LTO’s 20-Day Transfer Rule Explained
Bought or sold a vehicle? You now have 20 days to make it official with the LTO, according to their newly revised policies.
Aiming to curb illegal vehicle transactions and improve accountability on the road, the Land Transportation Office (LTO) has issued, paused, and resumed Administrative Order No. AO-VDM-2024-046, mandating stricter rules for the transfer of vehicle ownership in the Philippines.
These measures are expected to impact not only private individuals but, more notably, used car dealerships.
This is part of the government's effort to crack down on the increasing use of untitled vehicles in crimes or fraudulent transactions. For used car dealers in particular, the new law signals the end of many informal practices that have long been tolerated in the secondhand auto market.
The updated policy came into effect on May 24, 2025.
The Key Details
Under AO-VDM-2024-046, the LTO now requires that any transfer of ownership, whether by sale, donation, or other legal means, must be both reported and officially registered within specific time frames.
For sellers, the rule is clear: they must report the sale to the LTO within 5 days after the Deed of Sale is notarized or after handing over the vehicle, whichever happens first. This report is done through the LTO's online portal and requires key documents like the OR/CR, the notarized Deed of Sale, and valid IDs.
For buyers, the responsibility is even greater. They must transfer the vehicle's ownership to their name at the LTO within 20 working days. This includes securing a police clearance (PNP-HPG), a vehicle inspection report, proof of insurance, and paying the required fees. The 20-day countdown starts from either the date on the notarized Deed of Sale or the day the vehicle was turned over, whichever came first.
Failure to meet these deadlines comes at a cost. Penalties now start at ₱5,000 and may increase depending on the type of violation and delay. On top of that, the LTO may place an alarm tag on the vehicle and the driver's license of the seller or buyer, which can delay license renewals or future vehicle registrations.
The Timeline
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August 30, 2024
The LTO issues Administrative Order No. VDM-2024-046, requiring buyers to transfer vehicle or motorcycle ownership within 20 working days. Non-compliance can result in penalties reaching up to ₱40,000.
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October 23, 2024
The order is temporarily suspended following public concerns over tight deadlines and procedural delays.
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December 2, 2024
During a public consultation, the LTO outlines solutions to streamline the inter-office confirmation process, one of the main bottlenecks in ownership transfers.
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May 9, 2025
President Ferdinand R. Marcos Jr. signs a law amending the Motorcycle Crime Prevention Act. It formally requires motorcycle buyers to transfer ownership within 20 working days, aligns with the LTO's directive, and reduces certain fines to encourage compliance.
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May 24, 2025
The 20-working-day rule takes effect, but only for vehicles and motorcycles acquired on or after this date. Although the enabling law highlights motorcycles, the resumed enforcement extends to all types of motor vehicles, including cars, consistent with LTO's broader administrative policy.
For those purchased before May 24, owners have until their next registration renewal to complete the transfer.
The Strengths and Shortcomings
There's no doubt that this closes a long-standing legal grey area that allowed vehicles to change hands multiple times without proper registration. This not only complicated liability in road accidents but also hindered police investigations when vehicles were involved in crimes.
From the LTO's perspective, these reforms should lead to a more reliable national vehicle database, where registered ownership reflects actual possession and use. It will also protect consumers from unknowingly buying vehicles with legal issues.
The new order does come with some adjustments. For individual sellers and buyers, the process may feel more involved, especially with the need for clearances and some in-person steps. For used car dealers, it means rethinking long-standing practices to comply with the new rules.
The Impact on Used Car Dealers
For years, it has been common practice for used car dealers in the Philippines to keep vehicles under the original owner's name until a buyer was found. This delayed registration helped minimize costs, especially transfer taxes and LTO fees, while vehicles sat idle in inventory.
The new 20-working-day deadline, however, puts an end to that system.
Dealers are now required to either:
- Transfer vehicles into their name shortly after acquisition, even without a buyer lined up, or
- Ensure the end buyer is recorded as the transferee and completes the transfer, all within the strict 20-working-day window.
This forces a shift in business operations. Dealers must be prepared to process documentation quickly. Those who fail to adjust risk paying thousands in penalties per unit, plus administrative issues that could disrupt their operations.
While large, established dealerships may have the capacity to adapt, smaller dealers may find it more challenging to meet these new requirements.
The Road Ahead
While this new policy may take some getting used to, it's also a big step toward improving the used car market in the Philippines. Over time, it can help build a more professional system where ownership is clearly documented and easier to trace.
For used car dealers who are ready to adapt, this could be a great opportunity. By updating their processes and helping customers navigate these changes, they can stand out in a market that's becoming more organized and trustworthy.
For individual motorists, this also means assurance in knowing that vehicles are properly registered and legally accounted for. It reduces the risk of being unknowingly linked to unresolved violations, unpaid dues, or criminal activity involving past owners.
In the long run, a well-regulated vehicle registry benefits everyone: cleaner records, safer roads, and a stronger automotive ecosystem.
