If you sell your car to someone else, it’s best to notify the DVLA straight away so the new owner is registered as the keeper quickly. The DVLA should also automatically refund car tax to you that’s left on the car once they know you’re no longer the keeper.
But how do you officially change hands? Let’s take a look.
Whoever’s listed on the car’s V5C certificate as the current owner is the official keeper of the vehicle, being responsible for getting it taxed, MOT’d and insured. The person named as the keeper is also the first port of call for the police. This is if someone driving the car commits traffic offences like speeding that are detected by roadside cameras.
This is why it's important to make sure that the car is officially registered to the new owner.
What do I need to transfer vehicle ownership?
To transfer car ownership you need the current V5C certificate, also called the logbook, in which you're registered as the keeper. You’re required by law to give the new owner the detachable V5C/2 slip that’s on the V5C certificate when you sell them the car.
Having sold the vehicle, you need to formally transfer car ownership with DVLA so they register the new owner as the keeper. If you choose to do this by post, then you have to send what remains of the V5C to the DVLA, with the new owner’s details filled in on the logbook.
To do this, you need the new owner’s full name and UK address. You can also do the transfer with the DVLA online. But as well as the new owner’s personal information, you need the 11-digit reference number that’s on your V5C.
How does the V5C certificate or logbook work?
The DVLA creates the V5C when a car is first registered, after it glides out of the showroom and into the hands of its first owners. Assuming ownership is being transferred through the post, then each time ownership changes, the V5C has to be updated with the new owner’s details. It’s then sent back to the DVLA.
If you’re the existing owner, your name and address should already be on the V5C. Provided you’re transferring car ownership to the person who’ll be the new keeper of the vehicle all you need to do is complete section 2. This is headed ‘Selling or transferring my vehicle to a new keeper.’
You must fill in the new owner’s full name and UK address. You then post the logbook to the DVLA and that’s your job done. The new owner should then get a new logbook from the DVLA within four to six weeks.
If you’re selling the car on to a dealership or motor trader then you need to fill in section 4 instead. Section 5 of the V5C is for those who are looking to permanently export the car. The V5C also includes various bits of information on the car itself, including:
Can I transfer car ownership online?
You can transfer car ownership online and you might find this is the simplest and easiest way of doing it. Transferring car ownership online is also a lot more efficient for the DVLA, which means they can update the vehicle record immediately.
They can then aim to send a fresh V5C to the new owner in just three to five days. This is a huge improvement on the four to six weeks it takes using the postal transfer process.
To transfer car ownership online, you need the 11-digit reference number that’s on the V5C. As with the postal transfer, you also need the new owner’s full name and UK address. All you need to do is input these details via a form on the DVLA portal.
What about car tax?
Whoever’s named as the registered owner of the car on the V5C is also responsible for taxing the car. Car tax isn’t transferable between owners of a car, including family members.
The new owner becomes liable for tax on the car from the date the DVLA is notified that official ownership changed. They must either tax the vehicle they’ve just bought before they drive it or declare it off the road (SORN).
Provided the seller correctly notifies DVLA of the ownership change, it should automatically issue a car tax refund to them for complete months where there’s any road tax left on the car. The annual flat rate of road tax is currently £155.
Anyone registered as the owner on the V5C can use the logbook’s 11-digit reference number to pay the tax. New owners that are waiting for a new V5C to arrive must use the 12-digit reference number on the new keeper slip instead. Sellers are legally obliged to give you this detachable slip from the logbook, also known as V5C/2, when you buy a car.
How do I transfer car ownership to a family member?
Perhaps you’ve decided to upgrade your own car but will be giving your old car to your child. Transferring ownership to a family member follows the same process as if your were selling the car to a stranger.
So you can transfer ownership using the same general forms online or by following the usual process for transferring ownership using the V5C certificate via the post. The DVLA isn’t concerned with whether any money has actually changed hands or not.
Whoever’s registered as the new keeper must pay tax on the car straightaway unless it’s going to be declared as being off-road (SORN).
As the seller, you can transfer car ownership online, using the 11-digit reference number that’s on the V5C, and then fill in the family member’s name and address when prompted, registering them as the new keeper.
If you choose to do the transfer by post, then you need to fill in section 2 of the V5C with your family member’s details and send it to the DVLA in Swansea.
What about car insurance?
By law, the car should be have a valid car insurance policy before the new keeper takes it on the road. That includes any family members like your child who you might have transferred ownership to.
Third party insurance is the absolute legal minimum, though this only covers damage or injury suffered by other people, and might not protect your offspring or their car. Third party fire and theft (TPFT) is the next step up, and offers some, limited cover for their car
However, fully comprehensive car insurance often provides the best level of protection. And many comprehensive policies offer a range of benefits to protect your offspring and their car, as well as everything that comes with TPFT.
If you’ve transferred car ownership to your child and they’re a young driver aged 17-21, insurance premiums might be particularly costly. Fortunately, there are ways that younger drivers can access comprehensive car insurance at an affordable price. Here are some tips to lower your car insurance costs:
Make sure they’re accurate with their annual mileage.
Enhance the car’s security measures to reduce risk of theft.
If you’re going to use the car occasionally, they could add you as a more experienced named driver.
Increase your voluntary excess. Bear in mind that this means you could get a lower insurance payout following a claim.