Insurance And Title Loans
Your title loan lender will ask for proof of insurance on your car when you apply for a title loan. You have the right to get insurance from any insurance provider you choose.
Lenders do this to make sure they are paid back for the loan if your car is in an accident or stolen.
In some provinces and territories, its your responsibility to let your insurance company know anytime a lien is registered on your car. If you dont do this and your car is in an accident or stolen, your insurance company may deny your claim. This means that you would be responsible for paying the remaining cost of your title loan yourself and may no longer have your car.
Check with your insurance company before you get a title loan.
Security Interests Or Liens
The next thing to look for on a certificate of title is whether there are any security interests or liens on the vehicle. When banks loan people money to purchase a vehicle, the bankâs name is listed on the certificate of title as a âsecured party.â If there is still a security interest on a certificate of title for a vehicle that you are considering purchasing, ask the seller to obtain a lien release and order a duplicate title, free and clear of the security interest.
- In order to release the lien and remove the bankâs name from the certificate of title, you must have an original lien release document from the bank, or have the bank sign the original certificate of title.
- Sometimes, the bank listed as a secured party is no longer in business, or will not respond to requests about the loan. If a loan is more than seven years old, you can send a certified letter to the bank asking it for a lien release. If the bank does not respond, you may be able to have the lien released by providing Minnesota Department of Public Safety with the certified mail documents showing that the letter was returned to the sender.
Before Refinancing Make Sure Your Registration Is Good To Go
In order to complete any title process whether you are buying, selling, or refinancing your car the vehicles registration must be in good standing. The most common reasons why a registration would not be in good standing are:
- Toll violations
- Parking tickets
- Unpaid taxes
Any registration issues associated with your car can severely delay the title process. In turn, this can delay the final completion of your auto refinance loan.
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Why It Is Important To Transfer A Car Title Properly
Transferring the car title as soon as you make the purchase is one of the most important things to do when you buy a car. Waiting or failing to do so can lead to all kinds of problems, so heres why its important to transfer the title properly.
- You want your name on the title If you paid for your car, you want your name on the title, its as simple as that. Your vehicle is your asset, and you want it legally recognized as such.
- You may have to pay a fine If you don’t transfer the ownership of a vehicle within the first 30 days, there is a fee of $25, and $25 each month after that in which you fail to legally transfer ownership.
- If you wait, the previous owner may become unavailable People often wait to transfer the title, and this can be a big mistake. Unexpected things can happen, and if the previous owner didnt give you a bill of sale and perhaps gets deployed overseas, incarcerated, or even just disappears, then you are going to have a real problem and you may be unable to transfer the title.
- You may be held accountable for the previous owner’s legal troubles If you don’t transfer the title, you don’t yet legally own your vehicle. If the previous owner owed money or had some legal troubles, you could possibly face repercussions, like potentially getting your car repossessed. In order to avoid lengthy and often unpleasant discussions, just make sure to transfer the title immediately after purchasing a vehicle.
What Is A Car Title
One of the most complicated, critical, and lesser-known portions of the auto refinance process is titling.
Titles are legal documents declaring either a person or a lien holder as the legal owner of a vehicle. If you are purchasing your vehicle outright , you are the new owner and, therefore, the title holder. However, if you finance your vehicle purchase, the bank actually owns your car until that debt is paid off, usually making the bank a lien holder.
In some states, the vehicle title will be issued to your lien holder until the lien is fully paid off. In other states, car titles are issued to the registered owner/operator regardless of the presence of a lien.
In order to process your vehicles title transfer, you will usually need to provide a few pieces of documentation including:
- A bill of sale
- Proof of insurance
- Proof of residency
You may also need to pay sales tax on your new vehicle at this time, along with any state title fees.
When purchasing a new car, dealerships will typically handle the titling process for you. When refinancing a car loan, you get a new loan with a new lender. This requires an adjustment to the vehicle title document to reflect that change. The lien holder changes from your original lender to your new refinance lender.
