You cannot drive a car without insurance and registration, and you cannot register or insure a car without a title. Although each state has its own variation on the process, it’s standard procedure to have the seller sign over the title document at the same time as the bill of sale. Yet with millions of used cars changing hands every year, it’s inevitable that at least some sellers will have lost the titles – and others will claim to have lost their titles when something more sinister has happened.
Research the Car
Researching a car’s vehicle identification number and other identifying information should generate a report of a car’s history, including accidents, thefts and other events. If the car was totaled in a wreck or damaged by water in a flood and an insurance company paid a claim on it, that claim likely is part of the car’s record. In addition, the record will show if the car was issued a salvage title, which usually indicates damage costing more than half the car’s value to repair. The report will also note whether the car has been reported stolen – another reason a seller might claim to have lost the title.
If your research discloses that the car has been issued a salvage title, or a reconditioned or rebuilt salvage title, this is a red flag that indicates the car was at some point seriously and potentially irreparably damaged. In many states, vehicles with salvage titles cannot be registered, insured, or driven on public roads. Some states permit the upgrading of a salvage title to rebuilt or reconditioned status if all necessary repairs are performed and the car passes a thorough safety inspection – a time-consuming and costly process. Cars with rebuilt or reconditioned salvage titles are said to be roadworthy. Unfortunately, there’s also a brisk trade in fraudulent rebuilt and reconditioned salvage titles. Unless you’re buying the car for parts, you’re probably better off avoiding one with any kind of salvage title.
If there are no adverse reports on the car and it appears that the title has legitimately been lost, the easiest way to replace it is for the registered owner to go to the motor vehicle bureau that issued the license plates and request a duplicate title. This generally takes some time, because the agency must research to ensure that the request is legitimate and that the car was not stolen or totaled. If the title’s legitimately been lost, it’s better to let the seller deal with the motor vehicle agency and complete your purchase when the title is secured. If time is an issue – for instance, if the seller is relocating or is in financial distress and needs the money – you may need to get a bonded title.
If it’s not possible for the seller to secure a duplicate title, it may be necessary to secure a bonded title for the car. A bonded title is like a probationary title that verifies your ownership of the vehicle. Your first step is to find an insurance company that will issue the bond, then swear out an affidavit that complies with your state’s and the insurance company’s requirements. At a minimum, this affidavit will declare that you own the vehicle because you purchased it or it was gifted to you and that you’ve tried unsuccessfully to get the original title. You then have the vehicle appraised and purchase the bond, which remains in effect for the state-mandated period of from one to three years. If nobody challenges your ownership during that time, you will be issued a regular title when the bond expires.
Dale Marshall began writing for Internet clients in 2009. He specializes in topics related to the areas in which he worked for more than three decades, including finance, insurance, labor relations and human resources. Marshall earned a Bachelor of Arts in communication from the University of Connecticut.