When selling a vehicle in South Carolina, it is crucial to have a solid understanding of the state-specific regulations that govern the process.
The South Carolina Department of Motor Vehicles (SCDMV) has specific vehicle sales guidelines highlighting the need for certain documents to ensure the transaction is conducted legally and efficiently. Moreover, the department requires notification of the sale to officially record the change of ownership and remove the seller's liability for the vehicle.
Besides the essential paperwork, sellers must be aware of any taxes due at the time of the sale and how these might affect the final transaction. They must also learn the proper way of advertising the vehicle and the ownership transfer procedures to avoid potential complications.
With knowledge of SCDMV guidelines and state-specific regulations, sellers can confidently navigate the vehicle sale process for a successful and legally sound transaction.
Legal Requirements Before Selling a Vehicle in South Carolina
Besides assuring that the vehicle is in good selling condition, sellers must satisfy several legal requirements before selling the car in South Carolina. These include preparing the title, obtaining a comprehensive vehicle history report, and advertising the vehicle.
Meeting these legal requirements allows sellers to proceed confidently with the selling process, promoting trust and compliance in the marketplace.
Prepare the Title
In South Carolina, preparing a title is a vital legal requirement prior to selling a vehicle. This requirement plays a critical role in the transaction process, as the title serves as a legally binding document that establishes the seller as the vehicle's rightful owner. Without a properly prepared title, the sale cannot proceed legally.
The significance of having the vehicle title in the transaction cannot be overstated. It assures buyers that they are purchasing a vehicle with clear ownership and without any undisclosed liabilities or encumbrances. In addition, the title protects the seller from potential legal issues arising after the sale, such as disputes over ownership.
If sellers do not have the title readily available, they can obtain a replacement or duplicate online, in person, or by mail.
To obtain a duplicate title online, one must follow the procedures outlined on the EZ Online Duplicate Title page.
For those wanting to acquire a duplicate title in person, visiting an SCDMV location with the following documents is necessary:
- Furnished Title Application Form
- Identification documents or one of the forms below:
- Agent Authorization for Title Pick-up Form (if a company sends someone to pick up the title on their behalf)
- Third-Party Title Pick-Up Form (if picking up a title for another person)
- Payment of $15
For those choosing to mail the application, the above documents must be sent to the following address:
SCDMV
Titles
P.O. Box 1498, Blythewood, SC 29016-0024
Note that the SCDMV offers same-day expedited duplicate titles for in-person transactions. However, this service requires an additional $20 expedited fee.
Obtain Vehicle History Report
Obtaining a vehicle history report (VHR) is essential when selling a vehicle in South Carolina.
A VHR offers critical insights into the vehicle's past, revealing any accidents or damages it may have incurred, identifying potential title issues such as salvage, total loss, or flood titles, and detecting odometer fraud. This report provides transparency regarding the vehicle's condition and history, fostering trust between the seller and buyer.
For sellers, a VHR aids in accurately pricing the vehicle based on its history and condition, preventing overpricing or underpricing. Providing a VHR also demonstrates to potential buyers that the car is reliable and well-maintained, boosting their confidence in purchasing.
Sellers can obtain a VHR by performing a vehicle identification number (VIN) check through the National Motor Vehicle Title Information System (NMVTIS) using approved third-party data providers. These typically require a VIN or license plate number and a service fee.
Alternatively, sellers can visit any SCDMV branch for assistance in acquiring a VHR.
Advertise the Vehicle
Sellers must adhere to state laws when advertising a vehicle in South Carolina for a legal and transparent transaction.
The South Carolina Unfair Trade Practices Act, outlined in the South Carolina Code of Laws Title 39 Chapter 5, explicitly prohibits unfair methods of competition and deceptive acts in any trade or commerce.
To comply with this regulation, sellers should exercise caution when creating vehicle advertisements. They must provide accurate and truthful information about the vehicle's condition, pricing, and any financing options available so that potential buyers are well-informed and not misled by false claims or misrepresentations.
Selling a Vehicle with a Lien in South Carolina
Selling a vehicle with a lien in South Carolina requires sellers to follow a specific process for a smooth and legal transaction.
Initially, sellers must proactively contact the lienholder, who typically holds the original title. They should communicate their intention to sell the vehicle and inquire about the necessary steps to transfer the title.
In most cases, the lienholder will require payment of the outstanding lien amount before the vehicle can be sold.
Sellers can pay off the loan themselves and obtain a lien release document from the lienholder. This document confirms that the lien has been satisfied, which enables them to transfer the title to the buyer.
Alternatively, sellers can allow the buyer to pay off the lien. In this case, both parties must complete Section F of the Title Application Form. By doing so, the seller becomes the lienholder for the vehicle, and the title will be mailed to them.
Once the lien is settled, sellers must complete the necessary paperwork to transfer the title to the buyer. This includes signing over the title and providing essential information such as the odometer reading, purchase date, and selling price.
Finally, sellers should remove the license plates associated with the vehicle and subsequently notify the SCDMV about the sale.
Motor Vehicle Sales Tax in South Carolina
Starting July 1, 2017, individuals purchasing motor vehicles in South Carolina are subject to a new fee structure instead of the traditional sales tax payment.
Under the South Carolina Code of Laws Section 56-3-627, individuals who buy or lease vehicles, trailers, semi-trailers, or other automobiles that will be titled and registered in the state will owe an Infrastructure Maintenance Fee (IMF) instead of the sales tax.
