Does the Tag Stay With the Car When Sold in Alabama?

No. When you sell a car in Alabama, the tag does not stay with the car. Since January 1, 1998, Alabama law has required license plates to stay with the registered owner, not the vehicle, so every sale means the seller pulls the plate and the buyer registers the car under a plate of their own. The only real exception is a transfer to a spouse or child, where the plate can travel with the vehicle if the transfer fee is paid.¹

What the Seller Does With the Plate

Remove the plate before the buyer drives away. It belongs to you as the registered owner, and Alabama treats it that way. If you forget and the plate leaves with the car, the buyer is legally required to return it to the county licensing official rather than use it, but relying on a stranger to follow through is not a plan.¹

You also need to hand the buyer a bill of sale. Alabama’s rules spell out what belongs on it: both parties’ full names and addresses, the date of sale, a complete vehicle description with the VIN, make, year, model, and body type, the purchase price, and both signatures.² Licensed dealers have an extra requirement: the bill of sale must display, in bold conspicuous lettering, the warning “Penalty of fifteen dollars ($15) due if vehicle is not registered in the name of the new owner within 20 calendar days.”¹

Keep Your Name Off the Car After the Sale

Once the car is gone, you want your registration disconnected from it fast. If the buyer picks up toll violations, parking tickets, or gets into a crash before putting the vehicle in their own name, the trail can lead back to you as the last registered owner. Alabama doesn’t have a standalone release-of-liability form, but you can accomplish the same thing by surrendering the plate to the county licensing official and holding onto your copy of the bill of sale. If you can’t hand the plate in physically, the Alabama Department of Revenue’s Form MV 32-7A-5 (Request for Registration Revocation) formally severs the registration.³

Call your auto insurer the same day. There is no reason to keep paying premiums on a car you no longer own.

What the Buyer Does Instead of Using the Old Plate

Because the seller’s plate is not staying on the car, the buyer has to title and register the vehicle from scratch. Alabama gives you 20 calendar days from the date you acquire it. If day 20 falls on a Sunday, a legal holiday, or a day the licensing office is closed, the deadline extends to the next business day.⁴ Miss the window and you owe a $15 penalty on top of normal fees.¹

Getting the Title

Apply for the Alabama certificate of title through a Designated Agent of the Alabama Department of Revenue. Designated Agents include county license plate issuing officials, licensed Alabama motor vehicle dealers, and Alabama-based financial institutions. Bring the existing certificate of title (or the manufacturer’s certificate of origin for a new vehicle) in your name or properly assigned to you. The title application fee is $15.⁵

The name on your application must match the name on the assigned title exactly, including suffixes like Jr. or III. Joint ownership matters too. If the title lists two owners connected by “and,” both must sign; if connected by “or,” only one signature is needed.⁵

VIN Inspection and Insurance

If the vehicle isn’t already titled in Alabama, the Designated Agent must physically inspect it to confirm the VIN matches the paperwork before processing the title application.⁶ Even when only a registration is needed and no new title, the licensing official or a deputy must inspect the vehicle and ownership documents each time ownership changes.⁷

Proof of Alabama liability insurance is also required before registration. Since January 1, 2013, licensing officials check coverage through the state’s Online Insurance Verification System, and if the system can’t confirm your policy you’ll need to show an Alabama insurance card at the counter.⁸ Without active coverage on file, you won’t walk out with plates.

The One Exception: Transfers to a Spouse or Child

Alabama carves out a narrow family exception to the plate-stays-with-owner rule. When you give or sell a vehicle to your spouse or child, you can choose to let the plate stay on the vehicle, provided the transfer fee is paid. That is the only routine situation where the tag legally travels with the car to a new owner.¹

When the Owner Dies

If the registered owner has passed away, a surviving spouse can keep operating the vehicle by applying for a certificate of title in their own name within 20 days of obtaining ownership. If the vehicle carried a distinctive or fee-exempt plate, that plate must be surrendered and a new registration obtained.¹ For an estate that goes through probate, the personal representative provides the Designated Agent with a copy of the letters testamentary or letters of administration from the probate court. If the estate will not be probated, a Next of Kin Affidavit (Form MVT 5-6) and a copy of the death certificate take their place.⁵

What Happens to Your Plate When You Buy Another Car

Because the plate stays with you, you’ll want to move it to your next vehicle. If the replacement is in the same registration classification, the licensing official authorizes the transfer for the rest of the current license year, and you don’t pay for a whole new plate.¹

If the new vehicle falls into a higher classification, you surrender the old plate, pay the difference in registration fees prorated by month for the rest of the license year, and receive a new plate at the higher class.¹

Going in the other direction is where people get burned. If you move to a lower classification, Alabama does not refund the difference, and the plate is revoked unless you transfer it to another vehicle in the same or a higher classification.¹ Trade a heavy-duty truck for a sedan, and the value remaining on the truck’s plate is gone.

And if you buy a used car only to find the seller’s plate still bolted to it, you cannot use that plate even temporarily. You’re required to return it to the county licensing official.¹

Penalties for Ignoring These Rules

The $15 late fee is the small part. It applies whenever someone fails to register a vehicle or transfer a plate within the required timeframe, and the money goes into a special county training fund capped at $3,000 per fiscal year, with any excess flowing to the county general fund.¹

The bigger stick is criminal. Failing to perform any duty required under Alabama’s license plate transfer statute is a Class C misdemeanor.¹ A Class C misdemeanor in Alabama carries up to three months in jail⁹ and a fine of up to $500.¹⁰ A first-time late registration is not going to send anyone to jail, realistically, but the charge exists as a backstop against people who habitually ignore these rules or engage in title jumping, reselling vehicles without ever putting them in their own name.

1
Alabama Legislature. Alabama Code 40-12-260 – Transfer of License Plates; Registration Procedures; Receipts; Penalty
2
Alabama Department of Revenue. 810-5-1-.246 Bill Of Sale, Invoice Or Other Sales Document
3
Alabama Department of Revenue. What do I do if I sold the vehicle I received the insurance verification request for prior to the date for verification?
4
Alabama Department of Revenue. I just acquired a vehicle. How many days do I have to title and register this vehicle?
5
Alabama Department of Revenue. Title Applications
6
Cornell Law Institute. Alabama Admin Code 810-5-75-.36 – Responsibilities Of Designated Agents
7
Alabama Department of Revenue. What are the prerequisites for registering a vehicle in Alabama?
8
Alabama Department of Revenue. Is the registrant required to prove that he/she has liability insurance when registering a motor vehicle?
9
Alabama Legislature. Alabama Code 13A-5-7 – Sentences of Imprisonment for Misdemeanors and Violations
10
Alabama Legislature. Alabama Code 13A-5-12 – Fines for Misdemeanors and Violations