What Is a Car Title?

The certificate of title for a vehicle is a legal form establishing a person or business as the legal owner of a vehicle.
 
The title contains the vehicle owner’s name and address and other details about the vehicle. There are several classifications or “brands” of titles that each denote the specific condition of the vehicle it is being used for. 
 
Read on as we talk about car titles in further detail.
 
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Car Title Basics

The certificate of title for a vehicle (also known as a car title, automobile title, or pink slip) is a legal form, establishing a person or business as the legal owner of a vehicle.
Vehicle titles are commonly issued by a state’s Department of Motor Vehicles. When a vehicle is financed, the certificate of title is normally held by the lender, who must release it to the purchaser once the balance is paid off.
 
When a car is sold from one owner to another, the title must be transferred to the new owner. This is achieved by completing certain forms which are then submitted to the state Department of Motor Vehicles.
 

Car titles include information about the vehicle, including:

  • Owner’s name and address
  • Name of Lien Holder: If the vehicle is being financed or leased
  • The car's identifying information: vehicle identification Number (VIN), make, model, year the car was manufactured
  • License plate number
  • Odometer reading on the date of purchase
  • Technical information about the vehicle which is used for taxation purposes, including weight class (which will affect the cost of registering the vehicle).

What Does a Car Title Look Like?

The name "pink slip" is a reference to California certificates of ownership before 1988, when they were pink. Current California titles have broad vertical stripes of teal, yellow, and pink with a green border.
 

Difference Between Car Title and Registration

A car title establishes the ownership of the vehicle. A car registration is the document that’s needed to put the car on the road. Each state has requirements for registering a vehicle, which is typically managed by the Department of Motor Vehicles.
 

Types of Car Titles

There are several types of car titles, sometimes referred to as “brands.” Each type of title refers to the specific condition of the car, and thus, the title serves a specific purpose in the eyes of the state in which the title is issued.
 
Types of car titles are:
 
Manufacturer's Certificate of Origin: (also known as Manufacturer's Statement of Origin): It is a title generated by a vehicle manufacturer and issued to the dealership. Provides important information about the vehicle. If you are purchasing the vehicle new, you will need this document to register the car with a Department of Motor Vehicles.
 
Clear Title: The car doesn’t have a lien or financial burden placed on it by a lender. A clear title means it is owned entirely by the seller.
 
Clean Title: Often confused with a “Clear Title,” a car with a clean title is one that has not had significant or major damage (although it does not mean it has never been involved in an accident.)
 
Junk Title/Savage Title: When a vehicle has been in an accident and the total damage exceeds a certain percentage of the value of the car (ranging from 75 percent to 90 percent), the insurance company will decide that it is not economically feasible to repair it and will declare it a "total loss." What happens next varies by state, but in general, the motor vehicle agency will then issue a "salvage" or "junk" certificate to the car. A junk certificate means that the car cannot be driven, sold or registered in its current condition. Junk Title vehicles cannot become roadworthy.
 
Bonded Title: The rules and conditions of a bonded title vary from state to state. In most cases, they apply to situations where a title is lost or the car owner never received a certificate of title. In California, a Motor Vehicle Ownership Surety Bond form or a bond alternative must be submitted when certain such conditions exist.
 
Rebuilt or Reconstruction Title: According to Caranddriver.com, this title is required for cars that have gone through significant repairs or transformations. This title is issued by the insurance company or the place where the repair or transformation was done, such as a collision center, body shop, or licensed vehicle rebuilder. After being inspected and deemed safe for public roads, a reconstructed vehicle can be registered for normal use.
 
Affidavit Title: This title is given under an affidavit in situations where the car documents are missing.
 
Certificate of Destruction Title:
When an insurance company takes ownership of a vehicle, it has the choice to give it a certificate of destruction. If this is the case, the vehicle is supposed to never be driven on the road and is set to be destroyed.
 
Parts Only Title: A parts only designation is typically found on a bill of sale or transfer form, not on a title. However, if a parts only bill of sale is submitted for vehicle title processing, the title may be issued with a salvage brand or other cloud on title.
 
Electronic Title: This system uses electronic titles in place of paper titles to reduce handling, storage, and mailing costs.
 
Lienholder Title: A vehicle with a lien or title loan may have a title issued directly to the lienholder. The purchaser will be listed as the owner, but the title will list the lender as lien holder, and the lender will retain possession of the title.
 
Export Title: California DMV requires owners to sign and present a Certification of Exportation (REG 32) in person at a DMV office when the owner is exporting a vehicle to another country by ship or air. All registered owners whose names appear on the title.
 
Import Title: If you have imported your vehicle directly from another country (a direct import), you need to register the vehicle with California DMV.
 
Odometer Rollback Title: According to the United States Department of Justice, altering the mileage reading on a motor vehicle is a felony. Odometer tamperers frequently destroy original title documents indicating high-mileage, and obtain duplicate certificates of title from state motor vehicle departments, upon which the false, lower mileage figures are entered. An Odometer Rollback Title is one that indicates that the vehicle had its odometer turned back.
 

Title Precautions When Purchasing a Used Car

When a car purchased new or used from a car dealership, you will receive the car title if you pay cash and purchase the vehicle outright. If you finance the car, the dealership will hold the title until the car loan is paid off, and then the title will be released to you.
 
Purchasing a used car from a private individual requires vigilance, not only regarding the condition of the car, but the status of the title. There are several things to keep in mind when purchasing a used car this way:
 
  1. Ask to see the title to make sure that it is legal in the state they're buying the car
  2. If the vehicle isn’t owned outright by the seller (i.e., they are still paying off a loan on the car), you or the seller will need to contact the lienholder to assist with the title transfer.
  3. Run a VIN check: Using the car’s Vehicle Identification Number (VIN) you can run a free check to learn more about the vehicle’s history, including title history, ownership, odometer readings at time of prior sale(s), and liens on the title.
Private companies will charge a fee to do a detailed search, or you can use these government-sponsored resources:
  1. Get the car checked out by a mechanic. Even if the seller has the title to transfer to you, be sure to get the car checked by a reliable mechanic.
  2. Watch for title washing: This is when a car seller alters the title in any way. This practice is most often used when the seller wants to remove details relating to car damage.


Replacing a Car Title

Replacing a car title is necessary if for some reason the original title is lost, misplaced, stolen or badly damaged. The process will vary from state-to-state, but in all cases you’ll start at your local Department of Motor Vehicles. You can easily request a Duplicate Title by completing the necessary form and paying a fee.
 
Here’s what you’ll need:
 
  • Ensure you have completed an Application for Duplicate or Transfer of Title (REG 227) form.
  • Gather the following information / documents in order to use the DMV Virtual Field Office:
  • Your driver license or identification (Dl/ID) card.
  • The last 5 digits of your vehicle identification number (VIN) or hull identification number (HIN) for a vessel/boat.
  • The vehicle’s license plate number.


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