The Smooth Road to Transferring Car Ownership: A Step-by-Step Guide

Ensuring a smooth transfer of ownership when buying or selling a vehicle is crucial for both the seller and the buyer. Firstly, it legally shifts responsibility of the vehicle, protecting the seller from potential liabilities incurred by the new owner. Secondly, it also prevents any unexpected surprises, like unpaid fines or fees, from popping up later.

If ownership of the car, motorcycle, trailer or caravan isn’t properly transferred, the seller may still be considered the legal owner. The buyer might struggle to register the vehicle, obtain insurance, or even sell it in the future. In some cases, it can also result in disputes over ownership.

A smooth transfer guarantees peace of mind and a trouble-free ride for both parties. 

Understanding Ownership Transfer of Car and Other Vehicles

Vehicle ownership transfer refers to the legal process of transferring the ownership rights and responsibilities of a motor vehicle from one individual or entity to another. 

Transfer of vehicle ownership is necessary when: 

• Selling or buying a vehicle
• Gifting a vehicle
• Otherwise transferring a vehicle to another person or organisation 

To complete a vehicle ownership transfer, various documents and procedures are typically involved. Completing the ownership transfer process correctly is essential to:

• Ensure that both the seller and the buyer have clear legal rights and responsibilities regarding the vehicle
• Ensure the new owner can obtain insurance for the vehicle
• Allow the new owner to transfer vehicle registration 
• Ensure the buyer is the rightful legal owner of the vehicle, so that they can sell it in the future should they choose to

When Should the Ownership Transfer of a Vehicle be Completed?

It’s in the best interest of the buyer and seller to complete the transfer of ownership sooner rather than later. The time period allowed for submitting the application for transfer of ownership can differ between states. But in general, in Australia, it’s within 7 to 14 days of the sale of a vehicle. 

If the transfer of ownership is left longer than the set gracing period for your state, it may mean: 

• Registration may be suspended or cancelled, and the new owner will have to re-register the vehicle.
• There may be a late transfer fee to pay.
• The seller is at risk of being found responsible for accidents or fines related to the vehicle still under their name.

Vehicle Registration in Australia

In Australia, it’s the responsibility of the vehicle owner to ensure that their vehicle is registered in the state or territory in which they live. 

For all vehicles you intend to drive on the road, it’s imperative to maintain an up-to-date registration. While registration typically requires an annual fee, many jurisdictions offer the flexibility to pay in instalments, such as quarterly or half-yearly. Furthermore, if you’re considering purchasing a secondhand vehicle, it’s essential to ensure the registration is promptly transferred to your name.

Vehicle registration plays a crucial role in various aspects of car ownership and usage. It can be employed to trace a vehicle, especially in instances related to red light or speed camera violations. Most importantly,  the registration of a vehicle is intrinsically linked to its insurance. 

How Does Vehicle Registration Differ From Ownership Transfer? 

Vehicle registration relates to the legal authorisation allowing a vehicle to be operated on public roads. This process involves officially recording a motor vehicle with the government and the pertinent authorities.

On the other hand, ownership transfer is the process of altering the legal ownership of the vehicle, transitioning it from one party to another.

What is a Vehicle Identification Number? 

A Vehicle Identification Number (VIN) is a unique alphanumeric code assigned to every motor vehicle when it’s manufactured. The VIN serves as a distinctive identifier for the vehicle and contains specific information about its make, model, year, country of origin, and more. 

The Role of the VIN in Car Sales 

The Vehicle Identification Number plays a pivotal role in pinpointing a vehicle’s specific details and its comprehensive history. Beyond simple identification, the VIN is essential for processes such as vehicle registration transfer, transitioning ownership, and for insurance-related purposes.

Understand Your Local Regulations

The transfer process is relatively straightforward, but some details differ between states and territories, so ensure you know the specific guidelines for where you live. Different rules apply when buying a car from interstate, or when buying or selling an unregistered vehicle. 

Required Documentation

Make sure you can supply the documents that are required in your state or territory. Usually this includes: 

• • The transfer forms: The correct forms as declared by the transport body of your state/territory.
  • Proof of identity: Such as driver’s licence or passport of both the seller and buyer.
  • Certificate of registration: If the car is currently registered.
  • Roadworthy certificate: If required by your state or territory.  
  • Proof of ownership: The person selling the car should have documentation (such as a registration certificate) to show proof of ownership.  
  • Safety and emissions certificate: If required by your state or territory.
  • Bill of sale: Typically includes information such as the price paid, date of sale, and personal information of both buyer and seller. 
  • Change of registration forms: The buyer is usually responsible for updating the registration details with the relevant state authority.  

How to Transfer Car Ownership

Step 1: Gather Required Documents

• Make sure you’ve collected the necessary documentation, and have the details you need from the other party. 

