When you buy a car outright—without using a bank or dealer financing—the seller gives you a certificate of title. The title serves as proof of ownership and includes identifying information about the vehicle, such as its make, model and vehicle identification number (VIN).
A title is essential for registering or selling a vehicle. An understanding of the different title types is important when car shopping.
- A certificate of title is a legal document that establishes ownership of a vehicle.
- It’s used to transfer possession from one owner to another.
- The title is required to register or sell your vehicle.
- A branded or salvage title indicates that the vehicle went through extensive damage and has been rebuilt.
- Many states allow use of electronic titles rather than paper copies.
What Is a Car Title?
A car title shows who owns the vehicle. Without it, you can’t prove you legally own the car. It’s issued by the state department of motor vehicles (DMV) or department of transportation at the time the vehicle is sold. If you took out a loan, the lender holds the title until the loan is paid off.
Titles generally include the following information, with some state-by-state variety:
- Owner’s name
- Vehicle identification number (VIN)
- Odometer reading at the time of sale
- Weight class
- Lienholder information if sale is financed
- Title assignment section with buyer and seller’s names, addresses, date of sale and signatures
Types of Car Titles
When shopping for a car, you may read that a car has a clean or clear title. That means the vehicle has no record of damage, major repair, or being recalled. It doesn’t mean the car was never in an accident; it means it wasn’t a total loss, and there’s a clear record of previous owners.
If the car was involved in an accident and was declared a total loss, or if it experienced flood damage or has an inaccurate odometer, it may have a branded title. Branded title cars can be a lot cheaper than those with clean titles, but you risk buying something with problems.
Title vs. Registration
In addition to getting a title, you need to register your car. While a title shows you’re the owner, a registration certificate shows that your car is legally permitted on public roads. Driving without a current registration is illegal, and you may be fined if caught.
How to Get a Title
When you buy a new vehicle or transfer a car into another state, apply for a certificate of title in your name. This requires a visit to your local DMV office with the following documents:
- Proof of identity, such as a driver’s license or passport.
- Proof of ownership, such as a bill of sale.
- Proof of insurance coverage that meets state-minimum requirements.
- Application for title.
- Applicable sales, tag, title and registration fees.
Title fees vary by state, but range from $5 to $150. For example:
- Illinois: Individuals have to pay a $150 vehicle title fee
- North Dakota: In North Dakota, the title fee is just $5.
- Pennsylvania: In Pennsylvania, the cost to get an original title issued is $55.
Storing Your Title
Guard your title carefully. Many states use paper titles, so store it where it’ll be safe from damage. Don’t keep it in the car with your proof of insurance and registration. File it with important documents like birth certificates, Social Security cards and passports.
While paper titles are common, some states use electronic documents. If your state permits electronic titles, you don’t have to worry about keeping the title safe because they store it for you. To find out if your state offers electronic titles, visit your state DMV or DealerTrack.
If you lose your title, don’t panic. A duplicate title may be available from your DMV for a fee. In some cases, you can even request one online or through the mail.