Cancel Your License Plates the Right Way (and Protect Your Auto Insurance)
Did you know that failing to properly cancel your license plates can lead to surprise fines or even ongoing auto insurance charges, according to the Department of Motor Vehicles (DMV)?
If you’re selling your car, moving to a new state, or retiring a vehicle, it’s important to understand the exact steps to cancel your plates. Doing it right prevents penalties, protects your insurance, and keeps you from being held liable for a car you no longer drive.
This guide walks you through when and why to cancel, step-by-step instructions, the most common mistakes, and special cases—so you can handle the process with confidence.
5 Situations When You MUST Cancel Your Plates
- Selling or Trading In Your Car – If the buyer uses your plates, you could still be legally and financially responsible.
- Moving to Another State – Many states issue fines if you don’t cancel old plates.
- Taking a Vehicle Off the Road – Prevent insurance confusion and reduce fraud risk.
- After a Total Loss Accident – Ensure your insurer closes your policy correctly.
- Switching to Antique or Custom Plates – Avoid duplicate registrations and extra fees.
Step-by-Step: How to Cancel Your Plates
According to the National Highway Traffic Safety Administration, cancellation rules vary by state, but most follow a similar process:
- Return your plates to the DMV. You can drop them off in person or mail them (check your state’s DMV site for details).
- Complete a plate cancellation form. Some states require it—download the correct version before you go.
- Provide proof of insurance changes. Your insurance company may need confirmation that the plates are canceled.
- Pay any outstanding fees. Clear unpaid tickets or penalties linked to your plates.
Key Considerations for Auto Insurance
- Insurance First? Not So Fast. Never cancel your auto insurance before turning in your plates. Doing so could suspend your registration and trigger fines. Cancel plates first, then adjust or end your policy.
- Documentation Matters. Keep receipts, take photos of surrendered plates, and store all cancellation paperwork safely.
- Timing is Everything. Align plate cancellation with your car sale, insurance changes, or state move to avoid coverage gaps.
4 Common Mistakes (and How to Avoid Them)
🚫 Mistake 1: Throwing Plates Away
👉 Always return plates to the DMV. Tossing them in the trash can leave you liable.
🚫 Mistake 2: Canceling Insurance Before Plates
👉 Always cancel plates first—then update your insurance to avoid suspension and fines.
🚫 Mistake 3: Ignoring Address Updates
👉 An outdated DMV address means you could miss critical notices about fees or violations.
🚫 Mistake 4: Assuming the Dealership Handles It
👉 Some do, but many don’t. Always confirm with your DMV to be safe.
Special Situations
- Total Loss Accident – Wait for your insurance settlement before canceling plates.
- Moving States – Research new state rules before canceling old plates.
- Vehicle in Storage – Consider storage insurance instead of canceling plates completely.
- Electronic Tolls – Remove canceled plates from automatic toll payment accounts.
Steps to Success
- Contact your insurance agent.
- Gather documents and forms.
- Return plates (in person or by mail).
- Keep all receipts and confirmations.
- Verify cancellation with the DMV.
Final Tips
Never hand your plates to a buyer—always surrender them directly to the DMV. For extra protection, request a notarized cancellation receipt.
When done correctly, canceling your plates helps you avoid costly penalties, insurance issues, and legal headaches. Don’t risk unexpected bills—cancel your plates the right way and drive forward with peace of mind.