The Different Types of Car Titles
A car title, also known as a pink slip, is the legal document verifying the car's legal owner. Car titles are issued by the state and prove ownership of the car.
Whether a new or used car, car titles are important and tell a story about the vehicle. For new cars, the legal ownership of the car is transferred from the manufacturer or dealership to the buyer. For used cars, the seller transfers the car title or ownership to the latest buyer.
While car titles establish the vehicle's ownership, they also tell more about the damage history. Car titles often contain important information like;
- The car's identification information like make, model, year, VIN, etc.
- The license plate attached to the car
- The owner's identification information, including name and address
- The car's technical specifications, including engine number, weight, etc.
A car's title will be modified throughout its lifetime to reflect the conditions it has passed through. Find out the different types of car titles below.
Types of Car Titles
Certificate of Origin
A car's certificate or origin is its first-ever title issued by its manufacturer to a dealership purchasing it. This title transfers ownership of the new vehicle from the manufacturer to the dealership. This document will also form the basis of the vehicle's transfer to its first owner or buyer.
The certificate of origin will be used to process the car's first official title from the state after its purchase from the dealership.
Manufacturer's Statement of Origin
The manufacturer's statement of origin is similar to the certificate of origin. The manufacturer issues this document for importation purposes or other domestic purposes.
A clear title is an ownership certificate issued by the state to show that the vehicle and its owner have no outstanding debt or financial burden on the car. A clear title is the most desirable car title, especially if you're buying a used or preowned car.
In most cases, a clear title qualifies you for a car loan because there aren't any outstanding payments or debts on it.
Salvage titles are issued to cars with at least one of three major losses; theft, repair, and/or major damages. A stolen car or one involved in an extensive accident requiring repairs of up to 60% of its value can be issued a salvage title.
Insurance companies are in charge of classifying vehicles as salvage. They may classify vehicles with less than 60% repair or damage issues as salvage. This type of title is permanent and will be transferred from one owner to another until the vehicle reaches its end of useful life.
Please note that a car with a salvage title can be repaired and made roadworthy. However, the car may never get a clear title again.
If you encounter a salvage title, know that the car has either been badly damaged or stolen. When buying a salvage car, it is important to check all the important parts of the vehicle, including its airbags, transmission, etc.
A junk title is issued after a car has been sold to a junkyard. Junk titles are also issued to vehicles that have sustained damages equaling or greater than 75% of their value. The junk title designation is part of the process of scraping or pulling apart the vehicle for scraps.
Some states consider a junk title and salvage title to be the same. It is important to verify your state's laws regarding such titles and how it affects you.
Please note that a junk title, salvage title, certificate of destruction, or rebuilt title are often permanent. Any attempt to conceal, obscure, alter, or rebrand such titles is considered a criminal offense. Such perpetrators may be arrested and jailed for their actions as a violation.
Bonded titles can be purchased when the car has no clear ownership documents. This means that the seller issues a security bond equaling the car's value to the buyer to protect them from future claims. The bonded title assures the buyer that they won't lose out if the car were to be claimed by another person in the future.
Note: A bonded title is usually valid for three to five years.
Rebuilt or Reconstructed Title
A reconstructed title may be issued to vehicles that have been significantly rebuilt. An insurance company, collision center, auto body shop, or a licensed rebuilder can issue such a title to reflect the amount of work done on the vehicle.
Reconstructed titles are often registered for road use and must pass certain road inspections before they are certified roadworthy.
Affidavit titles are often issued in place of the original title documents. This is common in instances of lost title documents.
Certificate of Destruction
A certificate of destruction is common when an insurance company has paid a claim for a vehicle and has taken ownership of it from the insured. This type of title forbids the car from being driven on the road and destines it for destruction.
In some cases, insurance companies issue certificates of destruction to mildly damaged cars to discourage anyone from driving them.
Flood/Water Damage Title
A flood or water damage title is issued to vehicles that thunderstorms, floods, or water have badly damaged. Such vehicles often have bad mechanical or electronic components and may be sold to a junkyard or auctioned.
Watch out for these vehicle types if you're buying from a used car dealership or an auction.
Odometer Rollback Title
High mileage tells you how long the car has been driven. It also indicates the remaining life cycle of the vehicle. Some unscrupulous people may decide to roll back the odometer reading to conceal its actual mileage and to command a higher price for it.
This fraudulent act can only be detected by experienced and certified mechanics. Once detected, the car can be branded with an odometer rollback title to reflect its actual odometer reading.
Lemon law is different in each state. A car is typically called a lemon when at least one of its components has been repeatedly faulty, even after repairs. A lemon vehicle can be returned to the manufacturer or seller. However, it often involves some legal process.
A car that qualifies as lemon can be issued a lemon title to prevent unsuspecting people from purchasing it and inheriting the persistent problem.
Dismantled titles are issued to vehicles that have been badly damaged and deemed totaled. A totaled vehicle often requires a higher repair cost compared to its original value. When the repair cost exceeds the car's value, it is branded as totaled and can be issued a salvage or dismantled title.
Car Title Frequently Asked Questions
What does a title brand mean?
A title brand is a mark on a car title indicating it is dangerous for use on the road. Title brands are common to vehicles with mechanical damage or extensive issues caused by accidents. A title brand can be found on cars qualified for junk titles, salvage titles, or certificate of destruction titles.
What's the difference between a car title and car registration?
A car's title or pink slip proves the vehicle's ownership and tells the type of vehicle it is. On the other hand, a car's registration authorizes it to be driven on the road.
For clarity, all cars have titles, but not all cars are roadworthy.
How do I get my car title?
If you're buying a new car, the dealership selling to you will send the title paperwork to the local Department of Motor Vehicles (DMV) or state transportation or revenue agency for processing. The official car title certificate will be sent to you once it's been processed.
Can I get a copy of my car title online?
Yes, you can get your car title online, in person, or by mail, depending on your state and its provisions. Many states offer residents an option to request their car titles online.
How do I transfer car title?
A car title transfer is an important part of a car sale or purchase process. A car's title transfer shows the release of ownership from the seller to the buyer. The seller signs the title release document and the buyer takes the signed title to the DMV for a title re-issue in their name.
To facilitate the title re-issuance, the buyer may need to present additional documents, including the bill of sale or the car's ownership transfer.
How long does it take to get a car title?
It can take two to six weeks to process a car title. The car title processing time depends on the state handling it. You may need to contact the appropriate state authority to confirm this information.
Can I sell a car without a title?
Yes, you can sell a car without a title. However, you need proof of ownership to confirm the car's ownership. In most states, selling a car without title and proof of ownership is illegal.
Where do I sign my car title when selling?
When selling your vehicle, you must sign against your name in the seller's field at the back of the title.