Montana's vehicle sales are subject to specific legal requirements outlined in Title 61, Chapter 4 of the Montana Century Code. This legislation covers a wide range of topics related to vehicle transactions, including titling, registration, and transfer of ownership.
Prospective vehicle sellers in Montana should thoroughly familiarize themselves with these regulations to maintain compliance and avoid potential legal issues. The code addresses various aspects of the selling process, such as proper documentation, disclosure requirements, and the steps necessary to legally transfer vehicle ownership.
The Montana Motor Vehicle Division (MVD), operating under the authority of the Department of Justice (DOJ), plays a crucial role in implementing and enforcing these vehicle-related regulations.
To comply with state laws, the MVD has established strict guidelines that vehicle sellers must follow. The MVD also provides resources and information to help sellers navigate the selling process correctly and efficiently. By following the guidelines from MVD, sellers can facilitate a fair and compliant transaction for themselves and the buyers.
Legal Requirements Before Selling a Vehicle in Montana
Before selling a vehicle in Montana, sellers must consider the following key points:
Duplicate Title
Sellers must first check if they have the vehicle title they are selling. They must get a replacement if the title is misplaced, damaged, or stolen.
To get the replacement, the seller must complete the Application for Replacement Certificate of Title (MV7) form. They must then mail the form with the $10.30 fee to the MVD headquarters at:
Motor Vehicle Division
P.O. Box 201431
Helena, MT 59601
If there are two or more registered vehicle owners, only one name and signature are required in the form. For questions and clarifications, sellers can call the MVD at 406-444-3933 or email mvd@mt.gov.
VIN Inspection
While buyers typically perform vehicle identification number (VIN) checks, sellers in Montana can also conduct these checks on their vehicles for sale.
Montana lacks a dedicated online VIN check service. However, sellers can contact local law enforcement personnel, staff of driver license exam stations, and local County Treasurer's office personnel for the inspection. They must complete the Vehicle/OHV Identification Number Inspection (MV20) form.
For more information, visit the "Vehicle Identification Number (VIN) Inspections" page on the official MVD website.
Sellers can also use free services, such as the following:
- National Highway Traffic Safety Administration (NHTSA) VIN Decoder
- National Insurance Crime Bureau (NICB) VINCheck Lookup Service
These services can reveal important vehicle details, including theft records, title status, and accident history. By using these services, sellers can gain insights into their vehicle's background, promoting transparency and potentially easing buyer transactions.
Vehicle History Report
Vehicle history reports are crucial for Montana buyers when evaluating a potential purchase. These reports provide essential information about a vehicle's background, enabling informed decision-making.
Sellers can also leverage these reports as additional documentation for their vehicles. This approach increases transparency and builds buyer trust.
For accuracy and legal compliance, sellers must obtain reports only from the National Motor Vehicle Title Information System (NMVTIS). The agency has approved data providers to issue these reports. It guarantees reliable and current information.
Key details in these reports include:
- Vehicle title information, including current status and ownership transfers
- Date of most recent title issuance
- Official title brands or remarks (e.g., "salvage" or "rebuilt")
- Comprehensive odometer readings
- Records of total loss or salvage declarations
With this information, sellers can provide a clear picture of the vehicle's history, potentially streamlining the sales process and proactively addressing buyer concerns.
Test Drives and Mechanics
Note that buyers may wish to test the vehicle before they proceed with the purchase. When they do, the seller should verify that the buyer possesses a valid driver's license. The seller should accompany the buyer as a passenger during the test drive.
Additionally, the seller should consult their insurance agent regarding any specific requirements concerning drivers not declared on their policy.
If the buyer wants to get the vehicle inspected by an independent mechanic, the seller should mutually discuss the details with them. Both parties should establish who will be responsible for covering the cost of the inspection.
Selling a Vehicle with a Lien in Montana
A vehicle with a lien or security interest means a lender has a legal claim to the vehicle until the loan is fully repaid. This situation complicates the selling process, but it's not uncommon. Sellers must navigate this carefully to support a legal and smooth transaction. Here's a more detailed breakdown of the process:
Check the Title of the Vehicle
Typically, the vehicle's title indicates whether the vehicle has an existing lien. Sellers must double-check their titles and look for a "This vehicle/vessel is subject to the following security interest" label. This label signifies that a lienholder has a legal claim on the vehicle, usually because the owner financed the vehicle and has not yet paid off the loan.
