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.
Why Is a Car Title Important?
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.
Information Included in a Car Title
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.
The name and address of the vehicle owner is included in
Vehicle Identification Number (VIN)
The VIN is a unique 17-digit combination of letters and numbers
Your car title will show the date of purchase odometer reading
Vehicles are classified based on their weight. This information
If you have a car loan through a bank, credit union or financing
Depending on your lender, you may also be required to purchase
This is information about the seller and buyer. Once finalized,
It will include the following:
Types of Car Titles
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.
This means the car has not been in a major accident, hasn’t had major damages or wasn’t declared a total loss.
There is no financial lien against the vehicle. The vehicle is not tied to a creditor or third party and the titleholder is the sole owner.
This vehicle has been in a major accident, which led to damages costing 75% to 90% of its value. The car was declared a total loss and needed significant repairs.
Rebuilt or Reconstructed
Cars with rebuilt or reconstructed titles were previously classified as salvaged. After having the necessary repairs, they will fall under the rebuilt or reconstructed classification.
A Lemon Law buyback vehicle title is given to cars that have warranty-covered defects found within a certain period or mileage. It means the car was returned to or bought back by the manufacturer because of the covered defects.
What Will Happen to Your Car Title When You Buy, Sell or Trade a Car?
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.
What Do You Need to Do When Your Car Title Is Lost?
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.
Getting a Copy of Your Car Title
Visit your state DMV or Secretary of State to find out the specific steps you need to take to get a copy of your car title, as each state may have different requirements and processes. That said, you can get started with the following steps.
Contact your lienholder
If you have not paid off your car loan, contact your lender first. Typically, the lender will be the lienholder of the title until the car loan has been paid in full.
Check your state DMV
You can review your state DMV website to learn what documentation and information you need to submit for a copy of your vehicle’s title. In most cases, you will need your driver’s license and may be asked to provide owner and vehicle information.
File the form
Depending on your state requirements, you may be able to submit your request online. If not, you can submit them in-person or via the mail. The paperwork may need to also be notarized and the filing likely will have a fee, ranging from $2 to $95.
Request for a copy of your car title from your state DMV. The process is easy — fill out a form with the vehicle and owner details, including your driver’s license and reason you’re requesting a copy, and submit it with the processing fee via mail, in-person or online. You can use Factory Warranty List's Lost Car Title directory as a resource.
How to Transfer a Car Title
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.
Avoiding Scammers and Storing Your Car Titles
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.
There are various scams related to car titles. You need to know what to look for and what you should do to protect yourself.
1. Buy from a reputable car dealer. While private individual sales are common, it’s more challenging to verify who they are, if the vehicle they’re selling is legitimate and in its stated condition. Therefore, it can be safer to buy a vehicle from a reputable dealer.
A dealership can be more reliable for purchase, but you should also be wary of how the salesperson behaves when showing you vehicles. For example, if they are rushing you to make a decision, charging a much higher cost than you know the vehicle is worth or pressuring you to sign the documents quickly, consider it a red flag.
2. Check the vehicle. You should inspect the vehicle fully before purchasing it. Check all parts, including the seats, floor mats, dashboards, seat belt retractors and tires. It’s advisable to have a certified mechanic complete an inspection. You should also watch out for odometer tampering. This is fraud that includes an odometer being rolled back to make it appear that the car has fewer miles than its actual mileage.
3. Check the title. If possible, ask the seller to show you the title. Check for any signs of tampering, such as peeling edges and missing the state’s watermark. You may also conduct a title check using the car’s VIN. Visit the state DMV’s website to see if they offer an online title check service. It’s a good idea to review the Vehicle History Report as well to see if the information detailed on the car title is consistent with the report.
How to Keep Your Car Titles Safe
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.
Car Title FAQs
MoneyGeek answers some frequently asked questions (FAQs) to help you better understand what a car title is and it’s value.
It’s valuable to understand the importance of your car title, the various types of titles and tips to avoid scams. MoneyGeek asked several industry leaders to provide their insights on car title and ownership.
- What is the best way for individuals to understand the importance of a car title?
- Do you have any tips to help consumers protect themselves against car title scams?
- What happens to the car title after I finish paying off my car loan?
Operations Manager at Craig and Landreth Cars
Vice President of Marketing Communications & Loan and Finance Expert at Highway Title Loans
CEO and Founder of Best Online Traffic School
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.
About Mark Fitzpatrick
- Delaware Division of Motor Vehicles. "Odometer Disclosure Requirements." Accessed January 21, 2022.