronic message to the MVD, releasing the lien once satisfied.
Other types of liens, such as those for unpaid child support or court fines, can also prevent the transfer of the title until those obligations are settled.
Motor Vehicle Sales Tax in Arizona
In Arizona, individuals who purchase a vehicle and plan to register it in the state may owe use tax. The state use tax rate, also known as the state transaction privilege tax (TPT) rate, sometimes called sales tax in Arizona, is 5.6%, and there is no county use tax.
However, city use tax rates vary by location, and individuals can look up the applicable rate using the Arizona Transaction Privilege Tax Look Up Tool provided by the Arizona Department of Revenue (ADOR).
The MVD is legally required to collect use tax at the time of title transfer or registration, and the ADOR will collect any remaining balance owed.
Individuals can use the Vehicle Use Tax Calculator on the ADOR website to determine their use tax liability. The calculator considers factors such as any sales or excise tax paid at the time of purchase and the value of any trade-in vehicle or manufacturer's rebate.
Who Pays Sales Tax When Selling a Car Privately in Arizona?
When selling a vehicle privately in Arizona, the transaction is considered a casual sale between individuals, and neither the buyer nor the seller is responsible for paying sales tax or use tax. This exemption applies specifically to private party sales, where the vehicle is not sold through a licensed dealership or business.
Instead of collecting taxes, the primary requirement for both parties in a private vehicle sale is to transfer the ownership and registration of the vehicle properly. The seller must provide the buyer with a properly signed-over title, and the buyer must then register the car in their name with the AZ MVD.
While private-party vehicle sales in Arizona are exempt from sales tax, the buyer may still be responsible for paying other fees and taxes associated with the registration process, such as registration fees and vehicle license tax.
Sales Tax for Vehicles Sold in Arizona to Residents of Another State
When selling a vehicle in Arizona to a resident of another state, the sales tax or TPT requirements can vary depending on the buyer's state of residence and its tax laws.
Arizona provides certain exemptions or reduced tax rates for vehicle sales to non-residents under specific conditions.
If the buyer's home state has a lower state tax rate than Arizona's 5.6% TPT rate and offers credit for taxes paid in Arizona, the buyer may only need to pay their home state's tax rate instead of Arizona's full TPT. However, city privilege tax may still apply unless the vehicle is delivered out-of-state.
Residents of states with no sales or excise tax are exempt from paying Arizona's state TPT and county excise tax on vehicle purchases, regardless of delivery location.
To qualify for these exemptions or reduced rates, the non-resident buyer must provide proper documentation, such as a completed Arizona Form 5011, a 90-day non-resident registration permit, and a copy of their out-of-state driver's license.
Legal Requirements After Selling a Vehicle in Arizona
During or after a vehicle sale in Arizona, sellers must follow several legal requirements to ensure a proper transfer of ownership and protect themselves from potential liabilities. These requirements revolve around odometer disclosure, transferring the title correctly, removing license plates, and notifying the state's MVD about the sale.
Odometer Disclosure Requirements
The ARS Section 28-2058 also outlines that sellers must adhere to specific odometer disclosure. It ensures accurate mileage reporting during vehicle sales transactions and is essential for title transfer.
For vehicles from the 2010 model year and older, an odometer disclosure is mandated for the first ten years of the vehicle's life. However, effective January 1, 2021, federal odometer rules changed the disclosure requirement for newer models. Cars from the 2011 and newer model years require an odometer disclosure for the first 20 years.
For example, someone selling a 2009 model-year vehicle must provide an odometer disclosure until 2019, which marks ten years from that model year. Meanwhile, for a 2018 model-year vehicle, the odometer disclosure is necessary until 2038, covering the 20-year disclosure period.
Once a vehicle surpasses the required 10-year or 20-year timeframe based on its model year, an odometer disclosure is no longer mandatory for subsequent sales or title transfers involving that vehicle.
Transferring the Title to the New Owner
Properly transferring the title to the new owner during a vehicle sale in Arizona is a crucial step. To begin, the seller must sign the back of the vehicle's title and have their signature notarized. This step verifies the seller's ownership and authorizes the transfer.
The seller must hold onto the signed and notarized title until the buyer has paid for the vehicle in full. Handing over the title before receiving payment could result in the buyer legally owning the car without the seller being compensated.
If the vehicle had a lien or loan attached, the seller must also provide the buyer with a lien release document from the lender, confirming that the debt has been satisfied.
After receiving the signed title and any necessary lien release, the buyer can then take these documents to an AZ MVD office or an authorized third-party location to officially transfer the title into their name. Alternatively, the buyer can complete the title transfer process electronically through the eTitle Transfer system on the AZ MVD Now website.
Removing the License Plates
The seller should remove the license plates from the car before transferring ownership to the new buyer. They have two options for handling the plates: either destroy them or contact the AZ MVD to transfer them to another vehicle they own.
When selling a car, the seller retains ownership of the license plates and has the choice of what to do with them. However, ensure not to leave the plates attached to the vehicle when handing it over to the new owner. Failing to remove the plates could lead to potential issues or liabilities for the seller if the new owner operates the vehicle with those plates still attached.
How To Notify the Arizona MVD of the Sold Car?
When selling or transferring vehicle ownership in Arizona, it is essential to notify the AZ MVD of the sale promptly. This can be done for free by completing a Sold Notice through the AZ MVD Now online system.
Submitting a Sold Notice helps protect the previous owner from potential liabilities that could arise if the new owner uses the vehicle for criminal activities, gets into an accident, receives traffic tickets, or abandons the car (which could result in a $500 fee).
Additionally, within 30 days of selling the vehicle, the previous owner can request a refund for any remaining registration fees they had already paid. This request can be made through the AZ MVD Now system after completing the Sold Notice.
Applying for the refund immediately is advisable, as the refund amount decreases the longer the previous owner waits. The refund is calculated based on the remaining time left on the vehicle's registration expiration date.