You're ready to buy a new car and want to sell or trade in your old Ford, Honda, or whatever – but can't find the car's title. Not having a certificate of title doesn't mean you're stuck with your used car, though. Learning how to sell a vehicle without a title is easier than you might think.
What is a Car Title and Why is it Necessary?
Just as the deed to a house is the legal document that proves ownership of the house, a car title is a document that shows legal ownership of a car. Some states call the record a title, certificate of title, or pink slip because they used to be printed on pink paper. A state’s motor vehicles department issues titles to a vehicle's owner and sellers transfer their certificates of title to whoever buys their cars.
Generally, new car owners need car titles for the vehicles they purchase, and if you're selling a used car, you're the one to give it to the new owner. Giving your purchaser the title proves you're the true owner of the car, it's not stolen, and you have the right to sell it because there are no unsatisfied liens recorded on the title document. Buyers in most states need a certificate of title to complete the title transfer from the seller's name to their own, which establishes their full ownership rights.
Understanding the Different Types of Titles
As is true for deeds to houses, such as warranty deeds and quitclaim deeds, there are several types of car titles. A brand new car or a used car that has never been in a severe accident has a "clean" title. When a vehicle is damaged so badly in an accident that the insurance company calls it a total loss, or totals it, its title becomes a "salvage" title, because it's considered not worth repairing. Sometimes individuals decide to rebuild a totaled vehicle, and when that happens, the car is issued a “reconstructed” or "rebuilt" title before it can be sold. These title designations make potential new buyers aware that the car was previously in a condition so bad that it could not be driven, and significant repairs have been done to restore it.
If you purchased an untitled car and now wonder how to sell a vehicle without a title, consider obtaining a "bonded" title. A "bonded" title is a regular title, but it lets buyers know the title comes with a lost title bond. This surety bond protects you and previous owners of the car if a question arises about ownership and title transfers. If three to five years go by without title problems, the car owner can apply for a clean title. Before committing to pay a company for a lost title bond, check with your local DMV about whether you qualify for a bonded title. Some companies that offer lost title bonds provide free instant quotes, so shop around.
Expect to need a title if a private party plans to buy your used Subaru, Ford, or Lexus, or if you're trading it in for a new car from a licensed dealer. However, you might not need a title if you're getting rid of a junk car. For some junk car buyers, your driver's license and valid registration are enough to seal a cash deal. Car junker requirements vary, so do some research if you want to make a junk car sale without a title. If you prefer to be on the safe side, take advantage of simple ways to obtain a certificate of title for your vehicle when you don't have the title in hand.
How the DMV Can Help You Sell a Car With No Title
Every state's DMV has a method of helping car owners who have lost titles or need duplicate titles. To get a duplicate title in Missouri, just complete Form 108, Application for Missouri Title and License, include your payment and mail them to the state's DMV. After two weeks, use the DMV online inquiry form to follow up on your application's status.
New York replaces certificates of title by mail when the owner of the vehicle places an order for a replacement title online, applies at a local DMV office, or submits an application by mail. No matter how you apply, New York's Department of Motor Vehicles mails the new title to the address the owner of the vehicle has on file at the application time. New York's DMV sends replacement vehicle titles within three business days of receiving orders but offers express mail service for an additional fee. With the replacement title in hand, you no longer face the dilemma of how to sell a car without a title.
California provides duplicate titles, paperless title certifications, and title transfers with duplicate or paperless titles. Apply by mail or in person at your local DMV. If you go to the Department of Motor Vehicles office, make an appointment first to avoid a long wait time, and take your California photo driver license or identification card with you.
Selling a Car Without a Title When There's a Car Loan
Whether you purchased a new car or a used car, if you took out a car loan for it, you have a bill of sale, but the lender may have the title. Typically, lenders hold car titles until the owners of the vehicles pay the loans in full. If you're ready to sell in this situation, work with your lender or lienholder to calculate the payoff amount. Once you know how much you need to pay the debt and make a profit, reach an agreement on the sale price with your potential new owner. When you make the payoff with the buyer's cash, the lender releases the vehicle title to you, and you deliver it to the new owner.
How to Sell a Car When No Title Was Issued
Some states don't issue car titles for cars over a certain age. New York doesn't require titles for vehicles from 1972 and older, and Connecticut doesn't require vehicle titles for model years more than 20 years older than the current year. The last owner's registration, a Supplemental Assignment of Ownership Form Q-1, and/or Bill of Sale Form H-31 are all a buyer needs to register a non-titled car in Connecticut. A handwritten bill of sale is acceptable as long as it describes the vehicle, states the sale price, date sold, and contact information for the buyer and seller.
Going the bill of sale route is likely to work for states that don't issue or require titles. Make sure your bill of sale includes details about the car you're selling. State the car's make, model, year, vehicle identification number (VIN) and any distinguishing features, such as a custom paint job or special accessories. The sale price, date, buyer's and seller's signatures, and contact information, including phone numbers and email addresses, are essentials. Notarizing the bill of sale document adds an extra level of legal protection. Depending on the state's requirements, a buyer or seller might need to complete other paperwork for the new owner to receive a title.
Knowing how to sell a car without a title and how to obtain a title when it's necessary gives you an advantage when you're ready to make a deal. Whether you're negotiating a used car sale or a trade-in of your vehicle for a new one, you have peace of mind because the proof of ownership you and the buyer need for a smooth transaction is in your hands.