What Is a Car Title?

One of the most important documents related to vehicle ownership is the car title. It is the legal document proving ownership. It also details key information about the vehicle, such as its make and model, year manufactured and vehicle identification number (VIN).

If you are financing a car through an auto loan, your lender will be holding the car title until you pay off the loan. The lender will be listed as the lienholder. A car title is issued by the state where the vehicle was purchased but is reissued if there is a transfer of ownership or change in the state of residence.

A car title is also known as a certificate of title for a vehicle. It is a document issued by a state agency, usually the Department of Motor Vehicles (DMV) or Department of Transportation (DOT). It contains important information about the vehicle and its owner.

Some people confuse this document with car registration. However, vehicle registration is simply a document proving that the car can legally be driven. Meanwhile, a car title is proof of ownership. There are certain situations when a car title is necessary, such when selling a vehicle. You can also use it as collateral when getting a loan.

Your car title not only proves your ownership of the vehicle but also has important information about your car. All states issue car titles. However, what they look like and what information is included may vary depending on the state. That said, there are certain details that are typically listed.

There are various types of car titles based on the vehicle’s history including accidents, liens and rebuilds. Generally, all vehicles start with a clean title. That means it has no record of having any kind of significant damage. If the vehicle is involved in an accident or major event with damages, its car title will change. While the name of the types of vehicle titles may vary per state, there are certain classifications typically recognized in most states.

If you are selling your vehicle to a dealership or are trading it in to get another car, you may not need to do anything. In most cases, the dealership takes care of the title and any issues related to it.

If you are selling to a private individual and your car has a clean or clear title, you will need to fill in the transfer information in the car title. Both parties should sign the assignment section and keep a copy. The same process applies if you are buying a car. Depending on the state requirements, you may also need to have the document notarized.

If you have not fully paid off your car loan, you may need to fulfill your obligations to your lender before they will release the lien. In some cases, the buyer pays for the remaining amount so that the lender will issue a clear title.

Losing your car title can be stressful and you may worry about replacing it. Fortunately, there are several ways you can request a duplicate copy from various state agencies detailed below.

Transferring a car title is often necessary when there is a change in ownership, such as when you sell your car, gift it or move to a new state. Each state may have certain rules and requirements you need to follow. You can visit the state DMV’s website to see what documents you may need to submit.

Transferring a Car Title to a New State

When you move to a new state, you will need to transfer your car title and the requirements for this vary. For example, you may need to go through a safety inspection or emissions test.

Remember to bring your current car title, driver’s license, odometer reading and proof of residence with you to the DMV when you are ready to transfer it. In general, you will have about 30 days to complete the transfer, in addition to registering the vehicle in your new state.

Transferring a Car Title to a Family Member

If you’d like to transfer your car title to a family member, the process is the same as if you were selling your vehicle. You and the recipient will need to fill out and sign the assignment section on the car title document. Some states may also require a bill of sale, even if the vehicle is a gift. In this instance, the family member receiving the car will apply for a new title.

Transferring a Car Title Upon the Owner’s Death

The process of transferring a car title differs with a deceased owner. Each state may have different regulations for vehicles inherited from a deceased person. In most cases, you would need to submit a copy of the death certificate and the existing title. A notarized affidavit of inheritance may also be needed.

If the vehicle was inherited through a will, the executor has to sign the vehicle title before you submit it to the DMV.

Whether you are buying or selling your car, it is important to be cautious of who you are interacting with. There are individuals who target buyers, sellers and car owners through various scams. Knowing how to avoid these attempts and keep your car title safe can help protect you and your assets.

While there are some documents you should always keep with you, such as a copy of your vehicle registration and proof of insurance, there are others you need to keep in a safe place. Your car title is one of those.

This should be a space where no other person can access it, such as a home safe, a safe deposit box or another secure place at home.

MoneyGeek answers some frequently asked questions (FAQs) to help you better understand what a car title is and it’s value.

The car title is only one aspect of car ownership. Learn more about relevant vehicle topics such as car insurance, loans, leasing and refinancing in the guides below.

• How Does Car Insurance Work?: Car insurance is required by law. It also provides protection against financial burden in the event of a covered incident.
• Cheapest Full Coverage Car Insurance: Lenders typically require comprehensive and collision coverage when financing a car through a loan. Find the cheapest full coverage car insurance based on your circumstances and needs.
• Bad Credit Car Loans: People with bad credit scores may find it difficult to get a car loan. In this guide, you can learn how and where to get auto loans even if you have bad credit.
• Auto Loan Calculator: Find out how much your monthly payment will be if you get an auto loan. You can also use the auto loan calculator to compare different lenders.
• How to Refinance an Auto Loan: Depending on your financial situation, you may need to refinance your auto loan. Find out your refinancing options and get tips on how to refinance your auto loan.