The seller can also use the Montana MVD's online vehicle record portal. This portal provides a comprehensive and up-to-date report on the vehicle's title status, including any existing liens.
Determine the Payoff Amount
Contact the lienholder (usually a bank or finance company) to request the current payoff amount. This figure represents the total amount needed to settle the loan entirely. Be sure to ask:
- The exact payoff amount
- How long this payoff amount is valid (it often changes daily due to interest)
- Acceptable payment methods
- Where to send the payment
- How to obtain a lien release once paid
Inform the Buyer
Transparency is crucial when selling a vehicle with a lien. Sellers must explain to potential buyers:
- The presence of the lien and what it means
- The sale process will involve paying off this lien
- How the seller plans to handle the payoff and title transfer
- Any potential delays this might cause in transferring ownership
This openness can be a selling point, demonstrating the seller's honesty and attention to detail.
Pay off the Lien
Sellers must compare the payoff amount to their expected selling price. If the payoff is lower:
- Request a lien release letter from the lienholder.
- Use the buyer's payment to pay off the lien.
- Keep any remaining amount as profit.
If the payoff is higher than the selling price:
- The seller will cover the difference out-of-pocket.
- Consider negotiating with the buyer or reassessing their selling price.
In either case, the seller must make sure that the full payoff reaches the lienholder before proceeding with the sale. This step is crucial for a legal and compliant transaction.
The lender cannot collect the lien payment unless the seller completes the Security Interest Action (MV 81B) form. This form serves as the seller's acknowledgment of the lien that must be paid. The seller may also have to pay the $8.24 fee to file the form.
Obtain Lien Release
After the seller fully pays off the lien, the lienholder relinquishes their legal claim on the vehicle and returns the original, lien-free title to the seller. It marks the official removal of the lien from the vehicle.
Once this process is complete, the seller must take the next step in the transaction by providing the buyer with the Release of Security Interest or Lien (MV37A) form.
The information on this form must align precisely with the details on the title document. This careful alignment of information promotes a smooth transfer of ownership. It also helps prevent any potential issues or delays in the buyer's ability to register the vehicle under their name.
Following these steps, the seller completes the lien removal process and sets the stage for a clean, legal vehicle transfer to its new owner.
Motor Vehicle Excise (Sales) Tax in Montana
Montana does not impose a state-wide excise or sales tax on vehicle purchases, which means that sellers, particularly dealers, are not required to collect sales tax. Consequently, buyers who purchase vehicles from private sellers are also exempt from paying sales tax during vehicle registration.
However, note that certain counties in Montana may impose their own taxes on vehicle transactions. Buyers should check with their local county tax office to determine if additional county sales tax applies.
Legal Requirements After Selling a Vehicle in Montana
After the sale, sellers must fulfill some additional legal requirements. These requirements are critical for a smooth and fair transaction between sellers and buyers. Some of these requirements are the following:
Proof of Purchase
The seller must maintain thorough transaction documentation when completing a vehicle sale in Montana. This documentation serves as a crucial sale record and protects the seller's interests in case of future disputes or legal issues.
The seller should retain a comprehensive record with key information about the vehicle and the buyer. This record should contain:
- The buyer's full name and current address
- The vehicle's year, make, and model
- The vehicle's VIN
- The buyer's driver's license number
- The agreed-upon purchase price
- The date of the sale
This record can take one of two forms:
- A photocopy of the reassigned title, with all relevant information filled out
- A separate form or document containing all the required details
For convenience, sellers in Montana can utilize the official Bill of Sale (MV24) form provided by the Montana DOJ. This standardized form is designed to capture all essential details of the transaction.
The information in the MV24 form must align with the sales information to be added to the Application for Certificate of Title for a Motor Vehicle (MV1) form to be submitted during registration.
Keeping such detailed records serves several purposes:
- It provides proof that the vehicle is no longer in the seller's possession.
- It can help protect the seller from liability for any incidents involving the vehicle after the sale.
- It may be required for tax purposes or in case of any legal disputes.
- It assists in the proper transfer of the vehicle's registration.
Sellers should store this documentation in a safe place for a considerable period after the sale, as issues related to the transaction could potentially arise months or even years later. They must also provide the buyers with a copy of form MV24 or something similar, as they will need it during vehicle registration.
