Buying or selling a car is exciting. However, one wrong step during the ownership transfer process can lead to serious headaches later. From unpaid fines to legal disputes, even small oversights can cost time, money, and peace of mind.
Whether you’re a buyer or a seller, understanding what not to do is just as important as knowing the right process. Here are the most common mistakes to avoid when transferring car ownership, and how to ensure a smooth, legal, and stress-free transaction.
💸 Not Settling Financial Obligations Before Transfer
If the car still has outstanding fines, penalties, or encumbrances (like unpaid bank loans), the LTO won’t approve the transfer.
Many sellers forget to settle these issues, causing delays or even transaction cancellations.
✅ Fix it:
- Check for unpaid traffic violations under the LTO’s system.
- Pay any amortization balances if the car was financed.
- Get a Release of Chattel Mortgage from the bank if applicable.
A debt-free, cleared car ensures a faster ownership transfer.
🧍♂️ Using Incomplete or Incorrect Documents
Missing paperwork is the most common cause of LTO rejections. The transfer process requires specific documents, and even a wrong signature or outdated ID can delay everything.
✅ You’ll need:
- Original OR/CR
- Deed of Sale (notarized)
- Valid IDs of buyer and seller (with signatures)
- CTPL Insurance (Compulsory Third-Party Liability)
- Emission test and stencil report
Double-check all names, plate numbers, and signatures match exactly. Inconsistencies can result in LTO holding your application.
🕓 Delaying the Transfer After Purchase
Many buyers drive the car for months before processing the transfer — a big mistake.
If the vehicle gets into an accident or traffic violation, the registered owner (the seller) will still be legally responsible.
✅ Avoid this:
Process the transfer within 30 days of purchase.
The longer you wait, the higher the risk of legal and financial complications.
📄 Forgetting to Notarize the Deed of Sale
A non-notarized Deed of Sale is considered invalid in many jurisdictions. It’s not enough to just sign it — notarization makes it official and legally binding.
✅ Quick fix:
Visit a licensed notary public and have both parties sign in person.
This ensures authenticity and prevents disputes about the sale later on.
🔍 Ignoring the Engine and Chassis Numbers
Before completing the sale, always verify that the engine and chassis numbers on the car match the numbers on the OR/CR.
If they don’t, the LTO will flag your application for inspection, causing delays.
✅ What to do:
- Have the numbers stenciled clearly at an LTO-accredited inspection center.
- Make sure the stencils are attached properly to your transfer documents.
Small discrepancies often come from clerical errors — catch them early.
🚘 Skipping the Emission Test or CTPL Renewal
A valid emission test certificate and CTPL insurance are required for transfer. Many buyers assume the seller’s documents are still valid, but if they’ve expired, your application won’t be processed.
✅ Always check expiration dates before submitting your documents. Renew them immediately if needed.
💬 Not Informing the Seller (or Buyer) of Completion
After completing the transfer, some buyers forget to inform the previous owner, leaving the seller unaware of their release from liability.
Similarly, some sellers don’t update the buyer with document tracking updates.
✅ Best practice:
Send proof of the updated OR/CR once it’s under your name.
This ensures both parties are legally protected and aware of completion.
🧠 Trusting Verbal Agreements
Never rely on handshake deals when it comes to car sales. Verbal agreements have no legal weight if problems arise later.
✅ Always document everything:
- Price and payment terms
- Date of turnover
- Signatures of both parties
- Notarized Deed of Sale
Proper documentation avoids confusion and strengthens your legal protection.
🏁 Not Keeping Copies of All Documents
Always make photocopies or digital backups of every document involved in the transaction — especially receipts, IDs, and stencils.
You’ll need them for reference if LTO requests additional verification or if disputes arise.
🚦 Final Thoughts
Transferring car ownership isn’t complicated — but it does require attention to detail and proper documentation.
By avoiding these common mistakes, you’ll save yourself from delays, penalties, or even potential legal issues.
Whether you’re buying or selling, take the time to verify, document, and process everything correctly. The smoother your transfer, the sooner you can enjoy the road ahead — worry-free.
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