What is a car title?

A car title is one of the most important documents you’ll sign when you purchase a vehicle. It establishes you as the vehicle’s legal owner and is often used for the vehicle to be registered and for ownership to be transferred.

The title is issued by the state government where you live and, while information included on the document can vary between states, you’ll generally see the following details:

• Vehicle identification number (VIN)
• Make, model, year and color
• Odometer reading
• Owner’s name
• Lienholder when the vehicle is financed

What to know when buying a vehicle

When you purchase a vehicle from a dealership, the dealership staff will typically take care of the title work as part of the sale. Buying a vehicle out of state may be a little different, however. In these cases, the dealer might give you the documents to take to your state’s motor vehicle agency or they may mail it to your local office for you.

Many shoppers will apply for financing when buying a vehicle and when this happens, there are some extra steps involved with the titling process.

In non-title holding states, the lienholder – your lender – will keep the title until the financing is paid off. You will only receive the title when your account reaches a zero balance.

In title holding states, you’ll get the title shortly after you purchase the vehicle with the lienholder listed. Once your account is paid off, your lender will send you a lien release that then gets attached to your original title.

A lot of states are now using an electronic car title system called an Electronic Lien and Title (ELT) or e-title. An ELT is simply an electronic record stored in a database that may be converted to a paper title later.

For financed purchases, the state will send the lienholder an electronic transmission of the title record instead of paper documents. When an action needs to be taken on the title record; for example, the loan is paid off, the lender sends an electronic transmission to the state to remove the lien.

Depending on how the state’s electronic title program works, a paper title may be issued and forwarded to the legal owner or the title may remain an electronic record until the owner requests a paper one.

Nearly half of the country’s states currently have either mandatory or voluntary electronic title programs and more are expected to join them. If you’re wondering about your own state and would like to learn more, reach out to your local state titling office for further information.

Transferring a title

Your vehicle’s title will likely be needed when it’s time to transfer ownership of the vehicle. There is often an assignment of title section on the back where details including the buyer’s and seller’s names and addresses, date of transfer and signatures are recorded. Some states will use a separate title assignment document for this purpose.

When you sell or trade a vehicle at the dealership, your dealer will handle the title transfer as part of the paperwork except, as noted, for out-of-state transactions. If you’re selling a vehicle privately, however, it’s something you will need to complete with the buyer.

Should you owe money on the vehicle you’re selling, you’ll need to contact your lender to pay off the financing or arrange with the buyer to have the balance paid off within the terms of the sale.

Storing and updating your car title

When you receive your title, be sure to keep it in a safe place so that it’s protected and handy when needed. It’s also important to keep your details updated to avoid any inconvenience or delay in a future transaction.

For instance, if you change address, contact your vehicle agency’s title office to have the address updated. In the event you move to a different state, check whether that state requires you to change your title and, if so, work with your local office to have your title forwarded.

Start shopping for a vehicle

A car title is a key part of the vehicle ownership journey. If you’re at the start of that journey and looking for a car, truck or SUV, check out the lineups from Chrysler, Dodge, Jeep_®, Ram, Wagoneer, Alfa Romeo and FIAT^® brands, and shop with financing from Chrysler Capital. Whether you’re interested in a new or preowned model, there are a wide range of high-quality vehicles to choose from so you can buy or lease with confidence.

Take a couple of minutes to see if you prequalify for financing* and locate your nearest dealership.

*Prequalification is subject to approval. Final credit terms are subject to change based on submittal of a credit application at a participating dealer, which may impact your credit.