There are many common misperceptions about used car titles. Typically, people assume they must have the title if they want to sell it. (Some may even wonder if it's possible to sell a junk car without the title.) While it's true that not having a title can be a red flag to many buyers, oftentimes, there's a perfectly logical explanation as to why it's missing. Perhaps someone abandoned the vehicle on the current owner's property, or the original title was lost or stolen.
In many cases, it is illegal to attempt to sell a car without a title. However, as long as the reason for the lack of a title is legitimate, you will still be able to sell your vehicle.
What Is The Title, and Why Is It Important?
A title, or pink slip, is the legal document proving a vehicle's ownership. The Department of Motor Vehicles (DMV) is in charge of issuing titles to car owners, and it is up to sellers to issue the title to any new car buyers.
There are four types of car titles:
- A clean title: the vehicle has never been involved in an accident that ended with the insurance company declaring the car a total loss
- A clear title: the vehicle is owned free and clear, with no debt attached
- A salvage title: the car has been involved in an accident in which it was declared a total loss by the insurance company
- A rebuilt or reconstituted title: the vehicle was once salvaged but was rebuilt and is road-worthy again
Each title provides information such as the vehicle make and model, vehicle identification number (VIN), color, mileage, license plate number, and the owner's name and current address.
There is also another type of title called a “bonded” title. If you bought a car that doesn't have a title and are attempting to sell it, a bonded title would let the buyer know that the title comes with the label of “lost title bond.” This type of title protects both you and the previous owners if questions about the legitimacy of the vehicle ownership arise.
Usually, the dealership will give you the car's title at purchase. However, if you are selling a used car, it is up to you to provide the buyer with proof of ownership. Providing the title proves that the vehicle is not stolen and you have the right to sell it.
In most states, buyers need a certificate of title to complete the title transfer. The certificate of title establishes the buyer as the new owner with the transfer of ownership.
What if You Never Registered The Car?
If your car has never gotten a title, you'll want to have the original sales documentation handy. What exact documentation you will need varies from state to state. Some states require additional documentation proving ownership.
Cars that are 15 years or older are exempt from title ownership. All that is required is the bill of sale.
What if You Want To Sell a Car With a Title From a Different State?
In some states, you need more than a bill of sale to prove ownership. You should always check with your local DMV to ensure you follow the proper procedures. You may also be required to provide a notice of sale, which will act as a transaction receipt.
Sometimes, you may need more than the transaction receipt for proof of ownership, but it will be helpful for the licensing and registration process.
What Are The Selling Options?
There are a few selling options when attempting to sell a car with no title.
- A private buyer
- A junkyard
- Local dealerships (restrictions may apply)
- Salvage dealers
Step One: Request a Replacement Title
If the vehicle's title is damaged, lost, or stolen, you can contact your local DMV and request a new one.
The DMV website will also have information on how much a replacement title will cost. If you possess the title and any information has changed, you need to replace it.
If you own your vehicle free and clear, you only need to contact the DMV for the replacement title. However, if you are still paying a lender for the car, you will need to contact them for a copy.
You must also consider processing time when applying for a replacement title. Depending on your state, you can obtain an electronic copy of your title and print it out immediately. However, some states still use the traditional method of mailing the title, and processing can take weeks. Some states also require holding the title for 30 days before selling the vehicle.
Step Two: Explore Local Exemptions or Other Titling Options
Some states offer alternative ways to title a vehicle if it is abandoned. In some places, you can file a mechanic's lien for any unpaid maintenance bills stacked against the car.
You also have the option to apply for an abandoned vehicle title. The state will use the VIN of the vehicle and attempt to get into contact with the previous owner of the car and give them the opportunity for the right of first refusal.
The applicant can title or sell the vehicle if the owner does not reply within a specific time frame.
Some states will not title a car that is 15 years or older. Instead, they may offer a bill of sale form, allowing the new owner to register the vehicle. Online templates are available if your state does not provide a bill of sale form.
You can also do a transfer of ownership. If you decide to go this route, you must apply for a title and have a legitimate inspection done on the vehicle.
Step Three: Have Your Bill of Sale Notarized
It is also a good idea to have the bill of sale notarized. Notarizing the bill will give the new buyer a sense of security that the information provided about the vehicle is legitimate.
Step Four: Explore Alternative Selling Options
Sometimes, selling your used vehicle to another individual isn't possible. If you come to this conclusion, you can always attempt to sell it as a salvage car. Salvage yards may buy your vehicle from you if you provide proof of ownership.
Selling to a salvage yard means bypassing the photos and online advertising you would have to do to sell the vehicle somewhere, such as Facebook Marketplace or Craigslist.
Be aware that if you want to sell your car to a salvage yard, it cannot have a lien on the title; you should completely pay off the car.
There are also individuals who buy and flip cars for profit as a side job, similar to flipping houses. They are often much more accommodating than a regular buyer of title issues or damage.
Is Selling a Car to The Junkyard Worth The Money?
Old cars or cars with noticeable damage usually won't sell for much, but if you decide to sell it to a junkyard, you might make more than if you attempted to sell it to an individual.
Realistically, you can expect to get anywhere from $250 to $500 for a beat-up car. The value of the vehicle is contingent upon a few factors:
- The location of the car (this applies if the vehicle needs to be towed)
- If there is any significant damage from the car being involved in a flood, fire, or major accident
- Whether or not the vehicle is missing any essential components, such as the transmission, catalytic converter, or engine
- The year, make, and model of the car
To maximize the profit on the car, consider selling some of the parts on your own before selling the vehicle to the junkyard. Selling just five or six parts for a quick $100 each can earn more than selling the entire car.
Step Five: Be Honest With Potential Buyers
If you cannot obtain a title for the vehicle, which could happen with older project cars, be upfront and honest with any potential buyers that you cannot provide proper documentation.
If the buyer is willing to take over your car payments, you may be able to strike a deal with your lender and get them to release the title and transfer the loan.
Step Six: Keep Copies of All Documentation
Even after you have sold your vehicle, keep copies of all the documentation you provided at the time of the sale. The new owner may decide not to title the car, in which case you want to protect yourself from any liability that could fall on you if anything goes wrong with the vehicle.
Additionally, if the car is abandoned, lost, or stolen in the future and someone contacts you about it, you will have all the documentation to provide to the inquirer.
Step Seven: Make Sure To Notify Your State of The Sale
After you've sold your vehicle, you need to make sure the state in which it is titled is aware that you sold it. As soon as you sign the bill of sale, you must notify the DMV.
Notifying the state of the sale will ensure you avoid surprise taxes or fees later on.
Step Eight: Register The Vehicle in The State of Vermont
For vehicles that are 15 years or older, you can register them in the state of Vermont with no title. If you provide the state with the bill of sale and all fees required to register the vehicle, you will be able to register it there.
Vermont only requires registration as proof of ownership of a vehicle 15 years or older, so the documentation will count as proof of ownership in the other 49 states. The bill of sale does not need to be notarized and can be typed or handwritten.
You only need the buyer and seller details, the purchase date and price, and the VIN. Keep in mind that this process only applies to vehicles that are 15 years or older. If you have a newer car, this process will not work.
Selling Your Junk Car Without Title Doesn't Have To Be Complicated
While there are many things to consider when selling your junk car, it's often easier than people imagine, even if you don't have a title. By following a few simple steps, you can often rehabilitate your title.
As a last resort, as long as you can prove ownership, local salvage yards constantly post junk car advertisements, whether on billboards or Google search results. Selling to them allows you to make a few hundred dollars on an otherwise worthless car, which in the end, is a pretty good deal.
This article was produced by Wealth of Geeks.