Buying Cars Without a Title – What You Need to Know
You’ve been searching for the perfect car and found it. The price is right, but there’s one catch; the seller does not have the title to the vehicle. A car’s title is its declaration of ownership. If you buy a car that has no title, it is altogether possible that the person holding the title could claim to own the car, even after you plunk down your hard-earned dough to buy it. What’s more, to register the vehicle in your name, you will need the title, since this proves your ownership during registration. If you can’t register the car, you can’t insure the car or drive it legally. So, are you out of luck? Or can the issue of having no title rectified? Let’s delve further into missing titles and the ramifications of such on your used vehicle purchase.
Why is the Title Missing?
One of the first things you should ask the seller of the car is “why is the title missing?” Hopefully, the seller is truthful and has an explanation that makes sense and that can be somehow backed up by evidence. After all, there are a few possibilities as to why the seller of the car may not have the title. Some of them are legitimate. Others may be downright shady. The title could have been lost or misplaced, or it could have been damaged or destroyed. Perhaps the title was stolen. Inversely and more ominously, it could be a stolen car. A missing title might also indicate that it is a “flood” car that has been underwater in its past, or it might be an indicator of a vehicle with a salvage title, which isn’t altogether a bad thing. Another possibility is that the seller is participating in what is known as "title jumping." That involves two or more individuals selling cars without going through the title process, generally to avoid the payment of sales tax. The practice is illegal in every U.S. state.
Check the Vehicle’s History
The vehicle identification number, or VIN, on a motor vehicle can be invaluable in finding out its history. Services such as AutoCheck and Carfax can help you confirm the legal and title status of the vehicle. These services also provide reports about the odometer, previous accidents involving the car, insurance claims associated with the VIN, and more. If you run a report and find information that is contrary to what the seller is telling you, you might want to tuck tail and run the other way at this point.
Check With the Previous Owner
If the seller has a bill of sale from the previous owner of the car, use it to track the person down online or based on the info on the paperwork. Ask the previous owner to help you obtain a title for the car, and offer to pay any costs incurred in doing so.
Check With the DMV
A local DMV office may be able to answer some basic questions about the car in question by running a VIN search. It is possible that you can uncover information about the vehicle’s history in your state. You can also confirm the status of the title with the DMV clerk. Keep in mind that the DMV is limited on the information they can give you; for example, any confidential information, such as names and addresses, will probably be off limits.
Check the National Insurance Crime Bureau (NICB)
The NICB offers a free VinCheck service to help the public determine the legal status of a vehicle. The service will determine if the vehicle has been stolen and if it has not yet been recovered by law enforcement. It can also alert you as to whether the vehicle has been reported as a salvage or junk car by an insurance company.
Proceeding with the Sale
If everything seems to “check out,” then you may decide to proceed with the sale. At this point, you have a few options to consider:
Have the seller request a duplicate title. Although the form you’ll need to fill out varies by state, the seller can submit a request. They will need to provide his name and address, the VIN for the car, the car’s mileage, and proof of identity. It will take a few days for the duplicate title request to be processed and a new title issued. If the information provided by the seller is false or inaccurate, then it can result in a rejection of the new title. It is best practice to delay the purchase until the new title is in the seller’s hands.
Complete a bill of sale. If you don’t want to wait for the new title to arrive, you might want to complete a bill of sale. It is an essential part of the sales process for any vehicle sale, but it is doubly important if there is no title present. Before you pay for the car, write out a bill of sale that includes the sale’s details, including the VIN, sale price, and the car’s odometer reading. Be sure to include that the seller to supply title on the bill of sale and to include complete info on yourself and the seller. This includes all contact information, including full legal names, driver's licenses, addresses and phone numbers.
Go for a surety bond title. It's not available in all states, but it generally requires submitting proof of purchase and residency as well as proof that the care is not a salvage vehicle. Once everything is verified by the surety bond company, you pay a percentage of the bond amount. A bonded title indication can be removed from the title within three to five years, provided no issues arise with the title in the interim. After that, you can get a clean title in most cases.
Some Points to Consider
Before taking the plunge and going for a motor vehicle without a title, it’s important to remember that in most states it is illegal to buy or sell a car without a title and to drive a car without a title. Still, people do it all the time, much like jaywalking, regardless of it being illegal. A bill of sale does not wield the same power as a title, so you may be questioned about ownership until you have the actual title in hand. Moreover, the replacement process can be lengthy. It will not be possible to register the car at the DMV or insure the vehicle during that time, so it makes the car undrivable until your replacement title is in hand. You can’t get license plates for the car in most states anyway by using just the paperwork for a lost title.
Is It Worth the Hassle?
If all of this seems like a lot of work, it can be. While it is often possible to replace a car title yourself, the paperwork involved and the time you will spend at the Department of Motor Vehicles make the prospect unattractive to most folks. You may want to ask yourself if the time spent on a lost or missing title is worth it. Weigh your frustration and the time required to correct the title issue against the vast inventory of used cars on the market to determine if you want to invest any elbow grease in getting a title for the vehicle. It is more than likely that you might buy the same car or a similar car elsewhere with no title issues. By contrast, if the vehicle really is hard to find, you may consider it time well-spent and not mind putting in extra effort to become its owner. Ultimately, the choice to purchase a car without a vehicle title or not depends on just how much you want the car in question and how much you’re willing to do to own it.