Selling a vehicle in Mississippi involves more than a simple exchange of keys and money. State-mandated legal requirements must be met to complete the transaction successfully.
A crucial aspect of the legal process is transferring the vehicle's title. Mississippi Code Sec. 63-17-74mandates that the seller provide a clear title, demonstrating their legal ownership of the car. This title must be free of liens or encumbrances so that the buyer receives full ownership rights.
Additionally, the Mississippi Department of Revenue (MS DOR) enforces the legal obligation for sellers to provide accurate information on the vehicle's history. The requirement to disclose any known defects or issues with the vehicle promotes an honest transaction. This includes providing a complete and accurate odometer reading to prevent odometer fraud.
Non-compliance with these obligations can result in legal problems and penalties for sellers and buyers. Failure to adhere to regulations may delay or invalidate the sale, leading to inconvenience and potential legal ramifications. Sellers must understand and follow these regulations to conduct a fair and legal vehicle sale in Mississippi.
Legal Requirements Before Selling a Vehicle in Mississippi
Mississippi sellers must satisfy distinct legal prerequisites before transferring vehicle ownership. It is paramount to provide the required documents, such as the Certificate of Title, to authenticate ownership. Openly disclosing any known mechanical defects or cosmetic blemishes is also mandatory.
Fulfilling these legal obligations protects the interests of both seller and buyer, mitigating the risk of future disputes or legal complications.
Title Preparation
Before selling a vehicle in Mississippi, the seller must prepare the vehicle's title certificate to legally transfer ownership. This certificate is a crucial legal document proving ownership, so it is essential to complete it accurately and thoroughly for a smooth transfer.
In situations where the owner of the vehicle is unable to handle the title transfer in person, a Power of Attorney to Transfer Motor Vehicle (Form 78-003-21-8-1-000 Rev. 06/21) can be utilized. This legal document allows the owner to designate an agent, or "attorney-in-fact," to act on their behalf in the transfer process.
Obtaining a Duplicate Title
If the original title is damaged or lost, the seller must obtain a duplicate from the Mississippi DOR before the sale.
To request a replacement title, the seller needs to complete the Application for Replacement Certificate of Title (Form 78-006) with the vehicle identification number (VIN), license plate number, title number (if known), and current vehicle information. The seller must also provide their full legal name and address, as well as a valid driver's license or I.D. number.
After gathering this information, the seller can initiate the replacement request online, through mail, or in person at a local DOR office. In addition, an expedited "Fast Track" option using the Fast Track Application for Replacement Certificate of Title (Form 78-026) is available for a $39 fee, with processing typically completed within 72 hours.
Utilizing Certificate of Title Bond
If obtaining a duplicate title is not feasible, the seller may utilize a Title Bond (Form 78-016). The seller's ability to provide a valid title bond can allow the sale to proceed, even without the original title.
The title bond must meet the requirements outlined in the Mississippi Code, Sec. 63-21-23. Through the title bond, sellers offer a guarantee that protects buyers and future owners from financial loss due to potential defects in the vehicle's title history.
The bond covers expenses, losses, or damages due to the issuance of the title or any issues with the seller's ownership interest in the vehicle. It must be filed with the DOR within 30 days of its effective date using Form 78-016.
To obtain a title bond, the seller must contact a bonding company authorized to issue title bonds in Mississippi.
Completing the Title Certificate
The original or duplicate title certificate must be filled out correctly to ensure a legal transfer of ownership. The seller must include the buyer's full legal name and address, the odometer reading, and the sale date. The seller and buyer must both sign the title in the designated areas. If there is a lien on the vehicle, the lienholder must also sign to release the lien.
In Mississippi, sellers are not required to have the vehicle inspected or obtain a smog certificate before selling. However, it is a good practice to disclose any known mechanical issues to the buyer.
Vehicle History Report
The National Motor Vehicle Title Information System (NMVTIS) report serves as a comprehensive record of a vehicle's past. It includes detailed information about the title history and documents, as well as any changes in ownership or state registration.
Additionally, it tracks odometer readings, which ensures transparency about the vehicle's actual mileage. The report also discloses any total loss records for junk, salvage, or insurance, which provides crucial insights into the vehicle's condition and potential risks.
For sellers, it demonstrates transparency and can make the sale process smoother by addressing any potential concerns upfront. Sellers interested in obtaining an NMVTIS report can do so through approved NMVTIS data providers.
Vehicle Safety Inspection
In Mississippi, no vehicle safety inspection is mandated before selling a car. However, if the vehicle carries a "Salvage" designation on its title, a Salvage Inspection is required before it can be sold. Selling a salvage vehicle requires careful attention to the inspection process and associated documentation.
