A few weeks ago, my father sold my car. I had been using that car for seven years and the reason for the sale was that it was pretty old and we were spending way too much for the maintenance and repairs needed to keep it running.
I always thought that once you sell your car and it’s transferred to the new owner, then that’s the end of it. Turns out I was wrong. I wasn’t aware that we still had to go through the transfer of ownership at the Land Transportation Office (LTO)!
What does that mean? How does the process go? What are the expenses we need to prepare for? If you too are wondering how to change a car ownership registration, we’ve got answers for you.
Car Ownership Transfer: What does this mean and why is it important?
As I mentioned earlier, my father sold my car. In the car’s certificate, my father’s name is still cited as the owner of the car. But since we sold it, the car does not belong to us anymore.
Let’s pretend that the new owners used the car to rob a bank or they accidentally hit somebody because they were drunk. You would think that since they are the new owner, they will be at fault right? Well, not exactly.
Since we did not change the name on the certificate of the car, the police would hunt my father down instead of the new owners because his name was still on the certificate!
According to the Registered Owner Rule, the person registered on the certificate of registration of the car will be held responsible for any accident that was caused by the car with a certificate under his name EVEN IF the car was sold to another.
Do you see how important changing the name is in the certificate when you sell your car? It’s no joke! The accidents that could happen are endless and unpredictable. Processing the car ownership transfer should be your top priority once the car has been bought.
Now let me tell you how to process the LTO Transfer of Ownership so you would already know what to do when it’s time to sell your car.
Transfer of ownership: How Does the Process Go?
In the Philippines, it is usually the buyer who needs to transfer the ownership to their name. All you have to do as the seller is give them all the required documents in order for them to transfer the car to their name.
For the LTO to process the transfer of car ownership, here are the documents needed:
1. PNP – HPG Clearance
Make sure that before you go to LTO, you secure a clearance from the Philippine National Police-Highway Patrol Group (PNP – HPG) first!
To get this, you are required to submit these documentsfirst:
- Deed of Sale with the assumption of mortgage car
- Name of the seller and their address
- An accurate description of the vehicle
- Name of the buyer and their address
- Vehicle Identification Number (VIN)
- Engine Number
- Date of sale
- The vehicle’s selling price
- Odometer mileage readings
- Original LTO Certificate of Registration (CR) and Official Receipt (OR)
- If the vehicle was mortgaged – Cancellation/Assumption of Mortgage/Release
- If the vehicle was sold through a representative –Special Power of Attorney
- Actual inspection of the Motor Vehicle with a duly accomplished Motor Vehicle Inspection Report (MVIR)
- Confirmation of CR/OR (Cir-91-137) if it was issued by other Land Transportation Office (LTO) agency
- Taxpayer’s Identification Number (TIN)
2. LTO requirements for Transfer of Car Ownership
- A clearance from the Philippine National Police – Traffic Management Group (PNP – TMG)
- Original Certificate of Registration (CR) or Certificate of Registration Encumbered (CRE)
- The most recent original Official Receipt (OR) of Payment of the latest Motor Vehicle User’s Charge (MVUC)
- Compulsory Motor Vehicle Liability Insurance – Compulsory Third-Party Liability (CTPL)
- Approved Motor Vehicle Inspection Report (MVIR)
- Taxpayer’s Identification Number (TIN)
- If the vehicle was from a company or a corporation – Secretary’s Certificate
Step-by-Step guide to transferring car ownership
- First you must go to the nearest LTO District Office. You can find a full list of all the LTO district offices in Metro Manila in our article here. Make sure that you have all the documents required (double-check before you leave the house!)
- Upon presenting the documents to the evaluator, they will also compute how much you will pay for the fees
- Authorized personnel will be assigned to inspect your vehicle which includes the emission test with the duly accomplished MVIR
- The transfer of car ownership has costs. The authorized personnel who inspected your car will be the one who will give you the fees
- Pay for the computed fees then wait for the new documents to be released. You will be given the new CR (Certificate of Registration) and others
What is a Deed of Sale and why is it important?
Aside from the transfer of ownership, you need to make sure you get a proper Deed of Sale.
The Deed of Sale of a motor vehicle is a document that has all the information about the transaction or sale of the vehicle. It has all the proofs and records that the buyer and the seller had an agreement to sell the vehicle (for the seller) and an agreement to purchase (for the buyer). Both the buyer and the seller must sign the agreement.
It is critical to take note that the deed of sale is drafted by the seller and it must be notarized by a lawyer. If not, then the document has no power and would be useless if there were complications between the buyer and the seller in the future.
This is an important document especially if you are dealing with the transfer of ownership of a car. If in case there will be problems and disagreements between the buyer and seller, the Deed of Sale will be used as a basis on the agreement they signed in the first place. This will help protect both the buyer and the seller.