When a dealer sells a vehicle a retail purchaser on the lot, state law requires you to complete all documents necessary to title and register the vehicle in the customer’s name. A dealer may be exempt from transferring title based on the vehicle weight. You will also be required to file the paperwork with the appropriate county tax assessor-collector’s office within 30 calendar days of the sale when the vehicle was paid for with cash or if the dealer used a finance company.
If the dealer is financing the vehicle the dealer is required to file the paperwork with the appropriate county tax assessor-collector’s office within 45 days of the sale. The dealer has 60 days if the customer is a military purchaser.
Dealers must apply for title for motor vehicles sold which are 11,000 pounds and less. Trailers/semitrailers 4,000 pounds and less are not motor vehicles. If your customer goes to the assessor-collectors office to transfer the title of a vehicle purchased by you, an official complaint will be filed with the TxDMV against your dealership and the dealer may face disciplinary action.
YOU MUST COMPLETE ALL DOCUMENTS REQUIRED TO REGISTER AND TITLE EVERY VEHICLE YOU SELL ON YOUR LOT TO A RETAIL CUSTOMER. IT IS TEXAS LAW!
as a Texas Dealer
The State of Texas allows licensed motor vehicle dealers to do what is known as a “Reassignment” of ownership. A dealer is allowed to purchase a vehicle from one person, then reassign the ownership of the vehicle to another person.
You might think of this as “flipping” a vehicle for a profit.
A Texas dealer license number is required on all assignments and reassignments of a motor vehicle title or manufacturers certificate of origin.
A dealer which holds an independent GDN is never allowed to reassign a manufacturers certificate of origin or MCO. An MCO is the document used to sell a brand-new vehicle. Only franchised dealers selling brand new vehicles
are allowed to sell vehicles on an MCO.
Even if you ever purchase a new vehicle from a franchisee on an MCO, you would be required to title and register the vehicle before reselling at which time it would no longer be new, it would be used.
A dealer is not required to title or register a used vehicle in the dealership’s name before assigning the vehicle to a subsequent purchaser, however, if the dealer wants to register any vehicle the dealer must file an application for Texas title. For example, if you purchase a vehicle at a dealer auction and you would like to use the vehicle as a towing vehicle, you would need to register, pay sales tax, and title the vehicle.
When you are purchasing a vehicle to resell, whether you are purchasing it from an individual, directly from another dealer, or at a dealer auction, you must ensure you are completing the title correctly.
You will be in charge of the “Deal” so it is important you know how to complete the title correctly, whether you are buying or selling the vehicle.
Many dealers will purchase all of their vehicles from dealer auctions. When you purchase a vehicle from a dealer auction you will stand in a line after the sale at the dealer auction title clerk desk. The title clerk will then direct you on how to sign the title. Dealer auctions complete several thousands of titles on a weekly basis and they will easily show you how to complete the title before you leave the auction.
Sometimes you will purchase a vehicle directly from an individual.
Many dealers run advertisements to buy vehicles from individuals. You can never make a profit on selling vehicles until you purchase a vehicle to resell. You will constantly be searching for vehicles to purchase so you can resell the vehicle for a profit.
When purchasing a vehicle from an individual be sure you are only purchasing the vehicle from the person whose name is clearly printed on the front of the title.
When a dealer purchases a vehicle to re-sell or takes vehicle on trade, the dealership’s name and address must be entered as the purchaser on the back of the title, or on the dealer’s reassignment form in the “Name of
Purchaser” section. The name you enter must match the name on your dealer license exactly. Remember the purchaser is always the person which is buying the vehicle and the seller is always the person which is selling the vehicle.
Be sure to complete the assignment in its entirety, leaving any parts blank could be a violation of the law.
You will note the back of a Texas title has 4 assignment boxes which allow 4 dealer-to-dealer sales, or reassignments.
The wholesale market in Texas is very strong. On several occasions you may find a vehicle has been bought and sold between several dealers before finally being sold to a retail customer.
An example of this could be one dealer purchases a vehicle from an individual then takes it directly to sell at a dealer auction. Then another dealer realizes the prices at another dealer auction are higher, so they purchase the vehicle from one dealer auction and take it to another dealer auction to sell the following week.
Another dealer purchases the vehicle from that dealer auction then sells it to a dealer across the street from there dealership. Then that dealer sells it to a dealer in another state
We are here to help you start your
Texas motor vehicle dealership!
Delus Johnson-Lead Instructor Automobile Dealer