MD DMV Vehicle Registration and Title 3 — Questions and Answers
Question 1: What excise tax rate does Maryland charge when titling a vehicle?
- 6% of the vehicle's value (Correct answer)
- 3% of the vehicle's value
- 10% of the purchase price
- A flat $100 fee
Correct answer: 6% of the vehicle's value
Maryland charges a 6% excise tax based on the vehicle's value or purchase price when it is titled.
Question 2: If there is a loan on a Maryland vehicle, what appears on the title record?
- A lien recorded in favor of the lender (Correct answer)
- The lender's tax identification number only
- A temporary title watermark
- Nothing until the loan is paid off
Correct answer: A lien recorded in favor of the lender
When a vehicle is financed, the lender's lien is recorded on the title until the loan is satisfied.
Question 3: What must you do with your Maryland license plates when you cancel your insurance and stop driving the vehicle?
- Return the plates to the MVA (Correct answer)
- Store them in the vehicle's trunk
- Destroy them yourself
- Transfer them to any family member automatically
Correct answer: Return the plates to the MVA
Plates must be returned to the MVA before canceling insurance to avoid fines and suspension.
Question 4: What can happen if you cancel your vehicle insurance in Maryland without returning your plates?
- You face uninsured motorist penalty fees and possible registration suspension (Correct answer)
- Nothing, as long as the car is parked
- Only a warning letter is issued
- Your driver's license is permanently revoked
Correct answer: You face uninsured motorist penalty fees and possible registration suspension
Maryland assesses uninsured motorist penalties and may suspend the registration when insurance lapses on plated vehicles.
Question 5: A Maryland resident buys a car from a dealer. Who typically submits the title and registration paperwork?
- The dealer, as a licensed titling agent (Correct answer)
- The buyer, in person only
- The buyer's insurance company
- The county clerk
Correct answer: The dealer, as a licensed titling agent
Licensed Maryland dealers usually process the title and registration paperwork on the buyer's behalf.
Question 6: What document proves you own a vehicle in Maryland?
- The certificate of title (Correct answer)
- The registration card
- The bill of sale alone
- The inspection certificate
Correct answer: The certificate of title
The certificate of title is the legal document establishing vehicle ownership.
Question 7: When must a Maryland bill of sale be notarized for a private vehicle sale?
- When the vehicle is less than 7 years old and sold below book value (Correct answer)
- In every private sale without exception
- Only for vehicles over 20 years old
- Only when the buyer is out of state
Correct answer: When the vehicle is less than 7 years old and sold below book value
Maryland requires a notarized bill of sale for vehicles under 7 years old sold for less than the book value.
MD DMV Vehicle Registration and Title 3
What excise tax rate does Maryland charge when titling a vehicle?