There are a few additional steps after junking your car. By now you have completed your junk car sale by transferring the title and receiving payment. Many people think that this completes the junk car selling process, but there additional steps that may need to be taken.
The steps below are not required for every junk car sale. Different states have different requirements. Junk cars that have not been registered or insured for some time may require no additional steps depending on state.
Steps to Complete The Sale of Your Junk Car
To complete selling your junk car, one should get a receipt or proof of sale and perform 3 additional steps.
- Notify the DMV that you have sold the junk car. Most states require that you notify the DMV that you have sold the junk car. This cancels the registration and removes liability for anything done with the vehicle after you sold it. You may also be required to return the plates. Check with your local DMV to ensure that you complete the necessary steps for your state.
- Cancel your car insurance. Canceling your car insurance is one of the last things you need to do after selling a junk car. Keeping insurance on the car until ownership has been transferred is important for financial protection even if you are not driving the vehicle. It is important to notify the DMV before canceling your car insurance because many states issue fines when the insurance has been canceled before the registration.
- Leave a review for your junk car buyer. It is not mandatory to leave a review for your junk car buyer, but doing so helps others in your community find reputable junk car buyers when selling a junk car for cash.
Document when you notify the DMV and cancel your insurance, including confirmation numbers or who you spoke with during the transaction. This documentation may come in handy if there are any issues after selling the junk car.
What should be on the receipt or proof of sale?
The receipt or proof of sale that you receive from the junk car buyer should list the date of the sale, the junk car buyer’s identifying information, the VIN, the vehicle description, and the value of your junk car paid when the car was junked. Some states may have additional requirements or specific forms, but this should be handled by the junk car buyer without prompt.
Why Do I Need to Notify the DMV When I Sell My Junk Car?
There are 3 main reasons you need to notify the DMV when you sell your junk car even if your state does not make the step mandatory. First, about half of the states in the US base car property taxes on vehicles registered. These include Missouri, Nebraska, Virginia, New York, and Massachusetts. Immediately canceling your registration ensures you do not pay unnecessary property taxes.
Second, some states credit the unused portion of the registration to your account for use in registering or renewing the registration on another vehicle. These include Arizona, Iowa, Texas, Washington State, Oregon, Virginia, and Florida. You must notify the DMV of the sale, cancel the registration, and return the license plates to get the refunded registration credit in most cases.
Why Do I Need to Keep the receipt or proof of sale?
You should keep the receipt or proof of sale for at least one year after selling your junk car. The receipt is your legal proof of when the junk car was sold. This proof may be required if the DMV claims they did not receive notice that you junked the car. You may also need the proof of sale in the event that the vehicle is used for criminal activity after you sold it. This is not common when selling a junk car.
What happens to my junk car after selling it?
Your junk car will be dismantled and recycled after selling it. Junk cars go to junkyards, salvage yards, or auto dismantlers for their reusable parts to be removed and resold. The remaining scrap car shell is recycled by a scrap metal recycler or auto wrecker. Junk cars go directly to the recycling stage if they do not have reusable parts that are in demand.