Selling a vehicle in Kansas involves more than just finding a buyer and exchanging keys for money. It also requires a thorough understanding of the state-specific regulations to ensure a smooth and legal transaction.
According to Kansas Statutes Section 8-135, sellers must adhere to specific requirements when selling and transferring vehicle ownership. One essential obligation is providing the buyer with a properly assigned title. This document serves as proof of ownership and is crucial for the buyer to register the vehicle in their name.
Additionally, sellers are responsible for removing the license plates from the vehicle and notifying the Kansas Department of Revenue (DOR) about the sale. This step safeguards the seller from any liability and obligations related to the car.
Understanding and complying with these regulations is of utmost importance for sellers in Kansas. Failure to do so can result in penalties or delays in processing the sale, causing significant inconvenience for both parties involved.
Legal Requirements Before Selling a Vehicle in Kansas
In Kansas, vehicle sellers must fulfill certain legal obligations before the sale to guarantee a lawful transaction. These obligations include preparing the title, obtaining a vehicle history report, and advertising the vehicle properly.
By adhering to these requirements, sellers comply with regulations and provide prospective buyers with clarity and peace of mind.
Prepare the Vehicle Title
Having a title is essential when preparing to sell a vehicle in Kansas. This legal document serves as proof of ownership and is required to transfer the vehicle's ownership to a new buyer. Furthermore, this document legitimizes the transaction and expedites the sale by establishing trust between the parties involved.
Sellers can request a duplicate if the title is lost, damaged, mutilated, or illegible. The DOR handles these duplicate title applications in person and by mail.
A visit to a local County Treasurer's Office is necessary for those wanting in-person applications. Applicants must bring a furnished Application for Duplicate/Secured/Reissued Title Form, including details such as the vehicle year, make, identification number, owner name, and current odometer reading.
In addition, applicants must be prepared to pay the current replacement fee, which is $10.
If one prefers to request a duplicate title by mail, a completed Application for Duplicate/Secured/Reissued Title Form is needed and send it, along with a $10 check, to the address below:
Department of Revenue
Titles and Registrations
P.O. Box 2505, Topeka, KS 66612
Upon receipt of the application, the replacement title is typically issued within 40 days. If there are any delays, applicants can contact the Titles and Registrations department directly at (785) 296-3621 after six weeks from submission for updates.
Obtain Vehicle History Report
Sellers should consider obtaining a vehicle history report (VHR) when selling a vehicle in Kansas. Although not mandated by law, having a VHR is crucial for a transparent transaction.
A VHR offers comprehensive details about the vehicle's background, including its maintenance history, accident records, mileage verification, and any outstanding recalls.
By sharing this information, sellers can build trust and minimize the likelihood of post-sale issues. They can also accurately price their vehicles and set realistic expectations for potential buyers. Conversely, prospective buyers can assess the possible wear and tear of the car and feel confident in their decision.
Obtaining a VHR is a relatively straightforward process. Sellers can acquire these reports through reputable third-party services, which usually require a fee and a vehicle identification number (VIN).
Alternatively, sellers can seek assistance acquiring a vehicle history report by visiting any DOR station.
Advertise the Vehicle
In Kansas, specific regulations govern the proper way of advertising a vehicle for sale for clarity and fairness in consumer transactions. According to Kansas Statutes Section 50-626 of the Consumer Protection Act, specific guidelines must be followed to avoid deceptive practices in advertising.
Firstly, advertisements must accurately represent the vehicle being sold. Any claims regarding the vehicle's condition, mileage, features, or history must be truthful and substantiated.
Additionally, sellers must disclose important information that could affect a consumer's decision to purchase the vehicle. This includes any known defects or mechanical issues, the vehicle's prior use (whether previously leased or used as a rental), and its title status (whether salvaged or rebuilt).
Moreover, advertisements should clearly state the total selling price of the vehicle, including all fees the buyer will incur, to prevent misunderstandings.
Failure to comply with these advertising requirements can result in penalties, including fines and legal liabilities.
Selling a Vehicle with a Lien in Kansas
Selling a vehicle with a lien in Kansas requires adherence to specific steps and requirements.
A lien signifies the legal right or interest a lender or creditor holds in the vehicle. Before selling the car, the seller must first satisfy this lien.
Satisfying a lien can be done by paying off the remaining loan balance and obtaining a release statement from the lender. The release statement can be a notarized Lien Release or a Lienholder Consent to Transfer Ownership.
Once the loan has been settled, the seller must gather the necessary documents for the sale, including the vehicle title and the lien release document.
With these documents in hand, the seller can proceed with the sale through a private transaction or a dealership. When a buyer is found, the seller must transfer the vehicle title to the new owner. If multiple owners are listed on the title, all owners must sign it. Subsequently, the new owner must apply for a new title in their name.
Following the transfer of ownership, the seller should promptly remove the license plates from the vehicle and inform the Kansas DOR about the sale.
Motor Vehicle Sales Tax in Kansas
Kansas Statutes Section 79-3603 governs the imposition of taxes on the retail sale of tangible personal property within the state.
According to this statute, the sale of motor vehicles in Kansas is subject to the Retailers' Sales Tax. Currently, the statewide sales tax is at 6.5% of the total selling price.
In addition to the state sales tax, municipalities and counties in Kansas have the authority to impose local sales taxes. These local taxes are added to the state rate and can vary depending on the jurisdiction. Parties involved in vehicle transactions are advised to contact their local County Treasurer's Office to determine the sales tax rate applicable to their transaction.
While most motor vehicle transactions in Kansas are subject to sales tax, there are certain exemptions to be aware of.
Transfers made solely in exchange for stock are not subject to sales tax. In such cases, no tax is due if an individual transfers a vehicle to a corporation only in exchange for stock. However, if the individual receives anything besides stock, the transfer is subject to sales tax based on the vehicle's fair market value.
