Selling a car with an open title is generally not recommended and is illegal in many states because it constitutes "title jumping," a form of tax evasion. An open title occurs when the seller signs the title over to the buyer but leaves the buyer's name line blank. The next person who holds the title can then fill in their name, skipping the requirement to register the car and pay sales tax. This practice creates significant legal and financial risks for both the seller and the eventual buyer.
The primary risk for you as the seller is that you remain the vehicle's last known legal owner. If the person who buys the car from you never registers it and then abandons it, gets parking tickets, or is involved in a hit-and-run, the authorities will trace the vehicle back to you. You could be held liable for fines, penalties, and even civil liabilities. Furthermore, most states have specific laws against transferring a title without simultaneously registering the vehicle in the new owner's name.
For a legitimate and safe sale, you should always follow the proper procedure. Sign the title over directly to the buyer in their presence after agreeing on a price. Complete a bill of sale that documents the transaction details, including the Vehicle Identification Number (VIN), sale price, date, and both parties' names and addresses. Finally, file a release of liability with your state's Department of Motor Vehicles (DMV). This form officially notifies the state that you are no longer the owner, protecting you from future liabilities from the moment the new owner takes possession.
| State | Penalty for Title Jumping | Additional Consequences |
|---|
| California | Fine of up to $1,000 | Vehicle registration suspension |
| Texas | Fine of up to $500 | Potential misdemeanor charge |
| Florida | Fine of up to $5,000 | Felony charge for repeat offenses |
| New York | Fine of up to $200 | Civil penalties for unpaid taxes |
| Illinois | Revocation of vehicle registration | Liability for subsequent violations |