A "Salvage Title" indicates that an insurance company has declared a vehicle a total loss due to damage from collision, fire, flood, or other incidents. The Salvage Inspection ensures that the vehicle has been restored to its pre-damage condition.
To initiate the inspection, the seller must first gather all required documentation:
- Completed Application for Inspection of Salvage/Rebuilt (Form 78-021)
- Original Salvage Title or Retention Letter
- Original Invoices for All Parts
- Work Order Describing All Repairs
- Four Color Photos of the Vehicle (Before Repairs)
The seller must then submit the documents and a $75 inspection fee (certified check or money order) to the appropriate inspection station. The inspection will verify the vehicle's VIN, examine all documentation, and assess the quality of the repairs.
If the vehicle passes inspection, the seller will receive an inspection certificate, allowing them to proceed with the sale. If the car fails, the seller must address the issues identified and reschedule the inspection.
Selling a Vehicle with a Lien in Mississippi
In Mississippi, selling a vehicle with a lien necessitates specific procedures to legally transfer ownership. A lien indicates a debt owed on the vehicle, often to a lender or financial institution. The lienholder must release their interest before the sale can be finalized.
The seller can achieve this release in two ways. The first option is to pay off the remaining loan balance, satisfy the debt, and remove the lien. Alternatively, the lienholder can provide a letter of lien release confirming that the debt has been settled or that they no longer claim an interest in the vehicle.
If the seller cannot pay off the loan before the sale, obtaining a lien release statement from the lienholder is mandatory. This statement must be submitted to the Mississippi DOR to process the title transfer.
Furthermore, if the vehicle is sold while the lien is still active, the seller must complete and file the Affidavit of Sale Under Lien (Form 78-010). This form serves as a legal document outlining the terms of the sale and acknowledging the existing lien.
Motor Vehicle Sales Tax in Mississippi
The Mississippi DOR administers the state's motor vehicle sales tax. For sellers, understanding the tax rate and applicable exemptions is essential for accurate transaction processing.
The standard sales tax rate for most motor vehicles in Mississippi is 5%. This rate applies to the vehicle's net purchase price, which is the price after deducting any dealer discounts or trade-ins. Manufacturer rebates are not included in these deductions.
This 5% rate encompasses various types of vehicles, including:
- Cars
- Vans
- Buses
- Other private passenger carriers
- Trucks with a gross vehicle weight of 10,000 pounds or less
While most motor vehicle transactions are subject to sales tax, Mississippi offers specific exemptions under certain circumstances.
Sellers should be aware of sales tax exemptions to ensure accurate tax calculation and collection. In some Mississippi counties, a 1% local sales tax is added to the state sales tax. Sellers should confirm whether this additional tax applies in their county.
In Mississippi, the buyer is responsible for paying the motor vehicle sales tax, which must be paid at the time of registration. The seller must provide the necessary documentation to facilitate this process.
Legal Requirements After Selling a Vehicle in Mississippi
In addition to the pre-sale legal requirements, the seller must adhere to specific legal requirements both during and after the sale to fully complete the transaction. Here are the key points to remember:
Odometer Disclosure Requirement
Mississippi Code Sec. 63-21-15 mandates accurate odometer disclosure for the first ten years of a vehicle's life. Sellers must verify the odometer's functionality reflecting the accurate actual mileage driven. Tampering with the odometer, such as removing, resetting, or altering the mileage, is strictly prohibited unless performed by a licensed mechanic for repair purposes.
Sellers must accurately disclose the odometer reading on the Odometer Disclosure Statement (Form 78-015). Falsifying this information or using any device to manipulate the odometer reading constitutes a criminal offense. Consequences for such actions include fines, imprisonment, civil penalties, and potential license suspension for licensed dealers.
Ownership Title Transfer
During the sale of a vehicle in Mississippi, the seller must initiate the title transfer process to legally recognize the new owner.
This entails the seller completing the relevant sections on the back of the vehicle's title, specifically the "Assignment of Title by Registered Owner" section. This section requires the seller's printed name and signature, along with the buyer's printed name and address.
When the title lacks a designated space to document the purchase price, a separate bill of sale is necessary. The completed title and any additional required documents should be submitted to the appropriate office, which varies depending on the specific circumstances of the sale.
Title Transfer Purchased Out-of-State
If the vehicle was last registered out of state and the title is unavailable, Mississippi requires Form 78-013, Affidavit of Ownership of Motor Vehicle, to title and register the vehicle.
For vehicles acquired from an out-of-state dealer, the buyer initiates the title transfer by applying at their local county tax collector's office with a copy of the purchase or sales invoice.
