Understanding the Costs of Transferring a Car in the United Kingdom
Whenever cash changes hands, the government will always be taking a portion of that action. This principle applies whether the car was manufactured in the UK or elsewhere. The process of transferring ownership can often be straightforward and cost-effective.
Private Sale Process
Transferring a car through a private sale can be completed within a relatively short period. Often, you can drive away with your newly acquired car within half an hour. Here’s a step-by-step guide:
Agree on the Sale Price: Determine the price of the car and ensure both parties agree to it. Fill Out the V5 Document: Complete the relevant sections of the V5 document, which will include the name change, new owner’s address, and the date of sale. Online Insurance: Once the sale is complete, you need to insure the car within 10 minutes of the sale. This can be done online. 6 or 12 Month Road Tax: Pay the road tax, which is a legal requirement for all vehicles on UK roads. Road tax typically starts immediately after the transfer and can be renewed online in about 5 minutes.SORN Statutory Off-Road Notification
If you choose to declare SORN (Statutory Off-Road Notification), you inform the DVLA that the car is not being used on public roads. However, the transfer of ownership remains the same as described above.
Closing Costs and Additional Considerations
The main cost in the process of transferring ownership is the financial obligation of the new owner to pay for any associated road taxes, if applicable. Here are some additional considerations:
Insurance Cost: You can buy the vehicle without paying the remaining road tax. However, you still need a valid insurance policy in place to insure the vehicle. MOT Test: If the vehicle does not have a valid MOT (Ministry of Transport) test, you can only drive it from the seller to a test center, which may incur additional costs. If the vehicle is new enough or has remaining time on an MOT, you won’t have to worry about this. Stamp Duty: A small cost is involved for posting the completed V5 certificate to the DVLA. This is typically a nominal fee.Conclusion
The process of transferring the ownership of a car in the UK can be done entirely online, making it both convenient and cost-effective. The seller no longer has the option to use the remaining time on the tax disc as it is now an online process. If you are insuring the car before collection, make sure to have a valid insurance policy in place. Apart from these considerations, informing the DVLA of a change of ownership is free.