LTO to impose up to PHP40K penalty if you don't transfer vehicle registration

The Philippines has a very huge used car market. A quick search on Google revealed that in 2023, the country’s used car market is estimated to be valued at PHP 4.35 billion and will continue to grow in the coming years.

That said, millions of used vehicles are flooding the market. As such, vehicle titles (Certificate of Registration or CR) must be updated with the Land Transportation Office (LTO) once the sale is closed.

But then again, we’re in the Philippines, where many think that rules are “optional” and will do the easier and much shorter way of transacting with an “Open Deed of Sale.” Well, the LTO wants to end this and reiterated that vehicle titles must be transferred to the new owner, in accordance with the law.

An Open Deed of Sale is where only the owner named in the CR is signed, while the second, or third and other owners which the vehicle changed hands are not.

Up to PHP 40K fine

Just recently, the LTO issued Administrative Order AO-VDM-2024-046 with the subject: Guidelines in the immediate transfer of ownership of motor vehicles with existing registration.

Basically, the vehicle Transfer of Ownership is clearly outlined in Republic Act 4136 or the Land Transportation and Traffic Code and Republic Act 10883 or the Anti-carnapping Law; as well as for motorcycles in Republic Act 11235 or the Motorcycle Crime Prevention Act aka Doble Plaka Law.

The LTO gives only 20 days upon the completion of the sale, transfer, or donation of the motor vehicle or motorcycle, where the new owner must complete the transfer of ownership process. Failure to do so may result in the vehicle being put under alarm and a fine of up to PHP 40,000.

This is also done to clear the previous owner of any liability if the vehicle or motorcycle is involved in an accident or crime.

Seller required to report the sale

After the sale of the used vehicle or motorcycle has been completed, the seller also has a duty to fulfill at LTO. Administrative Order AO-VDM-2024-046 specifies that the seller has 5 days from the actual sale, donation, or transfer to report the sale/transfer of ownership with the LTO.

The reporting will be done via online submission of copies of the Official Receipt (OR) and Certificate of Registration (CR), duly notarized Deed of Sale (DOS), and 2 valid government-issued IDs of buyer and seller.

The full text of the Administrative Order AO-VDM-2024-046 can be accessed here.

UPDATE: LTO has deferred this Administrative Order