What Is a Car Title And How Can It Be Transferred?

Not fully understanding what a car title is, why it is important, and how to transfer it can cause a lot of headaches during the car-buying process. This is especially true if you’re buying or selling a car privately. So what is a car title and how does the car title transfer process work? We have the important information to help streamline the process for you.

What Is a Car Title?

In short, a vehicle title is a legal document that proves valid ownership. Without a title, a car cannot be registered with the Department of Motor Vehicles (DMV). And if a car cannot be registered, it won’t be issued license plates, which means that it cannot be legally driven. 

This is why the title is the most important piece of documentation you have for your car. If you plan on selling your car on the private market, ensure that you have the title in your records. If you find that you’ve lost the title, follow the steps outlined by your local DMV to be issued a replacement before putting the car on the market. It will make the selling process go much quicker and easier.

Should I Buy a Car Without a Title?

In most instances, the answer is no. Though the exact process of car registration varies from state to state, it’s common across all states that having the title on hand when going to register your newly purchased car is a lot easier, faster, and more straightforward, not to mention cheaper, than if you didn’t have the title. 

If you do buy a car without a title, expect to complete and submit additional documents, possibly get additional inspections for things like smog and safety, and spend a lot of time waiting for all this paperwork to be processed by the DMV. It’s a long, slow, painful process - and it all can be avoided if you buy a car from someone who didn’t lose the title. 

It’s worth noting that the process varies by state. Connecticut, for instance, does not require a title for registering any car over 20 years old. On the other hand, if you buy any car without a title in California you’ll first need the previous owner to fill out a request for title and have it notarized. The new owner will then pay the appropriate DMV fees and also get a safety and smog check. Only after completing this process can you get a new title from the state. 

To avoid having to negotiate the state-specific DMV rules, forms, and regulations relating to no-title sales, make sure any car you intend to purchase has a “clean"title. This means the title show’s the current owner’s name and it has no loans/liens against it. If they don’t, you should probably walk away, as the difficulties that could arise when you attempt to register it might prove incredibly frustrating and time-consuming - not to mention pricey. 

A vehicle title with a lien against it means there’s currently a loan using the vehicle for collateral. This means the seller has to pay off the loan before the lien comes off and the title is “clear”. The process isn’t too complicated, and can be done as part of the purchase with the seller’s and lending institution’s cooperation. See below for additional details regarding how a seller transfers a car title when there is a lien on it.

When a vehicle owner doesn’t have a car title, it can raise many red flags. It could be because the vehicle was stolen or has a salvage title. Alternatively, it could be because it was simply lost. To confirm that it is an honest sale, you can run a free VIN check. The iSeeCars VIN check provides title/lien info that comes from the state’s DMV, and also links to a CARFAX or Autocheck vehicle history report that will show if the vehicle has a salvage title. It will also tell you if the vehicle has been reported stolen on the National Insurance Crime Bureau (NICB) database. 

How Does the Title Transfer Process Work?

The process of transferring a title begins when the car is purchased. At that time the seller will  complete and sign the appropriate sections on the car title itself. The buyer will also sign the title. There’s also a place to write in the mileage shown during the odometer reading at the time of sale. The new owner information is usually found on the back of the title.

This is also when a bill of sale should be written out. A bill of sale is like a receipt; it is a legal document stating that you purchased a certain product or service from another. It usually doesn’t have to be anything formal - in this case, just a couple of sentences disclosing the buyer’s name and contact information, the year, make, model, and VIN (vehicle identification number) of the car sold, and the date of sale and purchase price. This isn’t required by every state, so check first with your local DMV before preparing one. If you need it, bill of sale templates are available for free online. 

In some states, like Maryland, the bill of sale must be notarized under the following conditions:

• The vehicle is less than 7 model years old; and

• The price is at least $500 below book value; and 

• The new owner wishes to pay the excise tax based on the sale price

With a signed title and completed bill of sale (if needed), you have the necessary proof of ownership required to begin the title transfer process. Bring both to the DMV along with the completed title application for a new certificate of title, pay the necessary title transfer fees, and within a few weeks you’ll receive a new title in the mail that officially proclaims you as the new, rightful owner.

Is It Really That Easy?

Well, that’s the general process. As noted earlier, each state is different with their exact criteria required for issuing a title. Before you go to your local DMV, check their website to ensure you bring everything you need to transfer the title into your name.