To sell a trailer in Michigan, you sign over the certificate of title if the trailer’s empty weight is 2,500 pounds or more, or sign over the registration if it’s lighter. You also remove your license plate, give the buyer a bill of sale, and keep copies of everything so you aren’t held responsible for a trailer you no longer own. The Secretary of State handles the transfer on the buyer’s end, but the paperwork you hand over has to be right before they walk in the door.
Title or Registration: Which One You Transfer
Michigan draws the line at 2,500 pounds of empty weight. At or above that, the trailer has a certificate of title, and the title is what transfers ownership.1Michigan Legislature. Michigan Code 257.216 – Vehicles Subject to Registration and Certificate of Title Provisions Under that weight, there’s no title; the registration certificate does the job.
Trailer coaches, including pop-ups, travel trailers, and fifth wheels, always require a title regardless of weight. Michigan trailer plates are permanent, so the plate doesn’t expire while you own the trailer, and the plate fee is set by empty weight.2Michigan Department of State. Recreational Vehicles and Watercraft Find whichever ownership document applies to your trailer before you list it.
What to Have Ready Before You Meet the Buyer
Have these in hand:
- The certificate of title, for trailers 2,500 pounds and up. If a lien is still printed on it, you also need a lien release.
- The registration certificate, for trailers under 2,500 pounds, since that’s the transfer document when there’s no title.
- A bill of sale. Michigan’s form TR-207 covers it and asks for the year, make, serial number, registration number, and purchase price.3Michigan Secretary of State. TR-207 – Bill of Sale
- A driver’s license or state ID for both you and the buyer.4Michigan Department of State. Buying, Selling, or Leasing
Odometer disclosure doesn’t apply. Michigan exempts vehicles that aren’t self-propelled, so trailers don’t need a mileage statement.5Michigan Legislature. Michigan Code 257.233a – Odometer Mileage Statement Before the buyer arrives, check that the serial number on the paperwork matches the number stamped on the trailer’s frame. Mismatches turn a quick Secretary of State visit into a long one.
Signing the Title Over
On a titled trailer, fill out the Assignment of Title section on the back of the certificate. Michigan law requires the seller to endorse the assignment with a warranty of title, state any security interests, and deliver the certificate to the buyer at the time of sale.6Michigan Legislature. Michigan Code 257.233 – Certificate of Title Sign your name exactly as it appears on the front. Print the buyer’s full legal name and current address, along with the date and purchase price.
For a non-titled trailer, the same idea applies to the registration certificate: sign it over to the buyer and record the sale details on the document.
Write clearly and don’t correct mistakes with white-out or cross-outs. The Secretary of State can reject an altered title outright. If something goes wrong, the cleanest fix is for you and the buyer to go to a branch office together so staff can help sort it out. Otherwise you may have to apply for a corrected or duplicate title before the sale can close.
If Your Title Is Lost or Has a Lien
Lost or Damaged Title
You can’t sell without the title in hand. Michigan offers three ways to replace it:7Michigan Department of State. Title Replacement/Duplicate
- Online, $15, mailed in about 14 days.
- In person at a branch, $15, still mailed in about 14 days.
- In person for the instant option, $20, same day.
If a buyer is ready now, the $20 instant title is usually worth it. Otherwise, plan on a two-week wait.
Lien on the Title
You cannot transfer a title with an active lien until the lienholder releases it. On a paper title, that means a lien release letter from the lender showing the VIN and confirming the loan is paid, or the lender stamping and signing the title itself.8Michigan Department of State. Titles If the lienholder is still printed on the title when you sell, give the buyer the release letter along with the title.
Electronic titles work differently. If your lender uses Michigan’s Electronic Lien and Title program, the release has to happen electronically; a paper letter won’t do. Once the lender releases the lien, a paper title prints and is mailed to you.8Michigan Department of State. Titles Start that payoff well before you plan to sell.
