Buying a new car can be an exciting time, as you wait to get behind the wheel and hit the road. But sometimes there can be some terms you’re not so familiar with, which can complicate things.
For example, most people don’t know that the car title and registration are not the same thing. And knowing the difference between car title vs registration can get a bit confusing, as well as knowing the several different types of car titles.
Well, fear not, as we’ll explain all there is to know about your car title and car registration, and most importantly, the difference between them.
Car Title Explained
In simple terms, a car title is a document that legally proves you own the vehicle. It’s a physical document, issued by the state’s department of motor vehicles (DMV), at the time you buy the vehicle.
If you used a loan to purchase the car, then the lender will have control of the title. The car title will be in your name once you pay off the loan amount.
There’s essential information included on the car title, such as:
- The owner’s name
- The Vehicle Indicator Number (VIN)
- The vehicle’s make, model, and year
- The date the title was issued
- The type of title
Every state has different titles, and title requirements, and the look of the document itself varies between states.
The title is transferred over to the new owner, if you were to sell the car. Again, the process varies depending on the state. In some states, the transfer does not require a notary, allowing the previous owner of the car to simply record the new owner’s name on the title. However, for other states in the US, this is mandatory when buying or selling a vehicle, and the transfer must be notarized.
The car title not only proves ownership, but can also determine the condition of the vehicle. Here are some examples of the different types of car titles:
- Clean title — this states the car has been thoroughly inspected, and does not have any outstanding finances that will affect its sale. It also means it has never been involved in an accident or been damaged in any way. You’ll find most new cars come with a clean title.
- Salvage title — this applies to a car that has significantly decreased in value. For instance, if it has been substantially damaged after an accident. These cars are usually not eligible for loans, and cannot be driven until fixed. In some states this is the same as a junk title.
- Rebuild title — this title is given when the car has been rebuilt after severe damage (or issued a salvage title). It’s usually issued by an insurance company or collision center where the repair took place. A successful safety inspection must also take place in order for the car to be road legal.
- Junk title — this is when the car cannot be repaired and not roadworthy. It is usually dismantled and sold for parts
Other titles include bonded, dismantled, reconstructed, odometer rollback and water damage — all of which have different qualifying criteria.
Car Registration Explained
The car registration is the process of registering with your state’s DMV (or Transportation Department depending on the state you live in). It legally proves that your car is safe to drive on the road, and that all the correct taxes and fees have been paid.
The car registration usually comes in a small piece of paper or card, but can look different depending on where you live. You’ll also receive a license plate and a registration sticker, as well as the document.
You should always carry your vehicle registration document whenever you are driving on the road, and so it’s best to keep it somewhere like your glovebox, for example.
Registration usually needs to be completed every year, but can extend to two years in some states. If you were to move to another state, you would need to update your registration.
Title VS Registration
So, to conclude the main differences between car title and registration are:
- The title is a document referring to the ownership of the vehicle, whereas registration proves the car is safe to drive in your state.
- You cannot register your vehicle with the DMV without proving ownership through the car’s title.
- You need both a title and registration to own a car.
It’s always best to research or check with your local DMV to see how the car title and registration varies in your state, and how these variations apply to you.