Selling a vehicle in Alaska necessitates a comprehensive understanding of the state's specific regulations to ensure a lawful and seamless transaction. The Alaska Consumer Protection Act (AS 45.50.471 - AS 45.50.561) is the primary regulatory framework for vehicle sales, promoting fair and transparent dealings.
Familiarity with these regulations is essential for sellers and buyers, as it fosters trust and mitigates potential legal complications. Additionally, Alaska law mandates that sellers disclose any known defects or issues with the vehicle to prospective buyers. Failure to comply may lead to legal consequences.
Moreover, completing the requisite paperwork with the Alaska Division of Motor Vehicles (DMV) is imperative for a smooth transfer of ownership.
Legal Requirements Before Selling a Vehicle in Alaska
Before selling a vehicle in Alaska, sellers must fulfill several legal requirements for a smooth and lawful transaction. These requirements include:
Duplicate Title
Before selling a vehicle in Alaska, the seller must have the vehicle title in their possession. If the title has been lost, destroyed, or stolen, they must obtain a duplicate title in their name and then release that duplicate title to the buyer. Here are the things that the seller must take note of:
Eligibility
The lienholder or the recorded vehicle owner can get a duplicate title if the original has been lost, destroyed, stolen, mutilated, or unreadable.
Required Documents
To get a duplicate title, the seller must provide the following:
- Notarized Affidavit of Lost, Stolen, or Destroyed Title (Form 809)
- Lien release from the recorded lienholder
- $15 fee
Alaska-Issued Titles
This procedure applies only to Alaska titles. If the seller loses an out-of-state title, they must apply to the issuing state to obtain a duplicate title.
Exceptions
If the vehicle title is not easy to access, the seller must not complete an affidavit of the loss, theft, or destruction of the title. Doing so may lead to criminal prosecution. The vehicle title can be inaccessible if it has been locked in a safety deposit box or stored or shipped in household goods.
Alternative Option
Suppose the seller cannot display and print the Affidavit of Lost, Stolen, or Destroyed Title form or obtain it from any DMV office. In that case, they can write a letter to request a duplicate title. The letter must have the following details:
- The seller's printed name must appear to indicate ownership of the authorized agent
Note: For agents, this must be accompanied by a power of attorney document if the applicant is acting as the personal representative of a deceased owner.
- A complete and correct vehicle identification number (VIN) is required.
- A vehicle description, including the year, make, and model, must be provided.
- A lien release must be furnished, if applicable.
- The applicant's signature is mandatory and must be notarized.
- A fee of $15 is required when submitting the title application.
Other Considerations
The seller must also take note of the following reminders:
- The owner must obtain a duplicate title if another state issued the title.
- If the vehicle title lists multiple owners, carefully check the conjunction word used:
- "AND" = All listed owners must provide their printed name and signature to release ownership of the title
- "OR" = Only one owner's name and signature is needed to transfer the title.
Note: For jointly owned vehicles where the title lists multiple owners connected by the word "OR," if one of the co-owners passes away, the surviving co-owner has the right to release and transfer the vehicle's title. Read the " Deceased Owner" page on the official AK DMV website to learn more.
Vehicle History Reports and VIN Check
Buyers usually get a vehicle history report for the vehicles they purchase. However, sellers can also do that to save time in the selling process. The seller can obtain a comprehensive vehicle history report on the vehicle they are selling.
The seller can get the vehicle history report through the National Motor Vehicle Title Information System (NMVTIS). Sellers should only get vehicle history reports from NMVTIS-approved data providers.
These reports contain crucial details about the vehicle, including:
- Title information
- The most recent title issuance date
- Brands or designations affixed to the vehicle title over the course of its history
- Odometer reading
- Record of any instances where the vehicle was declared a total loss or has previously borne a salvage title
Aside from the vehicle history, the seller can also include a VIN Check. This check verifies the VIN's legitimacy and tracks the basic details attached to that number. The check covers identifying any major "brands" or titles, liens, thefts, or other ownership issues tied to the VIN.
Sellers can access a free check through the National Insurance Crime Bureau's (NICB) VINCheck Service. They can also visit their nearest AK DMV office for assistance.
Emissions Inspection
Sellers can also conduct an emissions inspection before selling their vehicles. It is especially required if they registered in certain areas of Alaska with vehicle emissions testing programs, such as:
- Anchorage for vehicles newer than 1968
- Fairbanks North Star Borough area for vehicles newer than 1975
Typically, buyers must arrange for this service within 90 days of purchase.
Selling a Vehicle with a Lien in Alaska
Selling a vehicle with a lien in Alaska requires specific steps to ensure a legal and smooth transaction. These steps will vary depending on the type of lien. However, generally, sellers follow these steps:
Contact the Lienholder
The seller must contact the lender or lienholder listed on their vehicle's title to get the payoff needed to clear the lien. Ask them about their specific requirements for transferring the title when there is an existing lien.
Releasing/Removing a Lien
When a lien is on the title, the lienholder must release their interest in the vehicle before it can be sold. It can be done by paying off the car or obtaining a lien release from the lienholder. Here is the general process:
Pay off the Vehicle
The seller must compare the payoff amount from the lienholder to the vehicle's selling price. If the payoff is less than the selling price, the seller has positive equity, for which they can do the following:
- Get a lien release letter from the lienholder stating they will release the lien once receiving the payoff amount.
- Complete the transfer of ownership section on the title, having the buyer and seller sign it.
- Use the sale proceeds to pay the lienholder the payoff amount. They will then release the lien and submit the lien release to the DMV.
