What Is the Title of a Car?
Definition & Examples of Car Titles
The title of a car is a legal document that provides proof of ownership of a vehicle and other important information, including the vehicle identification number (VIN). A title may be an actual piece of paper or an electronic document.
Learn more about the reasons why a car title is a crucial document for motor vehicle owners and how it can be transferred.
What Is the Title of a Car?
Without the title of a car, you have no proof you own your vehicle. The information on it varies slightly according to the state in which the title is obtained, but it will always include the 17-character VIN.
The VIN is typically located on the driver's side door, viewable when the door is open, or on the dashboard when looking into the car while standing outside.
The title will also generally include the year, make, and model or body type of the vehicle and its color. It should have an odometer reading and the date on which the odometer reading was done. And it will give the owner or owners of the vehicle and their address and the date on which the title was issued.
The title may also include a title number, the weight of the vehicle, the number of cylinders in the engine, the engine number, the type of fuel used in it, and the license plate number. And it should have the signature of one or more state officials in charge of motor vehicles or revenue collection.
Alternate name: Certificate of title
If you lose your title, contact your state motor vehicle agency for a duplicate. You may be able to initiate the process online or you may have to go in person to a state or county office.
How Does the Title of a Car Work?
Being able to verify possession is important in case a crime involving the car was committed before you owned the vehicle or after you sold it. It is also critical to be able to prove ownership if your vehicle is stolen or if you want to sell it.
In most cases, the title certificate is kept by the provider of the car loan until the vehicle is paid off. Sometimes, the title is sent to the buyer who currently has the car in their possession, but the name of their lender will appear on the title.
When you buy a new car, the dealer will almost certainly handle the process of getting the title, as well as the registration and license plate, for a fee that should be disclosed as part of the purchase price.
As of September 2020, 24 states participated in an electronic lien and title (ELT) processing program. These systems enable state motor vehicle agencies to provide digital titles to car owners and lenders to share information about liens on vehicles with the state agencies.
How to Transfer a Title
The title will have a section that enables the buyer and seller of a vehicle to provide information detailing the change in ownership. The parties will typically have to provide their full names and addresses, the purchase price, date of purchase, and the odometer reading, and they will need to sign the document. The buyer will need to provide information on their lender, if applicable.
Some states require title transfers to be notarized. And state laws differ according to how to fix something you incorrectly wrote on the title. Some states make you get a duplicate of the original title and start the process over. Other states let you draw a line through the incorrect information and write the correct info above it, though you may be required to fill out a form explaining the nature of the mistake.
The buyer is ultimately responsible for getting a new title in their name from the state in which they reside and should determine the necessary information and steps by consulting their state's motor vehicles website. The buyer should receive a bill of sale from the seller and a copy of the signed-over title.
The bill of sale should include the date and location (city/town and state) of the purchase, a description of the vehicle, the names and addresses of the buyer and seller, and their signatures.
Prior to signing anything, the buyer should verify the VIN on the title matches the VIN on the car itself. They should also look up the VIN in their state's online motor vehicle database to make sure there are no liens against the vehicle that the seller didn't disclose.
The seller should retain copies of the signed-over title and the bill of sale for their own legal protection.
Types of Car Titles
You may see four adjectives applied to a car title: clean, clear, salvage, and rebuilt. If you're in the market for a used car, you should know that the first two are positive descriptions and you should probably avoid a car with either of the last two types of title.
- Clean: This means that the vehicle has never been in a major accident that resulted in the car being considered "totaled" by an insurance company. An insurer would consider a car vehicle to be a total loss if it sustained so much damage that it would cost more to fix it than the vehicle is worth or would cost a high percentage of the vehicle's worth to fix it.
- Clear: This means that there's no lien against the vehicle and the owner owns it free and clear.
- Salvage: This type of title means that the car was declared to have been a total loss. In issuing a salvage title, a state is likely declaring that the vehicle may not be driven or sold in its current condition.
- Rebuilt or reconstituted: This type of title is for a salvage-titled vehicle that was repaired. The vehicle may be in fine shape, but it also may have been repaired on the cheap and might require additional repairs down the road.
A vehicle with a rebuilt title may be inexpensive, but the cost of insuring the car will often be much higher than for a car with a clean title.
- The title of a car is a legal document that provides proof of ownership of a vehicle.
- The information found on a title differs by state but always includes the VIN.
- In most cases, the purchaser of a car will not receive the title until they have paid off their auto loan.
- When a car changes hands, the buyer must obtain a new title from the state they live in after the existing title is transferred to them by the seller.