Title Transfer Purchased from Mississippi Dealer
If the vehicle was purchased from a Mississippi dealer, the dealer is responsible for submitting the completed application for a certificate of title. However, when purchasing their license plate, the buyer must present the yellow copy of the title application at their local tax collector's office.
Title Transfer Purchased From a Deceased Owner
If the vehicle's owner is deceased, the new owner must apply for a new title at their local county tax collector's office. This application requires the submission of the existing vehicle title with a completed form 78-002 (Application for Certificate of Title).
Furthermore, additional documents may be required depending on the specific circumstances of the deceased owner's estate. If the deceased owner had a will, a court-endorsed copy is necessary. If not, the heirs may use the Affidavit of Heirship for a Motor Vehicle (Form 78-014) to transfer ownership and should take them to their local county tax collector's office.
Title Transfer Purchased from Immediate Family
When a vehicle is purchased from an immediate family member (spouse, child, parent, grandchild, or grandparent), an Affidavit of Relationship must be completed. This form, along with the other required documents, is submitted during the title transfer process.
Title Transfer Through Gift Declaration
Transferring a vehicle as a gift involves a process similar to a standard title transfer, with a few key distinctions. Acting as the donor, the seller must complete the "Assignment of Title by Registered Owner" section on the back of the vehicle title. This includes providing the seller's printed name and signature as well as the recipient's (donee's) printed name and address.
If the title does not have a designated space for indicating the purchase price, the seller should write "$0" or "Gift" on the title.
Alternatively, if there is no space available on the title for this information, a separate bill of sale must be completed, also indicating "$0" or "Gift" as the purchase price.
Along with the completed title and bill of sale (if necessary), the seller must submit the following documents to their local county tax collector's office:
- Form 78-002
- Form 78-015
- Affidavit of Relationship
- Sales Tax Exemption Affidavit
Upon receipt of these documents, the county tax collector's office will process the title transfer and issue a new title in the donee's name.
Bill of Sale
35 Mississippi Administrative Code Sec. 7-05-08-100 mandates a Bill of Sale as a supporting document when applying for a Certificate of Title. While some dealers may provide an invoice instead, it is recommended that sellers prepare a distinct Bill of Sale for the buyer's records and potential tax purposes.
A Bill of Sale in Mississippi is not always mandatory, but it is valuable documentation in certain situations. To ensure a comprehensive record of the transaction, the Bill of Sale must include the following specific details:
- The exact date when the vehicle ownership is transferred
- The accurate mileage of the vehicle at the time of sale
- The year, make, model, and VIN
- Any additional details about the vehicle's condition or features
- The full legal name and complete address of the seller and buyer
- The agreed-upon amount paid for the vehicle
- The legally binding signatures of both the buyer and the seller
By adhering to these requirements, sellers can create a comprehensive Bill of Sale that satisfies legal obligations and protects the interests of both parties involved in the vehicle transaction.
License Plates Removal
Selling a vehicle in Mississippi involves a legal obligation for the seller to remove the license plates before transferring ownership to the buyer. This action protects the seller from potential liability for any violations that may occur after the sale.
The removed plates must be returned to the local county tax collector's office. This step is crucial because Mississippi law registers plates to both the vehicle and the owner, requiring their surrender if either the vehicle or owner changes.
Returning the plates removes the seller's name from the vehicle's ownership records.
Insurance Cancelation
After selling a vehicle in Mississippi and returning the plates, the seller should promptly cancel their insurance coverage for the sold vehicle. This step is important to avoid continued premium payments on a vehicle they no longer own.
By contacting their insurance provider and informing them of the sale, the seller can cancel the policy, preventing unnecessary charges. This straightforward process helps the seller save money and removes their liability for any incidents involving the vehicle.
How To Notify the Mississippi DOR of the Sold Car?
In Mississippi, notifying the state DOR about a sold vehicle is straightforward and integrated into the title transfer process. Unlike some states, Mississippi doesn't have a separate form or system specifically for reporting a vehicle sale.
When a person sells their car in Mississippi, they effectively notify the DOR of the sale by completing the title assignment section on the back of the vehicle's title certificate. The seller should fill out this section accurately and completely. Once signed by both the seller and buyer, this becomes the official record of the sale.
After completing the title assignment, the buyer is responsible for submitting this document, along with a Bill of Sale, to their local county tax collector's office. This submission serves as the official notification to the state that the vehicle has been sold and ownership has changed.
It is important for sellers to understand that their responsibility doesn't end with just signing over the title. They should verify that the buyer completes their part of the process by submitting the necessary documents to the tax collector's office. This helps protect the seller from potential liabilities associated with the vehicle after the sale.