Pull Your Plate and Keep Proof of the Sale
Take the license plate off before the buyer takes the trailer. Michigan requires it.4Michigan Department of State. Buying, Selling, or Leasing The plate belongs to you, not the trailer. You can move it to another vehicle you own, or destroy it by cutting or bending it. Don’t let the buyer use it to get the trailer home; anything they do while your plate is on it can come back to you.9Michigan Department of State. License Plates and Tabs
One exception: when the trailer is transferred to an immediate family member, the plate can stay on it.4Michigan Department of State. Buying, Selling, or Leasing
Then keep your paperwork. Hold a copy of the signed title and the bill of sale for at least 18 months. Under Michigan law, a seller with proof of sale is not liable for damages or violations if the buyer never bothers to put the title in their own name.4Michigan Department of State. Buying, Selling, or Leasing A photocopy of the signed title plus the bill of sale is enough.
What the Buyer Will Owe
The tax and fee burden falls on the buyer, but knowing what they’ll pay helps you set expectations during the sale. At a Secretary of State branch, the buyer pays:
- A 6% use tax on the purchase price or the trailer’s retail value, whichever is higher. Treasury makes the final call on the taxable amount.10Michigan Legislature. Michigan Code 205.93 – Tax Rate
- A one-time permanent registration fee based on empty weight.2Michigan Department of State. Recreational Vehicles and Watercraft
- A title fee, if the trailer requires a title.
The buyer has 15 days from the date of sale to complete the transfer. After that, a late fee kicks in and the Secretary of State can repossess the plates.4Michigan Department of State. Buying, Selling, or Leasing Michigan does let a buyer drive a newly purchased trailer home without a plate for three days, but only by the most direct route and only while carrying the assigned title and proof of insurance.9Michigan Department of State. License Plates and Tabs
If the buyer is a qualifying relative, a use tax exemption may apply. Michigan limits this to spouses, parents, children, siblings, grandparents, grandchildren, step-relatives while the marriage is intact, in-laws, and legal guardians. Aunts, uncles, cousins, nieces, nephews, and former spouses do not qualify, and a false claim can bring a penalty of up to 100% of the tax owed.11Michigan Department of Treasury. Transferring a Vehicle Title to a Relative
Selling a Homemade or Custom-Built Trailer
If you built the trailer yourself and it was never titled, the state treats it as an assembled vehicle. Before it can be titled and registered, someone has to produce bills of sale or ownership documents for the major components (frame, axles, wheels, any body), have a Michigan police officer complete an on-road equipment inspection on form TR-54, and take the trailer to a public scale for a weight slip. Processing runs 8 to 10 weeks, with a $10 fee for the state-assigned VIN sticker, and the trailer can’t be driven on public roads during that window.12Michigan Secretary of State. Instruction for Titling an Assembled Vehicle BFS-72
Handling the assembled-vehicle titling yourself before you list makes the sale far easier for a buyer and usually gets you a better price.
Federal Tax Reporting on the Sale
Most trailers sell for less than the seller paid, since they depreciate. A loss on a personal-use asset isn’t deductible and isn’t reported to the IRS. If you sell for more than your adjusted basis (what you paid plus qualifying improvements), that profit is a capital gain reported on Form 8949 and Schedule D.13Internal Revenue Service. Topic No. 409, Capital Gains and Losses That’s uncommon outside specialty or vintage trailers.
One rule to know if you sell trailers regularly: receiving more than $10,000 in cash for a trailer while acting in a trade or business triggers IRS Form 8300. “Cash” here includes cashier’s checks, bank drafts, and money orders with a face value of $10,000 or less when used in a designated reporting transaction involving retail sale of personal-use property priced above $10,000.14Internal Revenue Service. href=”https://www.irs.gov/newsroom/understand-how-to-report-large-cash-transactions” target=”_blank” rel=”noopener”>Understand How to Report Large Cash Transactions A one-off private sale generally doesn’t hit that trigger, but frequent buying and selling can push you into trade-or-business territory.