Step 2: Check Eligibility and Restrictions

• • Seller’s eligibility: To be eligible to sell a car, the seller generally needs to be the registered owner of the vehicle and possess the vehicle’s title or registration certificate.
  • Buyer’s eligibility: The buyer must meet the legal requirements for vehicle ownership, such as having a valid driver’s licence and being eligible to register the vehicle in their name.
  • Roadworthiness: In many states, the vehicle must be roadworthy to be legally sold or transferred. This may involve obtaining a roadworthy certificate, which verifies that the vehicle meets safety and emissions standards.
  • Vehicle history report: It’s often worth running a vehicle history report before buying a secondhand vehicle to ensure there is no undisclosed finance owed on the car. 

Step 3: Visit a Service Centre

• In some cases, and depending on the guidelines in your state, buyers and/or sellers may need to visit a service centre to submit a transfer of vehicle ownership in person. 

Step 4: Complete Transfer Forms

It’s important that you fill out the forms correctly to ensure a smooth transfer process. 

• Confirm the forms: Check with your local service centre or online to ensure you have the correct forms for your state or territory. 
• Buyer and seller information: Ensure both parties have filled out their sections of the relevant transfer forms. 
• Correct information: Make sure all the details on the forms are accurate, including personal information for both buyer and seller, VIN, registration details and other relevant information. 

Step 5: Pay Transfer Fees

There are usually transfer fees associated with ownership transfers. 

• Service centre: If you submit the transfer forms in person, you will likely be able to make a payment then. 
• Invoice: In some states, you will be mailed an invoice for the transfer fee, which usually needs to be paid within 28 days. 
• Online: Many transfer fees and other associated costs of ownership transfer can be paid online. 

Transferring Car Ownership Online

In many cases, both the registration and ownership of a car or vehicle can be transferred online, presenting a host of advantages for those who qualify for this digital option. 

One of the primary benefits is the ability to bypass the often lengthy queues at service centres, granting individuals the flexibility to manage the transfer from the comfort of their homes. On top of this, the typical grace period for transferring ownership after the sale of a secondhand vehicle ranges from 7 to 14 days. In comparison, transferring online is usually much faster.

It’s worth noting that in some situations, you may not be eligible to transfer car ownership online. These may include:

• State of driver’s licence: Usually, you need to have a valid driver’s licence for the state in which you’re in to be able to submit online. 

• Multiple owners: Online transfer of car ownership is usually only possible if it’s currently owned by only one person, and there is only one new owner. 

• Unregistered: The vehicle must be currently registered to qualify for online transfer of ownership. 

• Personalised plates: In the instance of personalised plates, you will usually not be eligible for online vehicle transfer.

• Transfer car ownership NSW: In New South Wales, the seller must lodge a Notice of Disposal (NOD) before the buyer can transfer ownership online. If the NOD is not lodged, the buyer can visit a service centre. 

Transfer Fees and Costs

The fees associated with vehicle ownership transfer in Australia can vary by state and territory and are subject to change. However, here are some common fees that may be associated with transferring vehicle ownership in Australia: 

• Transfer fee: A one-time fee for processing the transfer of ownership from the seller to the buyer. This will often increase if paid outside of the gracing period. 

• Stamp duty: Stamp duty is a state tax that is generally based on the purchase price of the vehicle. The rate can differ across states and territories.

Exemptions or Concessions 

In some circumstances, you may be exempt from paying the transfer fee and/or stamp duty when buying a secondhand vehicle. Check your local transport authority to find out if you qualify for an exemption. 

Heavy Vehicles

There are often unique requirements for the transfer of ownership of heavy vehicles. In most cases, you will be required to visit your local service centre to complete the necessary steps. In most instances, a heavy vehicle is classified as such if it has a gross vehicle mass of over 4.5 tonnes. 

Interstate Registered Vehicles

In Australia, motor vehicles need to be registered in the state or territory where the owner resides and where the vehicle is primarily located. The specific requirements and processes for transferring registration may vary between states and territories. It’s essential to check with the relevant transport authority in your location to ensure compliance with local regulations if you plan on buying a car from interstate.

Stress-free Transfer of Vehicle Ownership

When selling or buying a car, it’s important to be aware of the transfer of ownership guidelines and registration requirements in your specific location. Make sure both the buyer and the seller are aware of what’s required of them to ensure a smooth transfer of ownership of the vehicle without delay.

If you’re looking to sell your car online, then the best place to do that is through Gumtree. As one of Australia’s best-loved online marketplaces, Gumtree offers sellers the ability to connect with buyers all over the country. Or maybe you’re looking to buy a second hand car online? Make sure you read our essential guide on purchasing a second hand car to find out everything you need to know to find your perfect used car online.