Just Sold My Car in Alabama — What’s Next? (2026)
Need Alabama bill of sale documentation?
If you haven’t generated a Alabama-compliant bill of sale yet, do it now — your proof-of-sale window closes the moment the buyer leaves.
Start My Alabama Car Bill of Sale →Alabama car sale facts
| Titling agency | Alabama DMV ↗ |
| Title transfer deadline | 20 days from sale |
| Release of liability | File with Alabama DMV within 5 days |
| Buyer’s sales / use tax | 2% (Private sales taxed at 2% (reduced from dealer rate)) |
| Bill of sale notary | Not required |
| Title fee (buyer pays) | $18 |
| Car identifier | VIN |
Your Alabama car post-sale checklist
- 1
Keep your signed Alabama bill of sale
This is your proof that you sold the car on the sale date. If the buyer gets a ticket, is in an accident, or fails to transfer the title within 20 days from the sale date, the Alabama bill of sale shields you from liability. Keep both your copy and a scan for at least 5 years.
- 2
File a release of liability with Alabama DMV
Most Alabama sellers file this online through Alabama DMV within 5 days of the sale. Filing removes you from records as the registered owner so any post-sale tickets, tolls, or accidents become the buyer's responsibility, not yours. Alabama requires the buyer to title the car within 20 days — your release filing protects you if the buyer misses that deadline.
- 3
Cancel or transfer your auto insurance
Contact your insurer the same day you hand over the keys. Alabama does not require you to maintain insurance on a vehicle you no longer own, but you must not cancel before the sale is complete. If you are replacing the car with another, transfer the policy instead — many insurers offer a short grace period to bind coverage on the new vehicle.
- 4
Remove your license plates
In Alabama, plates go with the seller — not with the car. Remove the plate(s) before the buyer drives or rides away. You can return them to Alabama DMV or transfer them to your next vehicle.
- 5
Verify the 20-day title transfer window
Alabama requires the buyer to retitle the car at Alabama DMV within 20 days of the sale date. If you have not received confirmation that the title has been transferred by day 25, contact Alabama DMV with your bill of sale and release-of-liability filing number to confirm the change of ownership.
- 6
Confirm your Alabama tax obligations (seller's side)
Alabama charges 2% sales/use tax on private-party car sales — the buyer pays this at Alabama DMV when titling. Private sales taxed at 2% (reduced from dealer rate). Sellers generally do not owe Alabama sales tax, but if the car sold for more than your original purchase price you may owe federal capital gains tax. Consult a tax advisor.
- 7
Watch for liens or loan payoff confirmation
If you had a loan on the car, confirm the lender received the buyer's payoff and has released the lien on the Alabama title before you deliver the title. Alabama uses MVT 5-13 as the lien release form — your lender will file this with Alabama DMV to clear the title record.
Alabama lien release procedure
- Obtain Form MVT 5-13 from the Alabama MVD or the lienholder.
- Lienholder completes and signs MVT 5-13 releasing the lien.
- Submit MVT 5-13 with the existing title and title application at your county probate court.
- Pay the applicable title fee and receive a clean title by mail.
Frequently Asked Questions — Alabama
How long do I have to file a release of liability in Alabama?▾
Alabama sellers should file a release of liability with Alabama DMV within 5 days of the sale. Most Alabama sellers can file this online directly through Alabama DMV. Filing removes you from records as the registered owner so any post-sale tickets, tolls, or accidents fall on the buyer.
What is the Alabama title transfer deadline for a car?▾
Alabama requires the buyer to title the car within 20 days of the sale date. Missing the deadline can trigger late fees and back-dated registration penalties.
Do I owe Alabama sales tax on the car I just sold?▾
Alabama charges 2% sales/use tax on private-party car sales. Private sales taxed at 2% (reduced from dealer rate). The buyer typically pays this at Alabama DMV when titling — sellers generally owe no Alabama sales tax on the proceeds. You may owe federal capital gains if you sold for more than the original purchase price.
Does Alabama require a notary on the car bill of sale?▾
No. Alabama does not require notarization for a private car bill of sale. A signed bill of sale with both parties' full names, addresses, signatures, and the date is sufficient for Alabama DMV.
How does the buyer register the car in Alabama?▾
The buyer brings the signed bill of sale and endorsed title to Alabama DMV, pays the title fee (~$18) plus 2% sales/use tax, and receives a new Alabama title in their name. Transfer must be completed within 20 days of the sale date.
What if the buyer hasn't transferred the title yet?▾
In most states this is the buyer's responsibility, not yours. Filing a release of liability with your state DMV is the seller-side protection — it removes you from records as the registered owner so any post-sale tickets, accidents, or tolls fall on the buyer regardless of when the title is actually transferred.
Do I need to keep the bill of sale after the sale is complete?▾
Yes — keep your signed bill of sale for at least 5 years. If a parking ticket, toll, or accident occurs after the sale but before the buyer transfers the title, the bill of sale is your proof that the car was sold on the sale date. Store a scan and the original.
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Source: Alabama DMV ↗ · Last verified 2026-05-07