Do you know what a car title is? Or what makes it so important? If you don’t, find out here what a car title is, along with the different types of car titles, how to transfer a car title, and what to do if you’ve misplaced your car’s title.

What is a car title? Are there different types of titles?

First things first, let’s talk about what a title actually is. For the unfamiliar, a car title is a legal document that establishes ownership of a vehicle. According to Kelley Blue Book, they are issued by the state where the car, truck, or SUV is purchased. It then accompanies the vehicle throughout its entire lifespan. Kelley Blue Book added that a car’s title is reissued each time it is sold or moved to a new state of residence.

It’s important to understand that there are different types of titles. In fact, according to Car and Driver, some of the most common types of car titles include clear titles, salvage titles, junk titles, and rebuilt titles. Let’s break down what they mean:

• Clear title: This type of title is pretty simple. It will state that the vehicle has no outstanding loans and is considered the best type of vehicle title.
• Salvage title: A salvage title, on the other hand, could mean bad news. In fact, according to Car and Driver, this type of title is issued to vehicles with a significant decrease in value after a substantial accident, repair, or theft.
• Junk title: Meanwhile, a junk title is for vehicles that have been sold to a junkyard. More often than not, vehicles with junk titles are sold for scrap metal or parts.
• Rebuilt title: Insurance companies or collision centers often issue rebuilt titles after a vehicle has undergone significant repairs. A rebuilt title signifies that the vehicle is safe to drive.

Can you transfer a title?

Yes, you can transfer a car title. Transferring it is a pretty straightforward process too. First, the current owner of the vehicle must sign the title. Then, Nerd Wallet reports, the buyer of the vehicle must take the signed title to their local DMV. At that point, the state will issue both a new registration and a new title. Keep in mind that some states might also require a bill of sale to issue an updated title, Nerd Wallet reports.

You may be asking yourself if you can transfer a title without actually selling the vehicle first. In many cases, this question arises when gifting a car to a lucky family member or close friend. As it turns out, however, the process is the same. Family, close friend, or not, to transfer a car’s title, you will have to sign it, and the recipient of the vehicle will have to make the trek to their local DMV.

The best place to keep your title isn’t in your vehicle

Now that you have a good understanding of what a title is, let’s talk about the best place to keep your car’s title. While you might think that keeping it in the vehicle itself is a good idea, that’s not true. In fact, keeping the title in your vehicle could be one of the worst places to keep it.

Say someone breaks into your car and gets a hold of your car’s title. That document is loaded with personal information, including your home address. And, let’s be honest, your home address is not the type of information that you want to get into the hands of car thieves.

The good news is that there are better places to keep it. Because car titles aren’t needed during traffic stops, it doesn’t need to be kept in your vehicle. With that in mind, CarFax recommends keeping your vehicle’s title stocked away in a home safe or a safety deposit box.

What to do if you lose your car’s title

You don’t want to lose your car’s title. But if you do? It is possible to get a replacement, reports Road and Track. The process is relatively straightforward too. To get a replacement, begin by visiting your local DMV. There, you will have to provide proof of ownership of the car. You’ll more than likely have to pay a fee for a replacement title too.

Understanding what a car title is is just one of the many important aspects of owning a car. Be sure to keep it in a safe place and, remember, while replacing a car title is a fairly simple process, you probably don’t want to have to do it.