Odometer Disclosure Statement
Sellers must accurately document the vehicle's mileage. While the Odometer/Statement of Sale Section of Form MV1 can be utilized for this purpose, sellers are strongly advised to complete the Odometer Disclosure section of Form MV24. Recall that MV24 serves as proof of purchase and includes the odometer reading.
If the vehicle is a 2011 or newer model, the seller must use the separate Odometer Disclosure Statement (MV904).
MVD Notification
The licensed dealers usually report the sale to the MVD upon completing a vehicle sale. Usually, the seller can inform the MVD when they submit Form MV24 and other documentary proofs of the sale. However, the seller may also need to submit a Certificate of Sale (MV24AB) as additional evidence. For more information, dealers can contact the MVD.
If the seller is a private individual, the buyer usually notifies the MVD of the sale by submitting a copy of Form MV24 as proof of the sale.
Title Transfer
The seller must transfer the vehicle's title to the buyer once the sale is finalized. The buyer has 40 days from the date of sale to transfer the vehicle's ownership into their name. This process involves applying for the title and registering the vehicle at the County Treasurer's office in the buyer's county of residence.
If the buyer fails to complete this transfer within 40 days, they will incur a late fee of $10. It is the buyer's responsibility to complete this process in a timely manner to avoid additional charges and comply with Montana state regulations.
For title-specific questions, sellers and buyers can contact the MVD at 406-444-3661 or by email at mvdtitleinfo@mt.gov.
Remove License Plate
The plates belong to the owner, not the vehicle. The seller should not allow the buyer to drive the vehicle home with the promise of returning the plates. If the plates are not removed, the seller may be liable for any parking or traffic violations after the sale.
The owner can request to transfer the plates to another vehicle they own by contacting the County Treasurer's office for more information. If the owner wants to transfer the plates to the buyer with a classic car, they must fill out the Statement of Fact (MV100) form to relinquish all their rights to the license plate.
Because the vehicle will not have license plates and the buyer will need them to legally drive the vehicle, the best approach is for the seller to visit the County Treasurer's office with the title and the buyer. The seller can then sign off in front of the clerk as the owner/seller.
The buyer can then complete the transaction, pay the fees, and receive a new set of license plates. The seller should remove their plates from the vehicle, completing the formal transfer of ownership.
The seller or owner may transfer the plates to another owner, provided the vehicle to transfer to is registered with the Country Treasurer's office.
Temporary permit
When a buyer purchases a vehicle or selects a license plate that is not immediately available, the vehicle dealer or the buyer's County Treasurer's office issues a temporary registration permit (TRP).
With the TRP, buyers can legally drive their newly purchased vehicle until they receive their new registration and plates. The TRPs are generated electronically, each with a unique number, and come with a detachable proof of temporary vehicle registration.
The buyer should place the permit in the plastic sleeve provided by the issuer and attach it to the vehicle's rear, where the license plate normally goes. When the buyer receives their registration and plates, they must remove and replace the temporary registration permit with their new plates.
This system helps new vehicle owners legally operate their vehicles while waiting for permanent registration and plates to be processed and delivered.
To get the permit, sellers can access the "Temporary Registration Permit Service." This online service allows users to generate, reissue, and cancel TRPs for recently acquired vehicles. Users can also search for vehicles using their VIN.
Check the "License Plate Information" page on the MVD website for more information.
Cancel Vehicle Insurance
Montana strongly supports uninsured motorists, implementing strict penalties to enforce compliance. When sellers are involved in the sale of a vehicle, they must promptly notify their auto insurance provider about the transaction and provide all relevant details, including:
- The date of sale
- Buyer Information
- Any other pertinent information requested by the insurance company.
Additionally, sellers are responsible for requesting the cancellation of insurance coverage for the sold vehicle. Sellers must specify that the cancellation date coincides with the sale transaction date.
Sellers help buyers promptly include their newly acquired vehicle under their insurance coverage by taking swift action to cancel the insurance. This proactive approach helps to prevent any potential penalties associated with driving uninsured.
Furthermore, this timely communication protects sellers from potential legal issues and facilitates a smooth transition for buyers. By registering the vehicle and securing insurance without delay, buyers can comply with Montana's stringent vehicle insurance requirements.
This process highlights the significance of both parties fulfilling their legal obligations, fostering a culture of responsibility and adherence to the law within the Montana motorist community.