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Obtaining A Bonded Title
In many states, if a title cannot be located, a bonded title can be obtained instead. A bonded title is a way of proving that you are invested in owning the car and are willing to take the time and pay the money to obtain a surety bond to prove ownership. To obtain a bonded title, you must first check with the DMV to see if there are any liens against the car.
Next, find a surety bond company to find out what you need to get a lost title bond in your state. Then get a vehicle valuation performed so you and the bond company will know how much the bond should be for. At this point, you will need to purchase the title bond, which you can then use to register the vehicle. Read More:What is a Bonded Title?
Which Comes First: Car Title Or Registration
Generally, the vehicles title will need to be filed before registration can be completed. This really depends on your state, though.
Since a vehicles title demonstrates ownership, it is arguably the most important of the two. Whether you are buying a car in cash or purchasing one with the help of an auto loan, ensuring that ownership has been transferred is imperative.
As we already touched on, many states will require you to show proof of ownership before you are able to register the vehicle as well. And if you have just recently purchased the car, you may be able to take care of both your title and your states registration at the same time.
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How To Retitle Your Vehicle After You Paid Off The Loan
When you buy a car and use a car loan to pay for the purchase, the lender becomes a lien holder on the title and, in most cases, the bank that made the loan keeps the title until the car loan is paid off. When you pay off the loan, the bank will send you the title, but the lien holder could still be listed on the paperwork. Each state has its own rules concerning car titles.
Generally speaking, you should be able to go to your nearest DMV in order to fill out the necessary paperwork to ensure that the title department knows you have satisfied the conditions of your loan or lien.
Sell Through An Auto Dealer
The easiest way to sell a vehicle with a lien is to conduct the sale at an auto dealership, particularly if the car is going to be a trade-in. Dealers work directly with the lien holder listed on the title, which is usually a or a bank, to facilitate the transfer of ownership.
In this process, the dealer arranges for the full payment of the loan balance by using either the proceeds from the vehicle to be traded in or by adding the payoff amount to the loan being used to buy the new car.
The biggest disadvantage of going through a dealership to sell a car with a lien on the title is that the amount paid for trade-in vehicles is usually less than what can be realized by selling it privately. The process of selling to a private buyer, however, also requires some extra work by the seller. To start, the seller should contact the lender to determine the total amount required to pay off the loan, including any additional fees, to satisfy the debt and remove the lien holder from the title.
Make sure you consult a resource for the value of your car, such as the Kelley Blue Book, before you visit a dealer.
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Does Registering My Vehicle Mean I Own It
Though car registration and titling usually go hand-in-hand, they dont mean the same thing. Just because you have registered a vehicle doesnt necessarily mean you own it it just means that you have paid your states required taxes and fees and accepted responsibility for that vehicles operation on public roads.
A vehicle can be registered by a driver even if that car is technically owned to another person, a dealership , or a lien holder . However, most states will require you to show proof of ownership or a contract before allowing you to register the vehicle in that state.
Paper Title Lien Releases In California
A lienholder using a paper title in California must sign on line 2 of the certificate of title for the lien release. Once you get the signed certificate of title, check your address. If you changed your address and didn’t update it with the DMV, draw a line through your old address on the title. Write your new address next to it clearly and legibly. Send the signed certificate of title and a transfer fee to the DMV. The DMV removes the lienholder’s name and issues a new certificate of title and registration card showing you as the sole owner.
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What Youre Entitled To Know Before Taking Out A Title Loan
When you get a title loan, you have the right to receive specific information in your contract documents.
The lender must provide the following:
- the total cost of your loan
- the amount and timing of payments
- the annual percentage rate
- the option to pay, in part or full, before the due date of your loan, without paying any additional fees
- a description of your car
In some provinces and territories the lender may include more information in the title loan contract.
