You'll be glad to know that most vehicle sales go smoothly, but for purchasing from a private party, it never hurts to do your due diligence. If you're wondering about a car's title status, checking it will be simple enough: you just need the car's VIN (Vehicle Identification Number). Here's why and how you should go about doing it.
Understanding Title Statuses
A car's title status tells you whether there are liens against it that would prevent you from transferring the title to your name along with its accident and damage history. Here's an overview of the most common title brands.
A clear title is great news for you because it means there are no liens against the title. Any loans associated with the car are paid in full, the title is in the seller's name and it is ready to be transferred to the car's next owner.
A car with a rebuilt title has seen some damage to where the insurance company, repair shop, or mechanic has issued a rebuilt title. So much has been repaired, replaced, or restored on the car that it no longer has a clear title. These cars can generally be registered and driven just like any other vehicle, but they may be subject to an additional inspection.
A salvage title is generally bad news. A salvage title denotes that the car has been in a bad accident or been damaged in some other way (i.e., fire, flood, etc.) and the insurance company has declared it a "total loss." Cars with a salvage title are not legal to drive on public roads and they are worth far less than their market value.
Of course, just because a car has a salvage title doesn't mean it isn't worth purchasing. Insurance companies typically declare vehicles a total loss if the cost of repair meets or exceeds the car's market value. That means a totaled vehicle isn't necessarily beyond repair, the insurance company just knows it's more lucrative to payout than to pay to fix it.
If you buy a car with a salvage title, realize that you will need to perform any necessary repairs and pay for an inspection in order for the title to be cleared. Ideally, this is something the seller will do themselves.
Any car with a salvage title should be sold at a steep discount because, after all, there's no guarantee the title can be cleared until you get under the hood, examine the frame, and fix everything wrong with it. This could easily add up to thousands of dollars in costs, and you'll likely end up putting more money in than the car is worth.
Whether it's a salvage car that the owner no longer wanted or an old clunker that had a clean title but simply wasn't suited for the road anymore, cars often get a junk title when they are sold to the junkyard to be scrapped or parted out.
As with a salvage title, junk title cars cannot be driven on public roads. However, an expensive and complex process of reconstructing the vehicle and restoring it to its former glory (usually by putting in far more than the car is worth) could allow you to restore the car to a clear title status.
Why Perform a Title Status Check?
Worried that the car you're buying may not have a clear title? Title status tells you a lot more than whether the car has been damaged. Title status also reveals any loans or liens placed against it that may prevent you from registering the car.
If you perform a title status check and find that there are liens against the title, you will want to talk to the seller. They should have been upfront with you if they owe money on the car and, in fact, they can't sell it until those liens are paid in full.
It is entirely possible for someone to sell a car they still owe money on, so long as they plan to pay off the loan during the transfer process so that you get a clear title to register in your name. Ideally, they'll be upfront about this, too.
By all means, you should perform a title status check before you commit to buying any car because it can save you a great deal of hassle. If you find any status other than "clear," you'll want to talk to the seller because it should certainly impact the sales price and your overall decision on whether to proceed with the purchase.
How to Perform a Title Status Check
Performing a title status check is easy, all you'll need to do is reach out to the seller for the Vehicle Identification Number (VIN). This can often be found in the door jamb, under the hood somewhere, or near the front windshield. Some sellers will include the VIN number right in the listing.
Once you have the VIN, online services like CarFax and other vehicle history reports can reveal the title status and tell you about any reported insurance claims or damage involving the car. While they aren't guaranteed to have everything (especially if a repair was made that didn't go through insurance), they can give you peace of mind.
Find the Right Used Car
When done right, your used car can truly be a smart investment, but you may not know where to start. If you're searching high and low for the right used car, try PrivateAuto. In addition to our handy tools — like ready-to-sign state documents and advice for buying a car safely — PrivateAuto will help you track down a used car that's suited to your needs. Start your car search today.