Specific rules regarding proof of insurance in a title transfer vary from state to state, and the laws may differ for private sales vs. dealership sales. Although your state may not require proof of insurance to change a car title in a private sale, dealerships and lenders typically require proof of insurance before transferring vehicle ownership.
A certificate of title
(or car title) is a legal document issued by the state that identifies the vehicle owner. A car title must be transferred any time the vehicle's ownership changes. Auto insurance requirements for a car title change vary by state and circumstance, but you can generally expect dealerships and lending companies to require proof of insurance—even if it’s not required in private sales. Here to break down the typical rules regarding title transfers is Jerry
, a reliable personal broker app
. Once we break everything down, we’ll even offer some tips for lowering your car insurance
rates. Do you need car insurance to do a title transfer?
Whether or not you need car insurance to do a vehicle title transfer depends on your state and the specific circumstances of the sale.
The vast majority of U.S. states require drivers to provide proof of insurance
before registering their vehicle with the Department of Motor Vehicles (DMV). Therefore, dealerships and lenders typically require proof of auto insurance before issuing a certificate of title. Lending companies may even take it a step further, requiring drivers to hold specific types of insurance, like a full-coverage insurance policy
with comprehensive
and collision coverage
. The rules regarding private sales are a little less clear. In private sales, including those that are cash-based, the state might ask the seller to show proof of insurance to transfer a car title. In other states, an active insurance policy may not be required to transfer a title, but will be required by the DMV office when you apply for license plates and/or vehicle registration.
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How do you transfer a vehicle title?
Transferring a car title
is a relatively simple process. The seller must release their ownership of the car by signing off on the current vehicle title. Additional information may be required depending on the state you live in, including:
A current odometer reading
Information about the buyer
The sale price of the vehicle
The vehicle identification number (VIN)
You or the buyer may also be responsible for a title transfer fee.
If the vehicle is titled to two owners, both will be required to sign the title before transfer. The signatures may need to be witnessed and notarized depending on your state’s exact laws.
If you are a private seller (or are buying a vehicle from a private seller), you can visit your local DMV’s website for exact directions on how to perform a transfer of ownership.
If you’re purchasing a vehicle at a dealership, they’ll handle the title transfer process by issuing you a new title. If you use a lender to purchase your new vehicle, the lender will likely hold the car’s title until you pay back your entire loan. If you’re looking to sell your car before the loan is paid off entirely, most states will require you to also include a lender affidavit.
What documents do you need to transfer a car title?
Specifics may vary by state, but—in general—the following documents will be needed to transfer a car title:
A completed title application or title transfer application.
The original title signed by the seller and re-assigned to the new owner.
Proof of insurance, if you’re purchasing your vehicle from a dealership and/or if your state requires it for private sales.
A copy of your driver’s license.
A bill of sale or invoice.
An odometer disclosure statement.
Similar documents may be requested if you need to request a duplicate title or a replacement title from the DMV.
How do you find cheap car insurance for your vehicle?
Even if your state doesn’t require proof of insurance when transferring a title, they’ll likely require proof of insurance before they allow you to register your vehicle. Fortunately, you can find the best insurance company for your driver profile by comparison shopping with Jerry
. A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.7/5 rating on the App Store and made it the top insurance app in the country.
“I was paying $350 a month for my new car. With Jerry
, I set up a new policy in under 30 minutes that will save me over $1,000 a year!” —Mariah K.
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