Definition and Example of a Car Title
The title of a car is a document that proves the ownership of a vehicle. Without it, you have no proof you own your vehicle.
- Alternate name: Certificate of title
The information on a car title 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
- Vehicle color
- Odometer reading
- Date on which the odometer reading was done
- Owner or owners of the vehicle
- Owner's address
- 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.
Some states require that information about flood damage or salvage be included on a car title, but others do not.
A car title should have the signature of one or more state officials in charge of motor vehicles or revenue collection.
How Does the Title of a Car Work?
The title of a car verifies who owns it, which is important if:
- Your vehicle is stolen
- You want to sell your car
- Your car is impounded
- The vehicle was used in a crime before you owned it or after you sold it
When you buy a new car from a dealer, the dealer will almost always handle the process of getting the title, as well as the registration and license plate. There will be a fee for this service that should be disclosed as part of the purchase price.
If you buy a car from a private owner, you will have to handle this process yourself.
If you have a car loan, the title certificate usually will be 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.
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.
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.
Types of Car Titles
You may see four adjectives applied to a car title: clean, clear, salvage, and rebuilt.
- Clean: The vehicle has never been in a major accident that resulted in the car being considered "totaled" by an insurance company.
- Clear: There is no lien against the vehicle, and the owner owns it free and clear.
- Salvage: The car was declared to have been a total loss. In issuing a salvage title, a state is often declaring that the vehicle may not be driven or sold in its current condition.
- Rebuilt or reconstituted: A title for a salvage vehicle that was repaired. The vehicle may be in fine shape, or it may have been repaired on the cheap and may require additional repairs in the future.
The first two are positive descriptions, but you should probably avoid a car with either of the last two types of title. For example, 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.
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 value to fix it.
How to Get or Transfer a Car 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
- The date of purchase
- The odometer reading
The buyer will need to provide information on their lender, if applicable. Both the seller and the buyer will need to sign the document.
The seller should retain copies of the signed-over title and the bill of sale for their own legal protection.
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 detail above it, but 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 they 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
- Location (city/town and state) of the purchase
- A description of the vehicle
- The names and addresses of the buyer and seller
- Signatures of both the buyer and seller
Prior to signing anything, the buyer should verify that 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 title of a car is a legal document that provides proof of ownership.
- The information found on a title varies by state but always includes the vehicle identification number (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.