If the payoff is more than the selling price, they have negative equity. The seller must pay the difference between the sale price and the out-of-pocket payoff amount to the lienholder. Once paid, the lienholder will release the lien, and the seller can transfer the title to the buyer.
Clearing all liens is a prerequisite before the seller can legally transfer ownership during the sale.
Obtain Lien Release
Once the final payment is made, the lienholder will release their interest in the vehicle and provide the seller with the original title. It is essential to receive the title from the lienholder.
Apply for a Clear Title
After receiving the title, the seller must apply for a "clear" title with the AK DMV. The following items are required to obtain a new title:
- The original title should have a lien release or a separate letter from the lienholder releasing their interest. The lienrelease should have the following:
- A date
- Signature
- Title of the person releasing the lien
Note: A mere "PAID" stamp is insufficient.
- Application for Title & Registration (Form 812) if the last title issued was not an Alaska title.
- Payment of fees amounting to $15.
Motor Vehicle Sales Tax in Alaska
In Alaska, the purchase of vehicles is not subject to a statewide sales tax. However, certain local municipalities within the state impose local sales taxes on vehicle sales. These local tax rates can vary from 2% to 7%.
Vehicle dealers in Alaska are responsible for collecting and remitting any applicable local sales taxes on the vehicles they sell. Proper documentation of the vehicle sale, such as a bill of sale or title transfer, is essential for accurate tax reporting by the buyer.
Furthermore, certain municipalities may offer sales tax exemptions or credits for specific situations, such as when a vehicle's selling price exceeds the limit. For example, Bethel exempts a portion of the vehicle's selling price if it is above $3,500.
Private Party Vehicles Sales
When vehicles are sold privately between individuals, the buyer is generally responsible for paying any applicable local sales taxes. The seller is not obligated to collect or remit sales tax for private party sales. The buyers are responsible for accurately reporting the purchase and paying the appropriate local sales tax to the relevant municipality.
Out-of-State Vehicle Sales
If Alaskan residents buy a vehicle out of state, they generally will not have to pay sales tax since Alaska does not collect it. The Alaska buyers need to show proof of Alaska residency to the seller to claim the sales tax exemption.
However, some local municipalities have local sales tax. If the sale and registration are done in these municipalities, the buyer must pay the local sales tax.
Motor Vehicle Registration Tax
Although Alaska does not have a sales tax on vehicle sales, it does have an annual Motor Vehicle Registration tax. The tax varies depending on factors like the vehicle's age, type, commercial or non-commercial use, and city of registration.
To know more about how much registration tax a vehicle may incur, check this automatic vehicle registration cost calculator.
Legal Requirements After Selling a Vehicle in Alaska
Sellers in Alaska must adhere to legal requirements during and after selling a vehicle to ensure a smooth ownership transfer and avoid liabilities.
The necessary steps involve having a bill of sale, notifying the state DMV about the vehicle sale for transfer of ownership, properly transferring the title, accurately disclosing the odometer reading, and taking care of the license plates.
Bill of Sale
Although it is not necessary to transfer ownership, it is recommended to have a bill of sale. The buyer must sign the bill stating the purchase details. It must include the following information:
- The vehicle's serial number and description
- Printed names of the buyer and seller
- Date of sale
- Buyer's and seller's signatures
This document can be useful if the buyer incurs parking tickets or other issues after the sale.
Notifying the AK DMV About the Vehicle Sale for Transfer
Once the sale is done, the seller must complete the Notice of Vehicle Sale for Transfer attached to the bottom of the original title and promptly send it to the Alaska DMV office. Check the address below:
State of Alaska
Division of Motor Vehicles
ATTN: MAILOUTS
4001 Ingra Street, Suite 101
Anchorage AK 99503
Sellers can email the DMV or record the sale online using the "Notice of Transfer Pending" link.
The notice informs the DMV of the pending sale and protects the seller from further liability. Vehicle registration will not be renewed until the transfer is completed. Failure to send the notice will violate the Alaska Statute 28.10.271, specifically:
- Failure to notify the DMV within 30 days can result in penalties or fines for the seller.
- The seller may be liable for any parking tickets, tolls, or other fees incurred by the new owner until the transfer is appropriately recorded.
Title Transfer
The seller must then give the title to the buyer and complete the Assignment of Vehicle Title by Owner. The seller must make sure to:
- Avoid leaving any blank spaces on the assignment.
- Sign the reassignment portion to release interest in the vehicle.
Odometer Disclosure Statement
The Odometer Disclosure Statement is a crucial document in transferring a vehicle title. It is required when selling a vehicle less than ten years old. Both the seller and the buyer must certify the vehicle's odometer reading.
The seller provides the buyer with an Odometer Disclosure Statement, often called Form 839. This form includes essential information about the vehicle's current mileage at the time of sale. By signing this statement, the seller verifies that the odometer reading is correct and has not been tampered with or misrepresented.
This process is important because it helps prevent fraud and protects the buyer from purchasing a vehicle with inaccurate mileage.
License Plate Removal
In Alaska, removing the license plates is essential in the vehicle title transfer process. When a vehicle is sold, the seller must take off any personalized or specialty plates before handing over the car. This keeps the plates with the original owner, as they are personalized and may have special significance.
After the vehicle transfer, the buyer will receive a new set of plates at no extra cost. This step is crucial because it helps prevent confusion and correctly updates the vehicle's registration.
By removing the plates, the seller helps keep the records straight and avoids potential legal issues. The new plates issued to the buyer signify a fresh start with the vehicle, making sure that all the necessary paperwork is accurate and complete.