A car title is an important legal document that identifies a vehicle and its owner. If the car has damage, it may indicate that as well. A car title is a vital piece of documentation that you will want to keep track of, especially when it comes time to sell the car.
What is a Car Title?
The car title is a piece of paper that details the legal owner of a vehicle and vehicle data. Car titles do vary from state to state; however, there is usually some similar basic information on it, such as:
- Vehicle identification details: The vehicle identification number (VIN) is on the car title along with the manufacturer, make, model, model year, trim level, and color.
- Odometer reading: The car title is critical to a sale, and therefore any time it is issued or transferred, the current odometer reading is recorded on the title.
- License plate number: The current owner's license plate number will also be shown on the vehicle title.
- Technical details: The vehicle's gross weight and sometimes things like drivetrain, braking, and engine systems may also be listed.
- Lienholder: If you purchase the car by borrowing money, the lien holder (your lender's) information will be on there as well. They will also hold the title until you fully pay them back for the vehicle.
- Owner information: Along with the vehicle details, the owner’s name and address will also be on the title.
What Does a Car Title Look Like?
Vehicle titles vary depending on your area of the country. However, they all used to be pink, and the slang term was "pink slip." Now they come in all different colors. Some are card-sized, and others are full sheets of paper. Some look very official with a certificate style paper, and some are very plain and administrative. Some states print their titles on special security paper with hidden seals and colored backgrounds.
Different Types of Car Titles
There are various types of certificates of title. Whenever a car is damaged in a flood, fire, accident, or environmental hazard, the vehicle is issued a new "branded title." This means the previous damage has to be disclosed to anyone interested in buying the car. The various types of vehicle titles are:
- Clean: The vehicle is in good shape structurally and has never sustained any major damage due to an accident or weather condition. To be clear, it means that no insurance company has declared the car "totaled." This does not mean it has never been in a minor accident and repaired.
- Clear: The car is paid off, and there are no lienholders who hold the title and no debt against it.
- Salvage: A salvage title is issued by the state's Department of Motor Vehicles (DMV) when a car has been declared a total loss by the insurance company (the cost to repair it exceeds its current value).
- Rebuilt: When someone takes a salvage vehicle and restores it, the DMV may issue it a new rebuilt title after evaluation.
- Flood: The car has been damaged due to flood and declared a total loss by an insurance carrier.
- Lemon: The car is issued a lemon title when multiple attempts to fix a manufacturing defect prove to be pointless, and the issue remains.
- Hail Damage: The car has suffered damage due to hail, and the price to fix it exceeds the car's value.
- Fire: The vehicle has been exposed to fire and damaged, and an insurance company deems it a total loss.
How Do You Get a Car Title and Where?
When you buy a new vehicle or a used car, the current owner (dealership or private seller) must transfer the title to you. Along with your name and address, they must note the current mileage on the car. When you register your new car, you must show the DMV or town office your transferred title. They will enter the information into the system and create and issue a new title with you as the owner.
If you took out a car loan to finance the purchase, then the title will also have the lender's information on it, and it will be mailed to the lienholder. Once you have paid off the loan, the title will be mailed to you. If you buy the car with cash (no lender or financing), you will need to bring the transferred title to your DMV location or town office, and they will create a new one from the information on the back and send it directly to you.
Used Car Title: How to Transfer a Title
When you purchase a used vehicle, the seller/owner must fill out the back of the title with your name and address, the mileage on the odometer, the sale price, and the date. The back of the title has title transfer information on it. Both you and the seller will have to sign the title. Then you must take that and the bill of sale to your DMV office when you go to get your vehicle registration, and they will issue you a new one, which will be mailed to you within a few weeks. Again, if you have financed the used vehicle, your lender will get the title, and you won't see it until you have paid the car off. When a lienholder sends you the title it's called a lien release.
Can You Buy a Car Without a Title?
Technically, yes, you can buy a car without a title. Perhaps the owner has lost it, or it was accidentally destroyed. However, you take a huge risk of buying a car without a title. If the person who sold you the vehicle is not the real owner and someone does have a legitimate title, they can legally take ownership, and you'll be out the money.
To protect yourself before buying a car without a title, run the VIN through a vehicle history report website and determine who the car was registered to. This report should also give you an accurate odometer reading, so you know if that has been tampered with. Another idea would be to contact your local DMV office and give them the VIN or the owner's driver's license number so they can tell you who the legal owner is. You should also run the VIN through the National Insurance Crime Bureau website to ensure it's not stolen. It is up to the seller to provide you with proof of ownership. Be sure to get all their contact information along with the title information.
When finalizing the sale, be sure to write down all the information that would be on the car's title. Chances are if everything is legit, the DMV can issue you a new duplicate title without a problem. You will have to fill out a title application and pay a title fee.