Car Insurance Reviews

Types of Car Titles: Everything You Need to Know

According to, a car title, also called a pink slip, is a state-issued document that acts as a certificate of legal ownership. When a customer purchases a vehicle, the title of the car is transferred from the car dealer to the new owner of the car. over the life of a car, its title will change based on its condition.

what are the main types of car titles?

The most used car titles are:

  • Clear Title: This establishes that the vehicle does not have any outstanding finance charges of any kind that would prevent its sale. it is the most desirable car title and, in many cases, the only one that makes you eligible for a car loan.
  • Salvage Title: This is issued to a car with a significant decrease in value as a result of a significant accident, subsequent repair or theft. A car must be given a salvage title if it loses more than 75% of its original value. says that having a salvage title lowers a car’s value, which usually means it’s no longer eligible for financing. The salvage title is usually issued by the car’s insurance company and may even be issued to cars with little or no damage. as long as they can pass a safety inspection, cars with this title are legal to drive.
  • junk title: a junk title is issued to cars that are have been sold to scrap yards and will be sold for scrap or disassembled for parts. in some states, junk titles are considered the same as salvage titles.
  • Warranty Title: This title is given to cars that are missing warranty documents. ownership, with a surety bond equal to the value of the car is delivered to the new owner. This assures the owner that he will be financially protected if any future property claims arise. a warranty title is good for three to five years.
  • rebuilt title: this is for cars that have undergone significant repairs or conversions. is issued by the insurance company or the place where the repair or conversion was performed, such as a collision center, body shop, or licensed vehicle rebuilder. after being inspected and deemed safe for public roads, a rebuilt vehicle may be registered for normal use.
  • Affidavit Title: This title is granted under an affidavit in situations where the car documents are missing.
  • Rebuilt Title: is similar to a rebuilt title and is for vehicles that have been significantly rebuilt. As with the rebuilt title, it is issued by the insurance company or the place where the rebuild was performed, such as a collision center, body shop, or licensed vehicle rebuilder. the vehicle is legal for use on public roads if it passes a safety inspection.
  • Water Damage Title: This title is issued to vehicles that have sustained significant water damage. water, perhaps as a result of electrical storms, flash floods, hurricanes, or other similar weather events. Even if you don’t live near areas where these things happen, it’s a good idea to have your vehicle inspected for water damage.
  • Odometer Reversal Title: This title is issued a vehicle that has had the odometer secretly and illegally turned around so that it reports less mileage than the car actually has. a competent mechanic can usually determine if a reversal has occurred.
  • Scrapped Title: According to, a stripped title is similar to a salvage title and is awarded to cars that have been damaged beyond the point where repairing them would make financial sense. When the cost of the repair is greater than the value of the vehicle, a salvage title is needed to sell the remaining valuable parts of the car.
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Any attempt to change or obscure a car’s designated title is illegal and is known as “title laundering.” this is intended to discourage car dealers who might want to sell damaged cars for more than they are currently worth.

what is a certificate of destruction? confirms that when an insurance company pays a damaged vehicle claim and you become the rightful owner, they have the legal right to issue a certificate of destruction, which means the vehicle will never be registered for your use on public roads. again and is scheduled for destruction. situations where a vehicle with a certificate of destruction issued would receive a valid title are highly unlikely.

Some vehicles that have a certificate of destruction may appear to be in good condition for use on public roads. however, the insurance company may choose to prevent the car from being used on public roads to eliminate the risk of it being involved in a traffic accident in the future. From the insurance company’s point of view, the risk is that an accident could be caused by a pre-existing vehicle defect and damaged parties could claim that the car should never have been returned to public roads.

The likely reasons an insurance company would issue a certificate of destruction for a vehicle that appears to be in working order are commonly related to possible hidden faults, such as a damaged airbag system, a defective frame, or any other reason for a potential malfunction.

what is a title mark?

As Car Connection mentions, a title mark is an indication that a used vehicle has sustained previous damage and may be dangerous to drive. titles are only issued by state agencies and are official indications that a vehicle has suffered certain events that have altered its original condition.

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what is a lemon title mark?

A car is often called a “lemon” when it has many critical mechanical problems. The exact amount of mechanical malfunction that makes a car a lemon is regulated differently from state to state, and some states have no such regulation at all. As a general rule, a lemon is a car that has suffered multiple failures of the same mechanical part while under warranty, the respective part being essential to the safety or driveability of the car.

A car does not have the lemon mark right away, as the manufacturer will have an opportunity to remedy the recurring problem. if the problem reappears, even after several repair attempts, then the car can rightfully be called a lemon.

Buying a used car can turn out to be a very good deal if you know how to select a good one. Knowing exactly what each car title represents is the first step to getting a good vehicle at a fair price.

Information and research in this article verified by ASE Certified Master Technician Duane Sayaloune of For any feedback or correction request, please contact us at [email protected].


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