Term of the Day: Car Title
A piece of paper can have so much value. Money, social security cards, marriage certificates. The title for your vehicle also holds significant value–it provides proof of ownership for your vehicle. Have you ever thought about the reason why car titles are so important?
What is the overall purpose of a car title?
As mentioned before, โthe certificate of title is a legal document that indicates the legal owner of the vehicle.โ The title is typically issued by your Department of Motor Vehicles. When you sell your car, the title will be transferred over to the new buyer, which is then used to register the car in the buyerโs name. A title is also important when buying a car because it mentions basic information about the carโs history, depending on the kind of title the vehicle has.
ย ย ย ย ย ย ย ย ย ย ย What information is included in the car title?
Information about the owner including:
- Name
- Address
- Year, make, model, and vin number of the car
- The date which the car was sold
What are the different types of car titles?
Every vehicle begins its life with a โclean title.โ If an incident occurs during its life, the insurance company records the event and files for a change in title. As a result, there are multiple types of titles (the name for each title depends on the state.) In general, the following titles are recognized by each state.
Clean title: A clean title is ideal when searching for a car. This type of title indicates that the vehicle has never been declared a โtotal loss,โ or been in a serious accident. If the vehicle has been in a minor accident, it will still have a clean title. A car with a clean title is often likely to have a longer lifespan.
Clear title: Although clear title sounds similar to clean title, they are entirely different things. A clear title states that there is not a lien on the vehicle. The owner having a clear title indicates that they have sole ownership on the vehicle without any creditors or third parties being involved.
Salvage title: After the car is involved in a disastrous event, such as a car accident, fire, or flood, the insurance company can decide to โtotal outโ the vehicle. This happens when the cost to repair the vehicle exceeds the current value of the vehicle. If the vehicle has a salvage title, itโs going to be cheaper. However, it can be more susceptible to mechanical issues and be more difficult to insure.
Reconstructed title: When a salvaged car is rebuilt, the state will inspect the vehicle to ensure the repairs are satisfactory before it can be issued a โrebuilt/reconstructed titleโ. There is a red flag for reconstructed titles as well, as they may be more difficult to insure.
Car titles are evolving along with technology. Check back in tomorrow to learn more about whatโs changed with car titles.
Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder
Search All Blogs
Search All Blogs
Read More Insurance Blogs
Life Insurance Myths Busted: Unveiling the Simple Truths Behind Financial Security
Considering life insurance but confused by the myths? We clear the air on common misconceptions and show you how to get simple, affordable coverage.
The Farewell Financial: Planning a Peaceful Goodbye
Beyond Goodbyes: A Guide to Navigating Funeral Costs and Life Insurance
Why Life Insurance Matters for Businesses
Death and the Business Owner: How Life Insurance Can Secure Your Legacy
Beyond the Grave: Burial Insurance vs. Life Insurance Explained
Don’t Be Buried by Confusion: Understanding Burial and Life Insurance
From Bronze Age to Boomers: How Life Expectancy Went From Meh to Magnificent
How Long Will You Live? A Look at Life Expectancy Throughout History (and Why You Might Need Life Insurance)
Beyond “My Beloved Spouse”: A Guide to Choosing Your Life Insurance Beneficiary
The Beneficiary Bunch: Understanding Your Options
Life on the Edge? How Your Hobbies Can Affect Your Life Insurance Rates
Beyond the Premium: Unveiling the Unexpected Links Between Hobbies and Life Insurance
Unveiling the Different Players (and Why We’re Your Guide!)
Insurance Companies: Not All Created Equal! Find Your Perfect Match with Our Help
Cracking the Code: Cash Value, Loan Value, Surrender Value – It’s All in the Life Insurance Policy!
Beyond the Death Benefit: Unlocking the Hidden Gems of Your Life Insurance Policy
Beyond the Payout: 6 Unexpected Perks of Life Insurance You Might Not Know
More Than Just a Payout – Unlock 6 Hidden Gems for Your Loved Ones