Moving to a new state can be a stressful experience. If you own a car financially enough, you can usually move the car through state lines as long as your loan agreement doesn’t have other provisions. However, you may have problems preparing and registering the car in a new state because of the different insurance and ownership requirements. Consider the various problems you may face when moving a funded car out of state so you can plan ahead.
Lenders and State Rules
You can’t keep your car with your name in its old state after you request residency in a new state. Depending on the state you move to, you may have to refinance the vehicle if your current lender (the holder of the pledged property) is not licensed to operate in your state. When traveling, many states require previous drivers to return their license plates. If you don’t plan ahead, you may find yourself unable to transfer ownership and registration of your vehicle before finding a new holding rights holder licensed to do business in your state.
As long as you maintain full coverage with the right limits and deductibles, you won’t default on your loan. However, when you change your driver’s license to a new state, you must also transfer the policy to a new address. Since you will have to change the address of your current insurance policy or transfer your policy to a licensed provider operating in your new state, your insurance provider will electronically update your policy change with your former state’s motor vehicle base. To avoid a fine, you must cancel your registration immediately or return the license plate, depending on the requirements of the former state.
Exceptions and possible penalties
If your state allows non-temporary residency, you can move to another state and keep your vehicle registered, titled, and covered in your former state. Eligible non-resident drivers include college students or military personnel, so check with the state’s motor vehicle facility if you think you can qualify. Many states impose fines on new residents who do not apply for a driver’s license or rename the vehicle for a certain number of days from the date of travel. Depending on your former state’s regulations, you may see your driver’s license suspended if you don’t cancel your registration after moving out. You cannot apply for a driver’s license in another state when another state has issued a suspension.
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