What About Selling My Vehicle
If you sell a vehicle to a private party, it is important to make sure that the vehicle is properly transferred to the buyer. It is a good idea to meet the buyer at a local deputy registrarâs office and ask the staff at the deputy registrarâs office to assist you with the transfer of title. That way, you can be sure that the title is properly signed, and the purchaser pays the required sales tax and other registration fees. If the person who buys your vehicle does not transfer title and registration of your old vehicle into their name, you may receive demands for payment of that personâs parking tickets or tollway violations. You could even get sued if the vehicle is involved in an accident before the title is transferred to the new owner. To help avoid some of these issues, you may want to consider removing and keeping the license plates when you sell your car.
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How To Transfer A Car Title
Every state has its own rules concerning car titles. Your life will probably be much easier, in the long run, to keep up with changes as they happen. That means getting an updated title when relocating to a new state or when the vehicle changes hands. Thats true even when the vehicle moves from one family member to another.
Beware These Pitfalls When Getting A Car Title
Check to make sure all the information shown on the certificate of title is accurate when you get a title for a new vehicle. The year, make and model should match that of the vehicle youre actually getting.
If your car title is coming from a private-party seller, make sure the seller has completed the titles transfer of ownership section .
Pro tip: In some states, using correction fluid or an eraser on the transfer of ownership section automatically voids the document, so make sure to keep it clean when taking possession of the document.
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Hurdle #: The Bank Delivers The Title To The Current Owner Only
The second slight hurdle to overcome is the lender has a business relationship with the person who is selling you the car. That person is the bank’s customer. The bank will never send you, the buyer of that car, the title directly. Even if you provide the check to the lender to pay off the car, the lender still won’t send the title to you, only the borrower, because you are not the borrower in this loan.
Once the loan on the used car is paid off and the bank is then satisfied, about a week later they send the clear title to their customer free of liens, with “Lien Satisfied” stamped on the front of the title. Now the seller legally owns their car without encumbrances.
There might still be cases where the lender is still listed as lienholder, but if you have the title in your hand, It’s because the title is clear of liens, you can confirm with the lender, but it should be clear.
Our consumer advocate team has successfully negotiated these waters when helping used car sellers list their used cars for sale online with an outstanding loan balance. We have developed these outline steps below and they stood the test of time. Before you pay off a car loan with a lump sum payment, you need to call the lender and obtain a “payoff figure” from them which is good usually for 10 days.
What To Do If You Can’t Find The Lienholder
If your financial institution or lender merged with another lending institution, changed its name, moved, or went out of business, you might have trouble finding the lienholder. Locating and communicating with the lienholder is pivotal for the transfer of title. For help in finding an institutional lender to get a lien release in California, check the Financial Institution Listing section on the state’s DMV website.
In New York, check for a lienholder’s name and address online at the DMV website. Look for the “Registration/Check a Title or Lien Status” page. You need the Vehicle Identification Number , and the vehicle make, model, and year.
Making the final payment on your auto loan is a milestone. Knowing how to get a title after paying off a car loan enables you to complete the process of buying a motor vehicle. You can now drive with confidence knowing that your new car is all yours. Keep this process in mind if you ended up desiring to sell your vehicle once it is paid off. The same process is valid and followed by the transfer of title from your name to the new buyer’s name.
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Summary Of Steps To Take To Ensure A Smooth Used Car Title Transfer
Here’s a summary of our steps for you to take when buying a used car with an outstanding loan balance:
This should be smooth sailing for you. Good luck out there!
Re: How To Legally Drive A Vehicle While Waiting For Title To Transfer
Eh? I’ve never heard of a bank taking 4 weeks to enter a lien. That’s the reason why the Virginia DMV doesn’t have a procedure for this. In fact, I don’t know of any banks that will is fork over the cash without the executed title in had.If you buy from a dealer, you can get 30 day tags from them. From a private individual, you’re pretty much screwed.
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A Car Title Proves That Youre The Cars Legal Owner So Youll Need To Know How To Get It After Purchasing A Car
If youre making a cash purchase at a dealership, the dealer will usually send your title paperwork to your local Department of Motor Vehicles, or state transportation or revenue agency. The DMV or agency will send you the official certificate of title once the paperwork has been processed.
In this article, well take a closer look at how to get a car title and clue you in to some pitfalls to avoid during the process.