Moreover, sales between one's immediate family members, vehicles purchased by U.S. government agencies and instrumentalities, and those purchased by Kansas and its political subdivisions are also exempt from sales tax.
Lastly, vehicles purchased by elementary and secondary schools, parent-teacher organizations, and nonprofit organizations in Kansas are exempt from the state's sales tax.
Who Pays Sales Tax When Selling a Car Privately in Kansas?
When selling a car privately in Kansas, the responsibility for paying sales tax falls on the purchaser, not the seller.
Sellers are not required to collect or remit sales tax to the DOR. Instead, the buyer must pay the applicable sales tax directly to the County Treasure when registering the purchased vehicle in their county of residence in Kansas.
Sales Tax for Vehicles Sold in Kansas Residents of Another State
For Kansas dealers selling to out-of-state residents, the usual practice is to collect the Kansas Retailers' Sales Tax based on the gross receipts from the sale. This tax rate is determined based on the dealership's location.
On the other hand, if an individual is selling a vehicle in Kansas to a resident of another state, they may not be obligated to collect Kansas sales tax. Instead, the buyer is responsible for paying the applicable sales or use tax in their home state upon registering the vehicle.
Legal Requirements After Selling a Vehicle in Kansas
During and after selling a vehicle in Kansas, the seller and buyer must adhere to specific legal requirements. These include accurately disclosing the odometer reading and transferring the vehicle's title to the new owner. It is also mandatory for the seller to remove the license plates and notify the DOR of the sale.
Fulfilling these requirements benefits both parties involved. For the seller, it guarantees a clean break from ownership, minimizing the risk of future legal or financial obligations related to the vehicle. Meanwhile, the buyer gains legal ownership of the car and can proceed with registration and use without complications.
Odometer Disclosure Requirement
The primary purpose of the odometer disclosure requirement is to deter odometer fraud by providing an accurate record of the vehicle's mileage.
This accurate mileage reporting is vital for buyers to make informed decisions about a car's condition, value, and potential maintenance needs. It is also crucial for sellers as it demonstrates transparency and establishes buyer trust.
In Kansas, vehicle titles are designed to conform to federal odometer requirements. They contain spaces where the seller and buyer must fill out information to disclose the odometer at the time of sale.
However, an Odometer Disclosure Statement Form can be used if the title does not have space for the purchase price or the odometer reading.
Note that Kansas has exemptions to the odometer disclosure requirement. According to Kansas Statutes Section 50-652, a completed odometer statement is not required for motor vehicles ten model years or older and trucks with a gross vehicle weight of more than 16,000 pounds.
Transferring the Title to the New Owner
Transferring the title to the new owner is a crucial step in the vehicle-selling process in Kansas. This step confirms that the legal ownership of the vehicle is appropriately transferred to the buyer.
When selling a car privately in Kansas, both the buyer and the seller must complete the relevant sections on the back of the title. This includes providing their legal names, addresses, signatures, the date of the sale, the odometer reading, and the purchase price.
Note that if multiple owners are listed on the title, the number of signatures required depends on the connection between the names.
All persons listed must sign if the word "and" is used. If "or" is used, either person can sign since only one signature is required. If no connection is specified, it defaults to "and," meaning all owners (sellers) must sign.
Once all the necessary information has been completed, the seller can hand the certificate of title to the buyer. Armed with this document, the purchaser can apply for a new title in their name.
Do Both Parties Need To Be Present To Transfer a Title in Kansas?
In Kansas, both parties do not necessarily need to be present to transfer a vehicle title. However, they must confirm that the title assignment is filled out accurately.
Once the title is appropriately filled out and transferred to the buyer, it is the buyer's responsibility to obtain a title and register the vehicle in their name by visiting a local County Treasurer's Office.
Removing the License Plates and Cancelling Vehicle Insurance
The seller must remove license plates and cancel vehicle insurance to protect against potential liabilities or financial burdens associated with the vehicle.
To begin with, the seller must remove the license plates from the vehicle before finalizing the sale. This precautionary measure prevents any inadvertent use of the plates by the buyer or others, which could result in traffic violations or legal issues for which the seller may be held accountable.
Once the license plates have been removed, the seller has two options. They can either transfer the plates to another vehicle they own or surrender them to their local County Treasurer's Office.
Subsequently, the seller must promptly cancel the vehicle insurance policy. Continuing to pay for insurance on a no longer-owned vehicle is a needless drain on financial resources.
To cancel the insurance policy, the seller should promptly contact their insurance provider and inform them about the vehicle sale. The insurance company will typically guide the seller through the cancellation process for a smooth and efficient transition.
Notifying the Kansas DOR of the Sold Car
The final step that sellers must do upon selling a vehicle in Kansas is to notify the DOR. This requirement is mandated by Kansas law, and non-compliance can lead to legal repercussions.
Officially documenting the sale is essential for various reasons. First, it assures the legal transfer of ownership, which enables buyers to register and title the vehicle in their name.
Notifying the DOR also releases the seller from liability. If the vehicle is involved in traffic violations or accidents after the sale, the seller could be held accountable if the DOR still lists them as the owner.
Moreover, proper notification is vital for accurate taxation. Ensuring the vehicle is no longer listed in the seller's name means that the seller will not be responsible for personal property taxes on it in the future. It also aids in maintaining accurate sales tax records, which is important for both the seller's tax reporting and the buyer's obligations.
To notify the Kansas DOR of the sale, the seller must complete the Seller's Notification of Sale online form. This form requires detailed information about the seller, the buyer, the vehicle, and the date of the sale. A $10 fee is also necessary to successfully report the sale to the DOR.