A car title is proof of one’s ownership of the vehicle. That is why one should never entertain the idea of buying a car without a title. It is a risky move. Someone who has a valid title can take the car you bought outright. However, there will always be instances when buying an automobile without a title is necessary. In such cases, you will have to take extra measures to minimize the risks. Here is how you can buy a car with no title.
Perform a Very Exhaustive Research
There are a few valid reasons why a seller may not have the title to a vehicle. It is possible that the original document was misplaced, mutilated, or stolen. A number of vintage cars are also quite difficult to register and obtain a title. The previous owners of the car did not also have the title to the vehicle. As there are valid reasons, there can also be illegal reasons. One such reason is that the vehicle is stolen. It is for this reason that you have to perform an exhaustive research on the vehicle you wish to buy.
You can use online resources to obtain a vehicle history report. AutoCheck and Carfax are reputable sites that can give you the legal status of the car. They can provide substantial information. These can include the title status of the car and its odometer reading. The report can also include any insurance claims or history of accidents. Use these bits of information to compare with what the seller is telling you. If there is any inconsistency between what the seller says and the VHR information, it is best to walk away.
Can you buy a car without a title? Yes, you can. However, you should also check with the Department of Motor Vehicle in your state. Obtain the Vehicle Identification Number (VIN) from the seller and use this in your DMV transaction. You can request for the vehicle’s history. You can also confirm the legal status of the car. Do take note, however, that the DMV may not be able to answer all of your questions because of issues of confidentiality and privacy.
The National Insurance Crime Bureau can also be a helpful resource in determining the status of a car with no title. Use the VIN of the vehicle to check if there are any reports of unrecovered stolen vehicles on the car.
Any red flag you see in your exhaustive research should already warrant the cancellation of the plan to buy an untitled vehicle.
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Execute a Bill of Sale
It is always wise to execute a bill of sale, even if there are no red flags in the history and title status of the vehicle. It is also one of the most important documents that you will need to register the vehicle in your name. This also addresses the question, ‘can you register a car without a title?’
Obtain all the necessary vehicle and seller information when drafting the bill of sale. Make sure to specify the Vehicle Identification Number and the mileage of the car. It is also critical to state the vehicle’s sale price. Include any terms that are relevant to the sale. For example, if the seller sells the vehicle on an as-is-where-is basis, then you should put this in the bill of sale, too. Also include terms like ‘seller to supply car title’ or other similar phrases. Spell out the inclusions and exclusions of the sale.
The bill of sale should also include the complete information of the transacting parties. You need to write the complete name, full address, and contact numbers of both the buyer and the seller. It would also help if you can obtain a photocopy of the seller’s valid identification card.
Make sure that both parties will agree to the terms of the bill of sale. Once you both agree, you can pay the seller the amount stated in the bill of sale. As much as possible, do not pay cash. What you want is to have proof of your payment. A bank draft or a check is much better. These payment methods can leave a paper trail for authorities to track in case there are issues with your car.
If the seller promises to furnish you with the title of the car at a later date, then it is best to place the money in an escrow account. The seller will not be able to get the money until he has furnished you with the car’s title. It is a safety net, giving you peace of mind about the transaction. It is also a way of proving that the vehicle is not stolen.
Ask the Seller to Furnish You with a Replacement Title
When buying a car without a title, it is best to ask the seller to furnish you with a replacement title. This works if the seller had registered the vehicle in his name in the past. In the US, vehicle owners have to renew their vehicle registration and insurance every year. If the seller owned the vehicle in the immediate 12 months prior to the sale, there is a good chance he registered it under his name. The seller can go to the DMV and request for a replacement car title.
The seller will have to fill out the appropriate form at the DMV. Different states have their own Duplicate Title Requests that have to be filled out. The seller has to make sure that he fills out the correct form. The application form will require the complete name of the seller. It also includes his complete address, the car’s VIN, the mileage on the car, and proof of the seller’s identity. The DMV may also ask for other information such as that of the lienholder’s.
It is important to fill out the form as completely and accurately as possible. Incomplete information can delay the processing of the replacement title. False information can lead to the denial of the request.
It may take a few days before the seller obtains the car’s Replacement Title. Once the document is in his hands, you can proceed with the purchase.
Track Down the Vehicle’s Title History
Can you buy a car without a title? Buying is not the issue. The real concern is in the confirmation of the ownership of the vehicle. One cannot go to the DMV and tell them to register the vehicle in his or her name without some proof of ownership. This is where tracking down the history of the vehicle’s registration can come in.
This requires plenty of legwork. If an exhaustive research allowed you to stay in your seat searching the internet, tracking down a car title history means you will have to go places.
Using the information on the Vehicle History Report, identify the state with which the car was last registered in. If it is in your own state, then your work should be easy. The real work happens if the car’s last registration entry is in another state.
It would be best to get in touch with the DMV of the state where the car was last registered. Explain to the DMV why you called them. Request for information, in a polite manner, about the car’s owner and how you can contact him or her.
Get in touch with the last registered owner or title holder of the car. Explain your reasons for the call. Politely request the last car title holder to request from the DMV a duplicate title. This should help you register the vehicle without any problems.
Acquire a Surety Bond
There are states that allow you to register a car with no title, as long as you obtain a Surety Bond. This is both a declaration and a financial security measure. It covers any financial penalties that may arise from the ownership of the vehicle.
Before you can proceed with obtaining a Surety Bond, it is important that the vehicle is free of any liens or encumbrances. The seller should clear this first. If the seller is not willing to clear the liens, then walk away from the transaction.
Contact a company that offers surety bonds in your state. Ask them about their requirements for issuing a Lost Title Surety Bond. In most cases, these include a proof of purchase, proof that the vehicle is not salvage or junk, and proof of your residency. It also includes an accurate valuation of the car. The car’s valuation will determine the amount of Surety Bond you can get. Most bond companies provide a Lost Title Bond that is equivalent to the car’s value. Others may provide you with a bond amount that is twice the car’s valuation.
Pay for the Lost Title Bond. This is often a fraction of the Bond worth. Use the Surety Bond in registering the vehicle under your name. The DMV will perform an inspection of your vehicle before you can have it licensed.
Buying a car without a title is risky. However, there are ways you can minimize such risk.
Sources:
- Buying A Car with No Title – What You Should Know – Surety Solutions
- Buying Cars Without a Title – What You Need to Know – Autolist
