A vehicle title is a document that proves legal ownership of a vehicle such as a car or truck. Titles are also used to verify odometer mileage and to confirm the date of last sale. A vehicle cannot be registered, issued license plates or driven without a title. In some states a car cannot even be sold for salvage without a title.
A vehicle title certificate lists the name and address of the owner of the vehicle, the date of the vehicle's last sale and the odometer mileage on that date, the Vehicle Identification Number, or VIN, and any outstanding liens against the vehicle.
Issuance of Title
Each title is identified to a particular vehicle by reference to the VIN. The VIN is engraved on the surface of the vehicle by the manufacturer (the location of the VIN depends on the vehicle's make, model and year). The title to a new car is issued by the department of motor vehicles of the state in which the vehicle is first sold from a dealer to a buyer. The title must be amended every time any of the information in the title document changes, such as when ownership changes or liens are paid off.
At any given time, at least two copies of the title document exist--one copy in the files of the state DMV and one copy in the custody of the owner. If the owner loses, destroys or damages her copy, she can obtain a duplicate title from the state DMV by proving that she owns the car (personal ID is good enough in most states, although it is a good idea to retain the original bill of sale), filling out an application and paying a small fee.
Bonded titles are issued when the original title document filed with the state DMV is not available. This may occur if an owner abandons title and subsequently sells the vehicle to someone else, if it cannot be ascertained which state titled the car, or if the car was imported from abroad without a title. In order to obtain bonded title, the owner must establish that it has not been reported stolen, that there are no liens against it, that it meets applicable safety standards, and that it meets minimum state insurance requirements. In most cases, the amount of the bond will exceed the value of the vehicle. A bonded title will only be issued to the owner of the vehicle, normally established by the production of a bill of sale.
Salvage and Rebuilt Titles
When a vehicle is damaged so badly that the cost of repairing it will exceed its book value, the insurance company will declare it a salvage vehicle and a salvage title will be issued. A salvage vehicle cannot be driven on public roads. As long as it carries a salvage title, it can be sold only for salvage value regardless of the actual condition of the vehicle. If the vehicle is rebuilt to roadworthy status, a rebuilt title can be issued that will allow it to be sold and driven, although the rebuilt status of the vehicle will be permanently noted on the title .
Read More: What Does Salvage Title Mean?