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What is a Car Title?
An automobile is like many other vehicles that are required to file documentation with local government officials for several purposes, including:
- safety requirements or inspections, and
- to verify ownership.
Along with a vehicle’s registration, which allows it to be used in public places, a title is usually required to document ownership, the history of a vehicle, and other statistics. These titles are generated by state departments of motor vehicles and are important particularly when a vehicle is purchased or sold.
Titles are official documents and cannot be altered in any way to misrepresent the true facts about the vehicle it pertains to, including its age or odometer reading.
A car title is a good way to learn about the history of a vehicle. Along with a VIN check, the title is an important clue to where a vehicle has been and what kind of condition it is in.
How to Read a Car Title?
The design of vehicle titles varies a little according to the state where the vehicle is titled, but in general, the front shows:
- the owner’s name and address;
- any lienholder’s identifying information (such as a bank loan for purchase);
- the vehicle’s manufacturer;
- the vehicle’s year of manufacture;
- the vehicle’s VIN (Vehicle Information Number) or unique identification code;
- information about any previous title (state and title number) if the current title isn’t the original;
- the odometer reading at time of purchase, and
- places for signatures of the seller and buyer if/when the vehicle is sold (sometimes on the back).
The back of the document is often where instructions are located regarding signatures of the seller and buyer when a vehicle changes hands. If the vehicle is moved to a new state and registered there, that state will generate a new title.
What Does the Title Look Like for a Car?
A title looks like an official document, oftentimes with a scroll-like edge and heavy watermarked paper. A title is actually comparable to a birth certificate because they are both official, legal documents that cannot be altered. The document generally says “Certificate of Title” across the top.
What are the Types of Car Titles?
Vehicle titles are designated according to the condition of the automobile. For instance:
- a clear title is unencumbered by loans or shared ownership and is eligible for financing and immediate sale without the need for a release of lien;
- a bonded title is one in which the seller must put up funds equivalent to the vehicle’s value (a bond) that is good for several years because there are ownership documents missing. Similarly an affidavit title includes a sworn statement when some aspects of the ownership documentation is missing;
- reconstructed title is the type created for vehicles that have been significantly restructured or altered from its original condition and need to be inspected and approved by department of motor vehicles officials before a title is issued, and
- salvage titles are given to those vehicles that have been totaled in accidents or floods, which can prevent them from being registered in some states.
Titles vs. Registrations
A title shows the ownership of a vehicle and whether there’s a lien (loan) on the car. A registration is a document that demonstrates that the owner has the state-required insurance on the vehicle. A vehicle may be registered to a different person than the one who holds the title. A title lasts until the vehicle moves out of state or the ownership transitions have exhausted the space on the document. A registration document is only good for a year or the period that the state decides a registration is valid for.
How to Get a Title to a Car?
A title is the official document that shows who owns a vehicle. If a person has a bank loan to buy a vehicle, the bank is the owner of the vehicle and will hold the title until the loan is paid off. Once payments are completed the individual will receive the title.
If a person pays in full for a used car owned by another individual, the title document must be signed by both and should be in the possession of the new owner.
If a vehicle is sold without all of the proper documentation the buyer should complete a request for a duplicate title at the Department of Motor Vehicles where they reside.
How to Transfer Title to Another State?
When a vehicle is purchased from another state, the buyer must register it where they live. The registration process will generate a new title for the state of residence. The former title information will be referenced on the title itself so there is a documented chain of ownership.
Doing a VIN check using the vehicle’s VIN number (found stamped in a corner of the windshield and in a door frame) will also provide useful information about the vehicle’s past ownership and maintenance, including whether it has a salvage title due to flooding or a wreck.
Buying, Selling or Trading the Vehicle: What will Happen with a Car Title?
When a vehicle changes ownership, the title is the important piece of documentation that follows the vehicle. The seller signs off on the title, and the buyer must take the title and other documents (such as a bill of sale) to the state department of motor vehicles to show ownership and get license plates.
If a loan is taken to purchase the vehicle, the bank that loans the money holds the title to the vehicle until it is paid off.
When trading a vehicle, the title is signed as if in a sale.
How to Get a Title for a Car with a Bill of Sale?
Titles are created by the authority of state motor vehicle departments. Sometimes vehicle titles are lost or vehicles that are home-made do not automatically have title documentation. In these cases, the owner must make an application for title to the state department of motor vehicles. A bill of sale is one of the documents required for the application. Some states require notarized statements from the seller, others require both buyer and seller to complete an application together. Check your state’s rules regarding titles before finalizing a purchase or sale transaction.