What's the difference between a car title and car registration?

What is a car title and why is it important?

A car title is a document stating that you're the legal owner of a particular vehicle. Typically issued by your state's department of motor vehicles, a car title includes information about you and your vehicle, including the vehicle identification number (VIN) and the vehicle’s make, model, year, color, and mileage. The title also has your name and address, the issue date, plus signatures from you, the seller, and a state official. Having the vehicle title in your name enables you to legally sell the vehicle and more easily register the vehicle for use.

What's the process for getting a car title?

Obtaining the title from a previous owner often includes showing the local DMV office a bill of sale, proof of residency, a current odometer reading, and payments of any sales taxes and fees.

Whether buying a used car from a private party, a new car from a dealership, or paying off a loan on a vehicle you've been driving, make sure you get the title to the vehicle to prove ownership. Dropping a loan holder from a title in some states is a straightforward process.

What are the types of car titles?

There are more than a dozen different car title types. The most common types are "clear" (no loans or liens against them), "lienholder" (you're financing a car and the lender is listed on the title), and "electronic" (in states moving to paperless title systems). Other less common types are used for importing and exporting vehicles, manufacturing and sales, and cars that are not in normal working order.

Can you change the type of title on your car?

In some cases, yes. Once you pay off your vehicle loan, you can change your title from a lienholder title to a clean title at your local DMV. If you're able to find the documents you need to prove vehicle ownership, you can also change an affidavit or bonded title to a clean or lienholder title at your local DMV.

How do you transfer a car title?

The first step in transferring a car title involves signing the title over to the new owner. Depending on your state's requirements, you may need to complete a bill of sale. After completing the title transfer documents with the buyer and getting your signatures notarized, if necessary, the buyer can submit the applicable paperwork to the DMV.

What is a vehicle registration, and why is it important?

A vehicle registration officially certifies that a vehicle can be driven on public roads and connects a vehicle to both a state and an owner. Each state requires vehicles to be registered with the appropriate government agency, which then issues a vehicle registration certificate that shows who's responsible for the vehicle and signifies that it's legal to drive. The vehicle registration certificate shows that the state has cleared the vehicle for use, and the registration certificate is proof of the state's acceptance. Driving an unregistered vehicle or one with a lapsed registration is against the law.

Is vehicle registration the same as tags on a car?

No. The sticker tags on your windshield or license plate indicate that your vehicle has an active vehicle registration, whereas your actual registration certificate shows you're the registered owner of the vehicle. Your license plate shows that you can drive the vehicle legally on public roads.

Who can register a car?

The vehicle owner, as shown on the vehicle title, can register a vehicle. In the case of a leased car, a dealership can own the car's title and then register it in the name of the person paying the lease. Often a state requires proof of ownership — or a contract with the owner — to register a vehicle.

Do you need a title or registration to get auto insurance?

Some insurance companies may allow you to insure a car you don't own, but not all states allow it.

Many states require proof of insurance to register a vehicle. Find out more about car insurance and registration.