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Why Is Your Car Title So Important?

If you own a vehicle you are familiar with a car title but you might not be fully aware of why they are so important. There’s more to a vehicle title than you might realize. Knowing more about all the details of a car title will help you avoid any problems in the future.

Keep reading to learn more about what car titles are and their importance.

Car Title Purpose

The car title is the official document that states that you are the legal owner of a vehicle. Normally the Department of Motor Vehicles (DMV) issues a title once a vehicle is paid for in full. Car titles will usually have the owner’s name and address, and the vehicle’s information such as make, model, and year, and VIN number.

If the vehicle is ever sold the owner signs the title to the new buyer in the appropriate area on the title itself. Once it is signed the new owner can use the title to register the vehicle under their own name to show that this vehicle is now their responsibility. 

A car title is also necessary if you are ever in a bind and need to use a title loan to borrow emergency funds. 

Types of Vehicle Titles

At the beginning of a vehicle title’s life, it is always considered a “clean title.” Throughout the life of the vehicle when there are any major events it is recorded on the title of the vehicle. For example, if a car is stolen there will be a change in the vehicle’s title noting this. 

Most states recognize these four title classifications:

Clear Title

A clear title is not to be confused for a clean title. A clear title shows that there is no levy or financial lean on the vehicle. As long as the title is clear the owner on the title is the sole owner of the vehicle and there are no creditors that can claim ownership because the vehicle is not fully paid off. 

Clean Title

This title shows that the car has never been declared a total loss or has never been in a major wreck. Keep in mind that this does not mean it has never been in an accident. If it has been in an accident it might not have been enough to need a salvage title.

Salvage Title

When a vehicle’s damage surpasses a certain percentage of the car’s value due to a flood, fire, accident, or another type of disastrous event the vehicle might be given a salvage title. This states that the car can’t be sold or driven under its current condition. 

Rebuilt Title

Once a vehicle is repaired after being issued a salvage title it is given a rebuilt title after the state inspects the vehicle to make sure the repairs are indeed satisfactory. Due to the situation, keep in mind that it might be difficult to get insurance on the vehicle. 

Now You Know the Ins and Outs of Car Titles

Now that you are more aware of what exactly a car title is and the different types of car titles you will be informed in any future scenarios that have to do with your vehicle’s title. If you are ever buying or selling you will feel better equipped with the knowledge above.

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