So you’ve decided to part with your car. You have a buyer all lined up and you’ve agreed on a price. The problem is that they’re asking for a title, and now you’re stuck. Well, fortunately, you can sell your car to a new owner without a title, with a little work.
What is a Car Title?
Like most valuable physical property, a vehicle title shows proof of ownership for a vehicle. Generally, it lists things like the owner; vehicle identification number (VIN); year, make and model of the vehicle, and possibly the odometer reading at a specific point. If there’s a lien against the vehicle, the title will also list the lender that’s financing it. While a few states do not issue titles for vehicles, most do. Selling a car with the title shows that you’re the car’s rightful owner, and that there are no outstanding liens against it. The new owner will also need the title to register the car in their name (if you're wondering what to do if the new owner fails to fulfil their part of the process, read out separate guide on what to do if a buyer never registers a car you sold).
The Most Common Types of Titles and Their Significance
A car’s title type is one way to classify it or glean important information about it. When a new car leaves the factory, the manufacturer will issue a certificate of origin, which goes to the dealership. A title for the car is generated once the original dealership sells it. At that point, the car has a “clear” or “clean” title. A clear title merely states that a car has no record of a serious accident.
Should a vehicle become damaged enough, through accident, flood, hail or other means, for an insurance company to “total” it, it often gets a “salvage” title. Many states have specific types of titles based on the type of loss, such as “theft recovery,” “flood,” or “hail.” If the car can be reasonably repaired or put back on the road again, you might see it with a “rebuilt” or “reconstructed” title, and some jurisdictions require a mechanical inspection for this designation. On the other hand, if a car can’t be repaired or is suitable only for parts, it may have a “parts-only” or “junk” title.
One other type of title is a “lemon” or “buyback” title. This varies by state, but it is issued to cars that were bought back by the manufacturer due to defects under warranty. Sometimes these defects are fixed, and other times they aren’t. If you want more information about a car’s history and what led to a buyback, you’ll often need to consult a history record, or your state’s Department of Motor Vehicles (DMV).
Selling a Car When the Title is Missing
Occasionally, life happens and the car title you’re sure you remember putting in that kitchen drawer suddenly isn’t there. The easiest thing to do is to get a duplicate or new title, and fortunately every state has a process for this. In Georgia, for instance, you can get a duplicate title by visiting your County Tag Office, filling out Form MV-1, providing a driver's license as proof of identity, and paying a duplicate title fee. It’s important to note that a duplicate title invalidates any previously issued titles, so if you ever do dig up that old title—or if someone else finds it—it won’t be of any use.
Alternatively, if you bought or were gifted a car from a previous owner without the title but should have had one, you can get what’s called a “bonded” title. This is just like a regular title, only it’s marked to indicate that there is a surety bond attached to it. Again, you’ll want to speak to your state’s DMV for the exact process, but it typically involves buying a surety bond, or lost title bond, which protects the state and any previous title owners who may have a legitimate claim of ownership to the vehicle. The surety bond, combined with proof of ownership like a bill of sale, allows the DMV to issue you a bonded title. If someone comes along later and says that they are the rightful owner of the vehicle, they can make a claim against your surety bond. If the claim is validated, the surety company compensates that person, and you are then obligated to pay the bond company.
Finally, if you’re attempting to sell an abandoned vehicle—such as one that was left on your property—you’ll first have to claim ownership. This varies by state, but generally involves waiting a set amount of time and demonstrating that you made a good-faith effort to find the owner. At that point, some states let you file for the title and sell it just like you would any ordinary car, while others require that the car is sold at a public auction or destroyed if it's a junk car. There are even a few states, like Nebraska, that require abandoned vehicles to be turned over to local law enforcement, so you wouldn’t be able to sell one as an individual.
Selling a Car When You Never Had a Title
The reasons you might not have a car title can vary, depending on your state and circumstance. In some states, when you take out a loan for a car, the lender or lienholder holds the title until it is paid in full. If that’s the case, you’ll need to cooperate with the lender.
You first need to find out the payoff amount, and then pay it to release the title. For a private-party sale, where you’re selling the car to an individual, you can make this easy by meeting at the lender’s local office. Once the buyer hands you cash, you immediately use it to pay off the loan. At that point, the lender can release the title to you, and then you can sign it over to the new buyer.
If you’re using the car at a dealership as a trade-in, it’s even easier because dealerships are familiar with the nuances of car sales and do this on a daily basis. After the dealership confirms the amount owed on the vehicle, you’ll be asked to sign a power of attorney, stating that the dealership can act on your behalf in regard to paying off the vehicle and getting the title transferred without you physically present.
In other states, you might not have a title because one was never issued or created. States like New York, Vermont, and Connecticut do not require titles for vehicles that reach a certain age. In those states, a bill of sale typically works. Ensure that the bill of sale clearly lists the year, make, model, color and VIN of the vehicle, as well as the price you sold it for. Also, consult your local DMV for any additional forms you’ll need to fill out. The onus is then on the buyer to figure out how to register the car in their state, if they live somewhere else.
Trying to sell a car without a title usually isn’t the end of the world, but exact procedures and paperwork can vary by state and jurisdiction. Your local DMV is your best friend, once you’ve identified your specific problem. Visit your DMV website for specific instructions and guidance.