When you buy a new vehicle in the United States, you sign several documents. among them is the title of your new car. what is a car title A car title is one of the most important documents because it is the legal form that formally makes you the owner of your vehicle. You receive a title whether you buy a new or used vehicle from a dealer or a private citizen.
car title basics
by auto direct, the title of your new car comes from the state where you bought the car. If you live in a different state, be sure to take it to your local Department of Motor Vehicles when you register the car in your home state. If you’re buying a car out of state, make sure you understand the title process. Regardless of the state process, each title typically includes the same information:
- If you buy a car with a lien against it, the lien holder information is on the title. this is to ensure that the debt is paid before the car is sold.
- Vehicle identification information such as chassis number, make, model, and year.
- >plate number.
- technical information, such as gross weight.
- owner’s name and address.
When a vehicle is built, it has a clean title. if there are life events or damage, then that title changes to reflect the information for future owners to know the history of the vehicle.
types of car titles
according to direct auto, there are four types or brands of titles. although the exact wording may vary depending on where you live.
- clean: everything is fine and the car is structurally in good condition.
- clear: there is no debt against the car.
- salvage: this is the title of a wrecked car that you may have trouble getting insurance for due to damage.
- Rebuilt or Rebuilt: If a salvage car has been repaired enough to drive safely, the title is upgraded to Rebuilt.
Depending on the road and track, there are other title markings, such as the lemon law buyback. If you bought a car under your state’s lemon law and it wasn’t marked lemon on your title, you can retitle it as a lemon law buyback.
warning signs to watch out for
Do your due diligence before purchasing any type of used car from a lot or a private citizen.
- Ask to see the title and make sure it’s legal in the state you’re buying the car in.
- Do a history report. use the vin number on the title.
- have your mechanic check the car.
- watch for the title wash. According to Carfax, title laundering is the process of ‘cleaning’ a vehicle’s title before reselling it.
Your title has been lost, destroyed or stolen: what do you do?
As much as we try to protect important papers, sometimes life happens. If your title is lost, destroyed, or stolen, take a deep breath. you can replace it. Whether you request the duplicate online or in person, there is some information you will need to have on hand.
- your license.
- any loan information.
- your title payment method.
buying a new car: what about the title?
When you buy a new car, there’s a good chance you’ll finance it. if this is the case, you will not receive the title that day. it will be mailed to you once you finish paying for the vehicle.
your title and other important documents
You don’t need a car title to get vehicle insurance. Registering a car does not mean that you have physical possession of the title. you just need to have the information required for the document like the vin and your driver’s license. You will also need proof of ownership if the vehicle is for rent or on loan.
transfer a title to a new state
If you move after purchasing your vehicle, you will need to transfer the title to your new state. Before going to the local dmv, make sure you have all the necessary documents on hand, including:
- forms you can find online through the state dmv site.
- new license and tag.
sell or exchange the vehicle
If you’re ready to sell or trade in your current vehicle, your title will change hands. there is a space in the document to legally record the transaction.
flip the title and you will find the space for the transfer information. this applies to both the sale and trade-in of your car. according to kelly’s blue book, you will need:
- your name and address.
- the buyer’s name and address.
- mileage reading.
- sale price.
This is a permanent record and cannot be changed. make sure you have clear and accurate information written legibly.
once you complete the transaction, keep a copy of the title. this protects you if there are any problems with the processing of the sale or exchange. it also protects you if the vehicle is involved in a crime. If you sell or trade the vehicle on a car lot, you will likely never see the new owner. in this case, it is up to the dealer to prove that you are no longer the legal owner.
One practice to keep in mind, whether you’re buying, selling, or trading in your car, is title skipping. according to itstillruns, this is an illegal practice. if you don’t register your title and sell it after you buy it, the title skips because there is no legal record of your ownership.
There are times in life when you may find yourself in a financial bind. If you find yourself in this situation, you may want to consider getting a high-interest title loan. As its name indicates, it is necessary to have the title in hand to apply for the loan. you will get it back once you pay off the loan. You will also need to leave a set of keys with the person through whom the loan is made.
The title of your car is one of the most important documents you will have. protect it while you own the vehicle. never put it in the glove box, but know where it is for when you need it.
Information and research in this article verified by ASE Certified Master Technician Duane Sayaloune of yourmechanic.com. For any feedback or correction request, please contact us at [email protected].