What is a car title and do I need it to sell my car?

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9 min read

You’re getting ready to sell your car. You got a great offer in minutes from Peddle, accepted your offer, and now you want to make sure all your ducks are in a row so that handoff of your car is easy and seamless. Right?

Title issues are one of the most common problems that could delay a successful sale of your vehicle, so ensuring your title is properly executed will help things go more smoothly, specifically ensuring you get paid at pickup. Peddle does accept cars without titles, but it will impact the resale value of your car. Obtaining a new title could feel daunting, which is why we’ve put together resources to guide you through the process.

Here are some resources we’ve created to answer some common questions about car titles when it comes to selling your vehicle to Peddle.

Next, we will dig deeper into what a car title is and why it’s important.

what is a car title?

Your car’s title is a small piece of paper that’s kind of like a rap sheet—or a legal document that lists the owner of the car and allows that ownership to be transferred.

Titles vary from state to state, and even within states, so it can be tricky to manage the details and processes associated with your specific title type. We fancy ourselves experts on the subject, but even as pros, we find ourselves reaching out to our friends at DMVs to get clarification on things from time to time. The most confusing title issues are transferring the title to a new owner, or turning the original car title into a salvage car title after a big car failure, crash, fire, or flooding type of event. But there are many common uncertainties surrounding this often elusive slip of paper.

why is your title important?

A car title indicates if a car has sustained damage or can be unsafe to drive. It includes important information that most people want to know before they buy. There are at least 18 types (or “brands”), which are officially classified by the state and appear on the paperwork. Title types vary by state, but here are some instances of title types.

  • Clean
  • Rebuilt
  • Non-repairable
  • Salvage
  • Junk
  • Totaled
  • Lemon
  • Flood
  • Reconstructed
  • Manufacturer Buyback
  • Odometer Rollback
  • Gray Market
  • Hail Damage

Your car title is considered evidence of ownership, but it is not the definitive source of that information. Your car title IS NOT:

  • Proof of purchase (that's a "bill of sale")
  • Proof of financing (however, your lienholder information will be on the title document)

In a new-car scenario, your dealer will fill out the title application and forward it to your state’s department of motor vehicle records.

If you then want to sell that car to someone else, you will need to sign the title and hand it over to the new owner to file with the DMV. Most states require a bill of sale to accompany title transfers. Every state does it a bit differently, so check with your local DMV.

Your state will then issue a new title to the new owner and retain a copy of the old title. Every time this car is bought or sold, this transaction will take place, leaving a very definitive paper trail of the life of the car.

what's in a car title?

Titles vary from state to state, but generally, they have all the car’s basic info. Owner’s name, vehicle identification number (VIN), mileage at the time of the sale, weight class, and the lienholder information (if the sale is financed). There is also an “assignment” section with the dates of all sales, with all the buyers' and sellers' names, addresses, and signatures.

car title replacement

You’ve looked far and wide for your car title and can’t find it. You may be asking yourself, “How can I get a copy of my car title?” If you don’t know where your title is, yes, you can replace your title.

The process for requesting a new car title varies state-by-state and we recommend you reference our state-by-state guide. If, for example, you are selling your car in Las Vegas or Houston or Chicago, or Austin, or Los Angeles, or Philly, or Phoenix, you’d just send an application to your state’s DMV, which is pretty typical for most cities/states.

If your old title does magically reappear after replacement, you should destroy it—the new title will be the official car title from now on.

title types

Per the above, a vehicle title is a legal form or certificate that establishes the legal owner of a vehicle.

Peddle will buy your car regardless of the title status. Here are more details on the most popular title types Peddle buys:

  • A “clear (or clean) title” is issued when there is no severe damage or liens placed on the car.
  • If your car has been wrecked beyond 60 percent of the car's value, your insurance company may deem it unfixable. If you elect to keep the car, or the insurance company keeps the car, it will have a "salvage title.”
  • A vehicle can receive a “rebuilt title” if it’s been declared a total loss by an insurance company and/or issued a salvage title but then is repaired to roadworthy condition.
  • If a car with a salvage title is rebuilt, the state may inspect it to upgrade its title to a “rebuilt salvage title.”
  • Junk titles” are similar to salvage titles, but given to vehicles that have sustained damage beyond 75 percent of the vehicle's value. Some states consider salvage and junk titles to be the same.
  • Each state has different laws that deem a vehicle a lemon (and some states do not have lemon laws). Generally, if certain elements of a car have malfunctioned several times while under warranty deeming it unsafe to drive, it is often given a “lemon title.”
  • If your car has been in a flood or exposed to deep water for any length of time, it will get a "flood title." These too can be desirable for some, but typically only for parts.

If you’re selling your car, the type of title can impact the sale price of your car. (Different titles are usually on different color paper.) For example, if your car looks like it’s in mint condition, but it has a salvage title, that would be a large red flag for most buyers.

car title or car registration?

Another common misconception is the difference between a car title and car registration. These are two completely different documents that serve two completely different purposes.

As we have discussed, your car title proves that you (and only you!) own the car. It is a legal document stating that as far as the state is concerned, you own this car.

Registrations, on the other hand, serve as a legal document proving that the car exists, and the amount of tax you will owe on the car. It also is the identifying document needed when purchasing the yearly tag for the car.

keeping this information true and accurate

The car title serves as a protecting element for the buyer. It is just as important to the seller. To prevent any legal ramifications down the road, it is important to keep the car title process and information true and accurate, so there will be no problems. It also helps to keep your title in a safe place.

can you sell your car without the title?

You may be asking, “Can I sell my car without a title?” The answer is yes, Peddle will accept cars without titles, but not having a title can impact the offer amount you receive. If you don’t have a title, you will need to be prepared to provide alternative documentation of proof of ownership. If you are selling a car without a title, start the offer process and when you are prompted about the title, answer “I do not have a title.” Our system will automatically calculate your offer based on the title status. If you’re interested in obtaining a title, see our Title Guide by State for more information.

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