So, you've decided to sell your car. But, there's a problem, you don't have the title in hand. There's no need to panic or worry as this can happen for several reasons. Perhaps the document got lost, damaged, or stolen. Maybe the vehicle is an antique or classic that's sat unregistered in the garage for years. Or, you may have originally purchased the car without a title.
Regardless of the cause, you're now wondering whether selling the car without the title is possible. Let's, dive into the answers.
What Is the Vehicle Title? Why Is it Important?
In simple terms, a vehicle title is a legal document that verifies who is the rightful owner and user of a particular vehicle. It is a statement of property rights, not unlike the deed to a house. The title is essential for proving ownership of the car and is also necessary for registering the vehicle. It's impossible to do so without the title.
As we'll explain below, the title also becomes vital for buying and selling a vehicle.
Can You Sell a Car Without a Title?
The answer is yes, it's possible to do so. But the best course of action is to get your hands on a title if possible. Selling a car without the title is one of those things that might be technically possible to do, but it isn't an approach to pursue. Below are some of the ways to get a title into your hands to make the sale official.
Getting the Title Back from a Lender
One of the most common situations in which people find themselves without a title when selling a car is if they still owe money on it. Let's say that you purchased a vehicle from a dealership and are paying for it via a four-year financing plan. After three years, you decide to sell the car because circumstances have changed, and you no longer need the vehicle.
In preparation for the sale, a search of your documents can't produce the title. You've checked high and low with no success. Why is this? Chances are, the title is in the hands of the finance company. When a car is financed, the legal ownership and rights to that property sit chiefly with the lender until it's paid off. Of course, you have exclusive rights to use the vehicle (according to the loan agreement), but failure to make the monthly payments can lead to actions including repossession.
The lender will send the title once you pay off the loan. Until then, there are a few pathways before you. For one, explain the situation to a prospective buyer. You'll be using the funds from the sale to pay off the loan, secure the title, and then hand over the car and title to the buyer.
Alternatively, if the funds are available, pay off the loan first to have the title in hand before beginning the selling process. This is the better way to go because there's no waiting time for the buyer. The lender will send a release letter along with the title to confirm the vehicle has been paid off. Take these documents to the DMV to get an updated title free and clear of any loan.
Applying to the DMV for a Replacement Title
Another common situation is if a title gets lost, damaged, or stolen. In this case, the solution is to apply for a certified copy of the title from the DMV.
Each state will have a specific form to fill out; for instance, in Texas, it's Form VTR-34. Complete the form and follow the accompanying instructions. While you can mail the form, it's faster to go to the DMV in person. Bring it, along with a photo ID, to a nearby office. There's also a fee to pay ($5.45 in Texas). Each state will have its own form and may require additional documentation. It's always good to verify what's required by your state's DMV for a replacement title.
Getting a Title for an Abandoned Vehicle
An interesting circumstance is when a car or other vehicle gets abandoned on your property, and there's no paperwork. In specific cases, an abandoned vehicle on your property can be recognized as yours. But, you'll need a title to sell it. Not every state has an ideal solution, but some jurisdictions allow for a special alternative type of title that permits an individual to claim legal ownership of an abandoned vehicle. Ownership status then gives the title holder the legal right to sell the car.
The process usually happens by first making an application to the DMV, with the key information being the vehicle identification number (VIN). The DMV will then attempt to contact the vehicle's last owner. If this is unsuccessful or the owner refuses to take responsibility for the car, you may be able to take ownership. Check with your DMV to see what's possible and what alternatives may be available.
Use a (Notarized) Bill of Sale
There's also a solution for getting a title for an older vehicle, perhaps one that was never registered. Some states didn't issue vehicle titles until late in the 20th century, so classic cars from the 1930s to as late as the 1970s may not have one.
Check with your state's DMV, but alternative documentation such as a notarized bill of sale can support ownership and help with issuing a title.
What If I Bought the Car with No Title?
If you bought the car from someone claiming not to have the title, you'd want to recall the facts of the situation. For example, was the title in the hands of a lender (see above)? Or did they make some excuse about a lost title?
If things seem suspicious, then there's a chance they didn't have permission to sell the vehicle, and you're currently in possession of stolen goods. At this point, seek out legal help right away. You'll then want to report the situation to the police. Showing good faith and surrendering the car should prevent legal difficulties, but an attorney will provide the best advice.
Anyone selling a car that can't provide a title (or a path to a title if there's a lender) is someone to treat with suspicion. Even if the reasons they give are the ones we have mentioned above, a law-abiding seller would still be able to provide a replacement title.
The lesson is to always insist on the title when buying; otherwise, walk away. Just keep the idea of "no title, no sale" in mind. This vital document ensures the deal is legitimate and will make selling the car much more effortless. While it may be technically possible to sell some cars without a title, it is rarely, if ever, advisable.
Learn More From Topmarq Articles: How to Get a Dealers License To Start Selling Cars and What to Know about ACV Auctions .