How to sell a car with a reservation of title?

Here we give you all the steps you need to follow to sell a car with a reservation of title. Take note:

What is a reservation of title (ROT)?

The reservation of title is a clause that is usually included in vehicle financing contracts. Basically, it states that the car remains the property of the financial institution until the payment has been made in full. This means that, even if you are the owner of the car, you cannot legally sell it until you have paid off the debt and eliminated this reservation of title.

If you attempt to sell a car with a reservation of title without complying with this stipulation, you will find that you cannot transfer the ownership of the vehicle to the new buyer, since legally the car still belongs to the bank or financial institution.

How do I know if my car has a reservation of title?

If you bought your car through a loan or financing, it is likely to have a reservation of title, but to make sure, you can follow these steps:

• Request a complete report of your vehicle at the Dirección General de Tráfico (DGT) or on the website. This report will include information on the reservation of title and any other charges your car may be subject to.
• Review your financing contract. In most cases, the reservation of title clause is clearly indicated in the documentation you signed when you financed the car.

Please note that confirming the existence of the reservation of title is the first step before starting the process of selling the car. You need to know if it is active in order to comply with the rules and avoid problems in the transaction.

How to get past the reservation of title?

In order to sell your car with a reservation of title, you must first comply with the stipulated clauses. You can do so as follows:

• Pay off the loan in full: If you have not yet finished paying off the financing, you will need to pay off the remaining amount. You can check the outstanding balance with the financial institution and make the payment in one lump sum.
• Request the lifting of the reservation: Once the loan has been paid off, you will have to contact the financial institution and request a certificate of cancellation of the reservation of title. This document is essential to be able to lift the reservation in the Registry of Personal Property.
• Submit the documentation to the Registry of Personal Property: Once you have the cancellation certificate issued by the financial institution, you have to go to the Registry of Personal Property to process the cancellation of the reservation. You will also need the car owner's ID card and the original financing contract, among other documents.
• Request a new DGT report: After processing the cancellation at the Registry, it is a good idea to request a new report of the vehicle from the DGT to make sure that the reservation of title has been completely eliminated.

This is important to verify because, without the cancellation of the reservation of title, selling the car will be legally impossible. This procedure ensures that you can transfer ownership without any problems, and the buyer can rest assured that there are no outstanding debts on the car.

How long does it take to cancel the reservation of title?

The process of canceling the reservation of title may vary depending on the financial institution and the Registry of Personal Property. Normally, once you have requested the reservation be lifted, the process can take between 1 and 3 weeks.

It is essential to take this time into account when planning the sale. If you are in a hurry to sell the car, it is better to start the reservation cancellation process in advance so as not to delay the transaction with the buyer.

Advantages of canceling the reservation of title prior to sale

Once you have canceled the reservation of title, you can sell your car without any problems and with total security. This has several advantages:

• Ease of transaction: The buyer can transfer the ownership of the vehicle without any legal obstacles, speeding up the whole process.
• Buyer confidence: By selling an unencumbered car, the buyer will be more willing to pay a fair price and trust the transaction.
• Possibility of selling faster: Buyers tend to avoid cars with encumbrances or legal problems. If you remove the reservation of title before putting the car up for sale, you will be able to find a buyer more quickly.

Canceling the reservation of title is not only a mandatory step, but it also improves the chances of selling your car quickly and effectively, building confidence in the sales process.

Now that you know how to sell a car with a reservation of title, you may be interested in acquiring a new vehicle. Whatever your case may be, we can help.