Can You Buy a Car without a Title?
Simple answer. Yes, but it is risky. You can buy a car without a title BUT you carry all the risk of having made a bad purchase. Before I talk you out of purchasing, let's review a few reasons WHY you might want to buy a car without a title.
Legal Disclaimer: This article does not replace official legal advice or assistance from an attorney. This guide was created to help educate and provide information to help you navigate your decision if you are going to buy a car without a title.
A car title allows you to legally register the car and sell it in the future. Without a car title, it is normally considered illegal. Your local dmv will not allow you to register the car if you don't have a title. States like Vermont would allow a bill of sale but only for cars that are 15 years old or older.
Again, you might be able to title the vehicle but it is a complex process to ensure it's done correctly.
There is another way to use bond titles through services like surety bond titles. However, you will need to do a little work to obtain a surety bond title. This basically secures the title of the car explicitly stating that you are the sole owner of the car and any other person claiming does not have the rights. You will also need to supply your address, phone number and ID to the local dmv.
Budget
Buying a car without a title can save you thousands of dollars. However, this can also put you directly at risk of purchasing a stolen car or vehicle. If you are a legitimate owner of the car, you should have the ability to produce an official title. Photocopies of the title are not good enough to prove ownership. You should really look for an original copy.
Project Car or Parts Car
Buying a car without a title are typically purchased by buyers who are looking to part out the vehicle for specific parts or are building a track car that will not be legally driven on public roads. Thus, you are not required to title a vehicle if it's not driven publicly. However, buying a stolen car will still expose you to potential risk of having your car impounded by authorities if indeed the car is stolen.
Do your homework before you actually purchase a car without the title.
Reasons Why a Car has No Title:
- Lost Title or Damage Car Title
- Salvage Car
- Civil Disputes / Divorce / Separation
- Current Lien or Loan
- Estate Sale
Lost Car Title or Damaged Title
A lost title required a duplicate title to be requested from the DMV. Every state is different but most states require the original owner or registered owner to submit the paperwork in order to get a replacement title. Be sure to check with your local dmv regarding their requirements. If you have the original title but it was signed in the wrong spot or has some damage to the document.
Any title that has any strikethroughs or corrections will be required to get a duplicate title in order to register the car. Sorry folks, it's very important that you don't have any errors on the title itself. It's similar to a personal bank check, it needs to be pristine and clean.
Salvage Car
Sometimes when a car is deemed total from an insurance company, the cost to repair the damage exceeds the value of the car. When that happens, the car is totaled out and sent to auctions like Copart to IAA. At this point, the car is not roadworthy but can be purchased to be fixed or parted out.
There are car buyers that plan to repair but life gets in the way and the project drags on. At that point, the owner might want to unload the car to the marketplace and offer the car for sale. If you find a listing be sure to run the carfax and the VIN in Google to check for any pictures of the damage.
As mentioned before, just be weary of who and why they are selling. You do not want to be stuck with a hunk of metal worth nothing. If the car has no title, it will be very hard to get a duplicate since the insurance company already marked the VIN as not roadworthy.
Civil Disputes / Divorces / Separation
Unfortunately, relationships end and property and assets are disputed. When this happens, one party might try to sell the car as pay back to the other person. In this case, you have to be very careful not to get caught with a liability.
There might be a lien on the car and the official owner of the vehicle is the only person who is legally able to sell the car.
If the name of the seller on the title doesn't match the person you are buying from, then you might have a situation where the title is. jump Title. To learn more about Jump Titles, read this article.
Current Lien or Loan
If the person selling doesn't have the title, you will need to check if there are any liens against the car. In this case the bank owns the car and you are most likely not able to get the title, since it's with the bank. Here the seller must disclose if the title is with their bank. This proof of ownership will clarify if the bank owns it or the seller does.
If the bank has the title, the seller will be responsible to clear the title. In the past, I have successfully obtained the title but you will need to be organized to ensure that you will receive the title before completing the transaction.
When money changes hands, you should have the title in your hand in this case. Sellers that are promising to deliver the title in a few weeks is a red flag. You should walk away from the deal.
Estate Sale
Sometimes assets of a person who has passed away must be handled. In many cases, there are estate sales. However, a vehicle sale with an estate sale must be handled correctly, especially with the car title.
The estate representative should have all the proper documents to make obtaining the title as easy as possible.
If you only get a bill of sale, that is incomplete. You will need to request ALL of the information required in order to obtain a duplicate title or they should be able to guarantee that you will be able to register that car and get a new title in your name.
When is it OK to buy a vehicle without a Car Title?
Disclaimer: Buying and selling a car without a title is deemed illegal in most states. However, if you are a car enthusiast looking for cheap parts or a track car, buying a car without a title might be a good option.
Remember, you won't be able to register the car or drive on public roads. Thus no license plates, no registration.
The Legal Risks of Buying a Car without Title
If you're thinking of buying a car without a title, be aware of the legal risks. Buying a car without a title is illegal in most states, and can lead to fines and possible jail time. If you're caught breaking the law, you'll likely owe money to the seller as well as the finance company that actually owns the rights to the vehicle. You may also have to pay back any money you've borrowed to buy the car.
If you don't have the title to your car, you're at risk of being sued if the car is damaged or stolen. Not having the title also makes it impossible to get insurance and financing for the car.
Risk #1: Stolen Car
If you buy a car without a title, you run the risk of buying a stolen car. Please avoid buying stolen cars. In addition, if you buy a car without a title and it's later found to be stolen, you may be held liable for any damages that occur as a result of the theft. You could also face criminal charges for owning a stolen car.
It's always best to err on the side of caution and only buy cars that have clear titles. This will help protect you from legal risks and help ensure that you're getting a legitimate vehicle.
Risk #2: Lien
When you buy a car from a dealership, the car has a clear title that shows it is not currently owned by anyone else. If you buy a car from a private seller, however, you may be taking on a greater legal risk. The seller may have borrowed money against the car or put a lien on it, meaning they still technically own the car and could take it back if they don't get their money back.
If you're buying a car from someone who doesn't have the title, ask them to provide proof that they are the legal owner of the vehicle. This could be in the form of a bill of sale, an agreement between the buyer and seller, or even just written confirmation from the lender that they have released their interest in the car.
Despite these risks, you can proceed but I would ONLY suggest that if the car would NOT be used on public roads.
The good rule of thumb is that there are plenty of other cars WITH Titles that you can purchase. Spending the time to acquire a car to rebuild might not be worth it in the long run if the market value is not high enough.
Again, stick with cars that have proper titles.
What if I bought a car without a title?
You might be able to hire services like CarTitles.com to help get the process going. They provide assistance in securing a bonded title or Vermont title.
You are not fully out of luck but you still need to weigh the best options. I would suggest you check if there are any liens or loans on the car.
If so, you might be on the hook to surrender the car and you might be out of luck with your initial payment.