Can You Sell Your Car Without Its Title?

iStock 597261528 Credit: shiny car for sale in summer weather, parked with a red vibrant color exterior.

Selling a car is normally quite a straightforward process. Once you’ve agreed on a price, you create a bill of sale and the sign over the title to the new owner after receiving payment. You then fill out the Notice of Transfer and Release of Liability, which is used to notify the Department of Motor Vehicles (DMV) that you’ve sold your vehicle. After that, you’re done with paperwork unless you’ve got loads of maintenance records to hand across to the new owner. If not, pass the keys over and you’re done. With the title, selling the car is a simple process. Without it, you’re complicating things unnecessarily.

The Bank Has the Title

This scenario happens when a driver buys a car through finance. The bank normally takes the title until the loan is paid in full. When you go to sell the car you’ll need to arrange with the new owner and the bank but this isn’t normally a problem as long as the new owner is willing to hand over the payment to the bank who will pass across the title on receipt of the funds. Some really accommodating banks will accept payment online and then send the title through the post. Others prefer to deal with you and the new buyer face to face.

From State to State

There are differences in laws from state to state that are fine unless you cross from one state to the other as you would when purchasing a car from a neighboring state. Some states won’t issue titles on cars that are 25 years or older. Others have a 15 year limit so if you’re buying from a state that doesn’t offer titles and taking the car back to one that does, you’ll need to get a bill of sale from the seller that shows the date of sale, details of the car you’re buying and the contact information for both the seller and the buyer. Make sure the seller signs the document too and then take it along to the DMV who will instruct you on how a new title is issued.

Duplicate Title

Losing the title is easily done since it’s just a piece of paper that you might not file with other important documents for the car like service records and your driver’s license. Maybe you have the title but it’s water damaged or been damaged by a pet. If that’s the case, you’ll also need to order a duplicate title. Just complete a replace car title form from the DMV and submit it with payment and sit back while the local DMV office wades through the backlog of paperwork and gets your new title out to you.

Bought a Car with No Title

If you’ve bought a car with no title, you can correct this yourself without going back to the seller. You’ll need to get in touch with your local DMV office who will issue you with a Lost Title Bond. This is a form of insurance for the DMV and any previous owners of the vehicle that costs you around $100. With the bonded title you are promising the DMV that you are the true owner of the vehicle but if you’re not and someone comes forward and makes a claim on your Lost Title Bond, the surety company will deal with it and then approach you. If you are the true owner of the vehicle, you’ll never have to face that and you’ll be able to apply for a clean title after three to five years have elapsed depending on which state you live in.

Beware

Although you can get around the lack of a title when you buy a car, should you purchase a vehicle without one? There are several legitimate reasons why a buyer wouldn’t have the title but there is one compelling reason why the seller might not have the title which you shouldn’t ignore. Maybe the seller doesn’t have the title because they stole the car or acquired it from someone who did. Make sure you’re handed over some proof of ownership if the seller doesn’t have the title.