The IMF amount is determined by the purchase price, with individuals owing 5% of the purchase price, capped at a maximum of $500. For example, for purchases under $10,000, the fee is 5% of the sale price; for those at $10,000 or more, the IMF is fixed at $500.
Note that certain transactions in South Carolina are exempt from the IMF. These include:
- Items transferred to immediate family members, distributee, legal heir, or legatee
- Items transferred from a private individual to a newly formed partnership or from a stockholder to a newly formed corporation
- Items transferred to a licensed motorcycle or motor vehicle dealer for resale
- Items transferred to a financial organization for resale
- Items transferred as repossession to the secured party for resale
- Items transferred to the insurer for obtaining a salvage title
- The market value of an item transferred to the secured party or the seller in partial payment
- Exempted by Section 12-36-2120 from the use or sales tax
- Items where a use or sales tax has been settled
Who Pays Sales Tax When Selling a Car Privately in South Carolina?
In South Carolina, when a car is sold privately, the buyer is responsible for paying the IMF. As mentioned, the IMF is calculated based on the purchase price. This payment must be made during vehicle registration with the SCDMV.
Besides the IMF, buyers should also be mindful of other fees, such as registration and title fees.
Sales Tax for Vehicles Sold in South Carolina to Residents of Another State
According to South Carolina Code of Laws Section 12-36-930, sales tax exemptions apply to certain transactions involving non-residents. This code addresses explicitly selling tangible personal property in South Carolina, such as motor vehicles, to non-resident buyers intending to use the car exclusively outside the state.
Under this code, if a vehicle is sold to a resident of another state and will be immediately taken out of South Carolina for exclusive use elsewhere, the sale is exempt from South Carolina sales tax or the IMF.
However, if the vehicle is brought into or used within South Carolina for any period, it may be subject to South Carolina sales tax or IMF unless exempt.
Legal Requirements After Selling a Vehicle in South Carolina
The seller, together with the prospective buyer, must complete several legal obligations during and after the vehicle sale. These include providing an accurate odometer disclosure, transferring the title to the new owner, returning license plates, canceling vehicle registration and insurance, and notifying the SCDMV about the sale.
Fulfilling these requirements is important for both parties to finalize the transaction while upholding legal standards.
Odometer Disclosure Requirement
Aside from being a prerequisite for a title transfer, the odometer disclosure requirement in South Carolina is crucial for a transparent and fair vehicle sale.
By providing accurate mileage information, sellers empower buyers to evaluate the vehicle's condition and ascertain its value. Also, this requirement helps anticipate potential maintenance needs.
To comply with this requirement, the seller typically needs to provide a written disclosure of the vehicle's odometer on the certificate of title at the time of sale.
As of January 1, 2021, vehicles that are less than 20 years old are required to have odometer disclosure. However, there are exemptions from this mandate. These include:
- Vehicles with Gross Vehicle Weight Ratings (GVWR) over 16,000 pounds
- Non-self-propelled vehicles
- Low-speed vehicles without odometers
- Vehicles with odometers measuring hours instead of miles or kilometers
Title Transfer
Transferring the title is important when selling a vehicle in South Carolina. This process signifies that the ownership is transferred from the seller to the buyer, protecting both parties from potential legal and financial complications.
Upon selling the vehicle, the seller must endorse the title by signing it to the buyer and providing pertinent details on the back of the title, including the following:
- Odometer reading at the time of sale
- Purchase date
- Selling price
Besides that, the seller must sign the title. In cases where multiple sellers are listed on the title, separated by "or," only one must sign the title to facilitate the transfer to the buyer. Conversely, if the sellers' names are separated by "and," both sellers must sign the title before it can be transferred.
Once all required information is completed, the seller can pass the certificate of title to the buyer. With this document, the purchaser can proceed to apply for a new title in their name.
Do Both Parties Need To Be Present To Transfer a Title in South Carolina?
In South Carolina, both the seller and the buyer do not need to be present to transfer a title.
Once buyers obtain the furnished title from the seller, they can visit any SCDMV branch. They must then present the furnished title along with other required documentation and fees to officially transfer the title into their name.
License Plate Return and Cancel Vehicle Insurance
According to South Carolina law, the seller is responsible for removing the license plates from the vehicle before completing the sale. The plates should not be left on the car and must not be given to the buyer.
If the removed licensed plates are not transferred to another vehicle, sellers must return them promptly to the SCDMV. To do so, they must follow several steps.
First, they must complete the Notice of Vehicle Sold Form and the License Plate Turn-In Form. They must also cancel the South Carolina liability insurance on the sold vehicle.
After that, they must return the license plates along with the forms to any SCDMV branch or mail them to the following address:
SCDMV
Plate Turn-In
P.O. Box 1498, Blythewood, SC 29016-0024
Note that only active license plates can be returned.
How To Notify the South Carolina DMV of the Sold Car?
According to the South Carolina Code of Laws Section 56-3-1260, vehicle sellers in the state must inform the SCDMV when they transfer ownership of a vehicle.
To comply with this requirement, sellers must fill out the Notice of Vehicle Sold Form. This form asks for details about the vehicle, including its make, year, and identification number. It also needs the buyer's name, address, transaction date, and seller's signature.
Once the form is completed, sellers have two options for submission. They can either drop it off at any branch office or mail it to the following address:
SCDMV
Mail-in Registration
PO Box 1498, Blythewood, SC 29016-0036
It is important to note that completing this form does not legally transfer vehicle ownership. Its purpose is to protect the last registered owner until the buyer finalizes the actual transfer of ownership.