In the simplest of terms, a car title (often called a certificate of title) is a receipt for a vehicle purchase, showing proof of ownership. It’s a legal document that shows what was bought and who did the selling and buying. Read on to learn everything you need to know about a car title.
What Is a Car Title?
- Understanding Vehicle Titles
- What Information is Included on a Car Title?
- Different Types of Vehicle Titles
- Where to Find the Car Title
- Common Information on a Vehicle Title
- FAQs
Understanding Vehicle Titles
The main function of a car title is to establish who is the legal owner of a specific vehicle. Without a title, a vehicle typically can’t be registered for road use or sold to another party. (There are some exceptions, but more on that later.) Needless to say, a car title is a very important document that proves ownership of a vehicle.
Car titles are issued at a state level so there can be variances in the look and format of the actual document based on where you live. The state of California, for instance, issues certificates of ownership for vehicles on pink paper, which many refer to as pink slips. But regardless of what the car title looks like, it should contain the same information as any other.
What Information is Included on a Car Title?
A typical car title includes the vehicle year, make, and model as well as the vehicle identification number (VIN), the registered owner’s name and address, the seller’s name and address, the title number and date of issuance, license plate number, any lienholder information, and, if applicable, the title status (aka a brand). Most are organized by labeled sections, making it easy to scan for the information you're after. For example, if you’re looking for a vehicle’s model year, that’ll be under the “year” section of a car title.
There’s also a section for an odometer reading, which lists the number of miles the car has traveled at the time of the sale. However, sometimes instead of a number, you’ll find the words “not actual mileage” or “exceeds mileage limits” in this section. The former phrase is a disclosure meaning the mileage reading is inaccurate, perhaps due to the odometer being broken or replaced, while the latter relates to a mileage number that has exceeded the odometer’s limits (e.g., an analog odometer with only five place values would hit 99,999 miles then roll over to 0).
Space is limited, so some state departments use abbreviations for certain things. Most of these shortenings are fairly easy to interpret; if you see “Chevr” listed under the vehicle make, it doesn’t take much knowledge or brain power to ferret out that the title is for a Chevrolet. Other shortenings are more ambiguous, such as “SW” referring to a station wagon body style, but a quick internet search should turn up what your title’s shorthand means.
Different Types of Vehicle Titles
Generally speaking, there are two different types of car titles: Clean or branded.
If the title doesn’t have a brand, it’s considered clean (though the word “clean” won’t actually appear on the title itself). This means that the car has a clean history with no reports of significant damage, defects, or mileage inconsistencies that could impact its resale value. The other type of car title is branded. A car title can be branded for a number of reasons, but that status is an indication of significant damage or another serious issue in a car’s past. Things that can lead to a branded title include crash or water damage, being part of a lemon law buyback, or showing evidence of an odometer rollback. If a title is branded, the reason for that status will be listed on the title.
Two common types of title brands are salvage and rebuilt. A car with a salvage title has experienced a catastrophic incident that resulted in it being declared a total loss by an insurance company, which happens when the cost to repair the damage exceeds the value of the vehicle. Salvage titles are typically issued to vehicles with crash, fire, flood, or theft histories. Cars with salvage titles cannot be legally driven on public roads, even if they are still functioning. Some will carry a junk title or brand, which is a subset of salvage titles that means the car is junkyard bound and suitable only as a parts donor.
But sometimes, people will actually salvage a salvage vehicle, bringing it up to roadworthy standards. If such a vehicle passed an inspection by the state, it will be issued a rebuilt title. This means it’s perfectly legal to drive, but if you’re considering buying such a car, there are some implications to consider.
Not all insurance providers offer policies for cars with rebuilt titles. And those that do will often limit the type of coverage available and charge a high premium.
A car with a rebuilt title will also have a lower resale value than a comparable car with a clean title. Of course the upside of that is that you can get one for cheap.
Then there are lien titles. If you come across this term in your car shopping, it means that the vehicle is financed and that the lienholder will have to be paid in full before the title can be released. If there is a lien on the vehicle, it will be clearly stated on the title.
One other title to mention is the bonded title, which is a car title given to the current owner in a case when the previous ownership cannot be established - such as when the owner of a vehicle passes away and the paperwork cannot be found. In addition to filling out some additional paperwork at the DMV, you’ll need to have your car inspected and appraised before purchasing your bonded title.
One other thing worth noting: Before buying any used car, it’s important to check its vehicle history beyond the car title, as there are ways for unscrupulous sellers to remove a brand from a car title and pass it off as clean. This is called title washing, and it’s illegal.
Where to Find the Car Title
If your car is financed or leased, you won’t have physical possession of your title. In those cases your original title is actually in the hands of the entity handling the financing of the vehicle. Once the loan is paid back or the vehicle is purchased off-lease, the title will be released to you. If the vehicle is purchased outright from a dealership, they will handle the paperwork and you’ll receive a title in the mail along with other ownership documents, such as the car’s registration.
You also might not receive a physical title depending on the state you live in. Arizona, for example, issues electronic titles, which are stored digitally and printed only when requested by the owner. And some states, such as Georgia, don’t issue titles for vehicles of a certain age; instead, the seller provides the buyer with a bill of sale, which should include all the same information as a title and may be a requirement for registering the vehicle (i.e., getting a license plate for it).
If you do have your car’s title in-hand, it’s recommended to store it in a safe and secure location, such as a home safe or a bank lock box. Should you lose your car’s title, there are ways to replace it.
In most states, you can request a new title through the Department of Motor Vehicles (aka the DMV) or an equivalent agency. You’ll need to provide some form of ID, like a driver’s license, along with some information about the vehicle, including its VIN and proof of ownership, usually the vehicle registration or a valid insurance card. You’ll also have to pay a fee. All of this varies by state, so be sure to check your local rules and regulations to determine what’s required to receive a duplicate title.
If you sell your car or transfer ownership of the vehicle, you’ll need to transfer the title to the new owner. This is done by filling out the back of the title with the proper information, which typically includes your name, the date of the sale, the selling price, and the current odometer reading. You will also have to sign the title to make the sale valid. The state won’t process the transfer without this signature. The buyer can then take the vehicle title to their state agency and have it transferred into their name as the new legal owner.
Common Information on a Vehicle Title
As mentioned above, the look and format of a title can vary from state to state, but there is commonality in terms of required information. All car titles list the owner’s name and address, as well as the VIN, which is a unique 17-digit alphanumeric code tied to the specific vehicle. There’s also a section for the odometer reading at the time of the sale.
FAQs
How Do I Obtain a Duplicate Title?
A duplicate title can be requested online or in person at your DMV or equivalent agency. Check with your state laws to see what specific documents are required to obtain a duplicate vehicle title, but you’ll typically need a form of identification, such as a driver’s license, and proof of vehicle ownership.
What Are the Requirements to Transfer a Title?
In order to transfer a title, any lien on the car must be paid off and the appropriate sections on the title must be filled out by the vehicle owner/seller. Once that’s done, the title can be transferred to the new owner.
What Is a Title Lien?
A title lien simply means that a lender or financial institution has a legal claim to the vehicle (in other words, the vehicle is financed and hasn’t been paid off). In order to satisfy the lien, the balance of what’s owed on the vehicle must be paid in full. Once that is done, it’s a free and clear title. The lienholder will either send you the title directly or tell your local DMV (or equivalent agency) that the title is now yours.
