In almost every state, you can’t sell a car to anyone without the title. The title proves that you’re the legal owner, and without that document, you can’t legally transfer ownership of the vehicle to someone else. However, if you’ve simply lost the title, you can get it replaced.
Why Do I Need a Title to Sell a Car?
In most situations, you need a title to sell a car to a private seller, or trade it in at a dealership. A vehicle’s title serves as proof that you own the car
Your vehicle has other important information besides who the legal owner is. There are many different types of titles, but they all serve the same purpose. For example, depending on your state, some titles are color coded to let a buyer know if the car has ever been deemed a total loss or if it’s ever been rebuilt.
Titles also have your vehicle’s identification number, or VIN. It’s a unique number that only your car has. The exact information on a vehicle’s title varies by state, but other important information typically includes:
- Mileage on the car when it was purchased
- The lienholder’s information
- Make and model
- Date of manufacture
Most importantly, the title has the legal owner’s name on it. However, you may not have the title if you’re still paying on it, even though you have legal ownership.
Are You in a Title Holding State?
Most states are what’s called a title holding state, meaning that if you’re financing a vehicle, the lienholder has possession of the car’s title until you’ve paid it off.
Only nine states are non-title holding states. If you finance a vehicle in one of these states, you’re sent the title in the mail once all the paperwork is complete, and the car is delivered. These non-title holding states are: Arizona, Kentucky, Maryland, Michigan, Minnesota, New York, Oklahoma, South Dakota, and Wisconsin.
If you’re not in a title-holding state and you still have an auto loan, your lender has the title. Once you’ve completed the loan, your lender removes the lien and sends you the title, allowing you to sell the vehicle.
If you need to sell or trade in your car while you still have a loan, you need to contact your lender and request a payoff. This typically includes your loan balance plus 10 days of interest charges. Whoever is purchasing your vehicle writes a check for that amount, and sends it to the lender. The lender can then remove the lien. Once you have the title in hand, you can transfer ownership to the new owner.
Drivers Lane Tip: Remember, you can’t sell a car without the title, and you can’t sell a vehicle with a lien on the title, either.
Replacing a Lost Title
If you’ve already paid off your auto loan and you simply can’t find your car’s title, you can replace it.
It generally doesn’t cost that much to replace a title, but you can expect to pay anywhere from $15 to $25 dollars at your local DMV or Secretary of State. The name of the form varies by state, but they’re usually called a replacement title application, or application for duplicate title form. These forms can also be filled out and submitted online.
Some states also require that a notary be present when you sign the replacement title, which could mean paying another fee.
Be prepared with your proof of identity, who the lienholder is (if you still owe), and information about your vehicle such as the VIN, make, and model. You may also need to explain why you’re requesting a replacement title. It may take some time to get the duplicate title, depending on your state.
The Bottom Line
You can’t sell a car without a title – you need it to transfer ownership to someone else. However, things happen, and thankfully you can request a duplicate if you’ve misplaced it or it was damaged.
If you’re looking to trade in your vehicle for another and you’re struggling to find a dealership that can work with your bad credit, look to us. At Drivers Lane, we’ve teamed up dealers that have special finance departments that work with bad credit lenders. To get matched to a dealership in your area with bad credit lending options, simply fill out our free car loan request form.