Transferring Ownership: Our Guide to Vehicle Paperwork

Like buying a new house, getting a bank loan or even just a new mobile phone, the activity of transferring ownership of a car from one person to another requires a whole bunch of paperwork. Yes, it seems the world drowns in paperwork, but is it a necessary evil to ensure you get what you pay for and can prove rightful ownership after the fact. Buying and selling a car is no different.

 

Buying through a dealer

When you buy through a dealer, the sales exec will normally handle all paperwork on your behalf and all you need to do is produce your ID, proof of current residential address and sign on the dotted line. The dealer would handle all that is required to transfer the car into your name, have the roadworthy inspection done and obtain the roadworthy certificate (RWC), do the actual registration and have a new original registration certificate issued, and print the number plates. You pay for the car and drive away.

 

Buying from a private seller

To transfer a car from the previous owner into another name, the new owner needs to go to their local council’s vehicle registration centre. Here, the new owner needs to submit a number of documents to facilitate the transfer:

  • Copies of new and previous owner’s ID (these need not be certified).
  • Proof of new owner’s residential address (a rates account or any utility bill would suffice)
  • The car’s original registration certificate, which the previous owner should provide.
  • Application for Registration and Licensing of Motor Vehicle – the blue form, RLV(4)2005/05
  • Notification of Change of Ownership/Sale of Motor Vehicle – the yellow form, NCO(5)2004/11
  • A current RWC.
  • Many, though not all, licensing authorities request a copy of the sales agreement between seller and buyer. Have one on hand in any event.

 

IDs and the like

Providing proof of identity and residence is obvious. This is needed to legally register a car into your name.

Ask for a copy of the previous owner’s ID and submit this with your other documents at the registration counter. It will be kept on record to track the history of any particular car.

 

Original registration certificate

Feature1-registration docWhile the registration authority obviously has this on file, this document captures specific detail on the car and the current owner. Much like a birth certificate for a human, it provides proof of a car’s existence (should it be stolen, for instance) and who has legal right to it. The original should always be kept in a safe place (not the cubby of your car…) and it is always a good idea to keep a scanned version on your PC and a photocopy on file should the original be destroyed by fire or the like.

Even so, a duplicate copy can be easily obtained from the licensing department for a small fee and provision of the current owner’s ID and proof of residence.

 

 

 

The blue form: application for registration and licensing

Feature1-blue formFilled in by the new owner only, this form is the hugely important as it captures most of the information pertaining to the car – particulars of the title holder (like a bank, if it is under finance), the owner, and the car (licence and register numbers, VIN, make and model, and a bunch of other stuff).

A new owner normally has a period of 21 days to register a car into his/her name.

 

 

 

 

 

The yellow form: change of ownership

Feature1-yellow formThe importance of this document cannot be underplayed. It contains particulars about the seller, the new owner, and the car.

Licencing authorities need to keep track of the whereabouts of each and every vehicle on the road, who owns it, and from which specific date. If ownership changes, so too do addresses and responsibilities pertaining to every aspect of the car.

From the moment the keys are handed over from seller to buyer, the onus of responsibility for overall ownership, finance, insurance, fines and any legal liability fall on the new owner. The specific date on which registration takes place only cements this fact.,

For instance, if one person sells a car on Day X but a week later on Day Y the new owner is involved in any kind of accident or incurs a huge speeding fine, the previous owner cannot be held liable for insurance repairs, paying the fine, or continued payment of finance instalments.

It is for this reason that it is always a good idea that TWO yellow forms be completed when one person sells a car to another. While the onus is on the new buyer to submit this form at the licencing authority together with all the others to facilitate transfer, it happens sometimes that there is a delay of quite some time before the transfers takes place.

For instance, the new owner, for any number of personal reasons, cannot immediately attend to the transfer, or there is delay in obtaining the RWC (see below), or the new owner simply does not do the transfer (if, for instance, he/she intends to scrap if for parts of turn it into a project car).

As much as it is the responsibility of the new owner to legally register the car in his/her name, it is the responsibility of the previous owner to legally indicate that he/she has sold car, so the previous owner – to safeguard themselves against any future liability – should also submit a completed, signed and DATED yellow form to the licensing authority.

The previous owner should also do the following immediately once the keys to a car has been handed to a new owner, as this is the crucial moment during which responsibilities change hands with the car:

  • Notify the bank that a car is sold and no longer under financial obligation
  • Cancel all insurance on the car
  • Ensure all fines and related are forwarded to the new owner, or should a fine arrive in the mail, provide proof the traffic department that you are no longer the owner of the car, and from which date.

The new owner should arrange insurance on the car before taking actual delivery, even if the registration number later changes. Insurance companies really require the VIN only to ensure cover.

Both seller and buyer should keep a signed copy of the yellow form in their possession for future reference.

 

The RWC

Arguably the most important document of all because of what it represents, and cheap to obtain (around R150, depending on the type of vehicle).

Roadworthy certificates are valid for a period of two months from date of issue. You need to obtain this document before your local licensing department will transfer and register the car into your name, as the RWC certifies that the car is mechanically sound and fit for use on a public road.

A vehicle testing station will not issue this document when they detect any mechanical defect on the car upon inspection. A fail could be the result of any number of things like a cracked or chipped windscreen or light lenses, leaking or defective shock absorbers, and CV joints, springs, brakes, exhausts, tyres and virtually anything on the car that does not operate 100%. Make sure the lights, turn signals, wipers and everything else that could have an impact on the safe operation of the car on a public road are all in perfect working order. If a defective item is found, you have a period of a week or two to fix it and come back to the testing station, otherwise you will have to do the procedure all over again and pay another inspection fee.

TIP: Ask the previous owner of the car you intend buying to obtain the RWC as a condition before you take transfer. If anything is mechanically unsound, he/he will need to fix it at their cost, and this could be a significant sum if a set of shock absorbers or even all four tyres need replacing, or if another serious mechanical fault is picked up.

The benefit is that you acquire a car that is mechanically sound, without you having to spend on it. If the previous owner is not willing to fix any faults as it is too costly, walk away and find another car, or renegotiate on the price.

 

Additional, optional stuff, but important!

If you buy privately and want additional peace of mind, you have another few options to consider before taking final transfer:

  • Have the car checked independently for accident damage.
  • Obtain a South African Police Clearance Certificate to ensure the car is not stolen or forms part of a criminal investigation.
  • Ensure the car is not subject to any outstanding financial obligation, as unpaid instalments on the part of any previous party may result in the car being repossessed by the bank, in which case you may have little legal recourse. Simply ask for proof from the previous owner that the car is paid for or that any financial agreement involving that car has been terminated.
  • Draw up a written agreement between seller and buyer stating that Seller X has sold car Y to Buyer Z for Price Q, dated and signed by both parties, each to retain a copy.

 

 

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