You may know that a car title is a legal document, issued by the state, that acts as a certificate of legal ownership, but you may not have realized how many types of car titles there are. Understanding the different types of car titles may be important to you as a current (or future) car owner in case you ever run into a car title you aren’t as familiar with.
Different types of car titles
There are several different types of car titles, but they can be broadly distinguished into three types based on what they indicate specifically:
- The vehicle’s ownership status: These titles are used to indicate the legal ownership of the car, and to potentially indicate the car’s previous ownership history.
- Condition of the vehicle: These kinds of titles are typically used as a determination of a vehicle’s roadworthy condition and legal ability to be operated on the road.
- Manufacturer titles: These titles are typically used by vehicle manufacturers to verify information such as the make, model and VIN number of a vehicle or to legally clear a vehicle to be exported or imported.
Separating titles into three categories (and subcategories you’ll see below) is helpful simply due to the volume of legal scenarios a car may go through over its lifespan. A single vehicle may be exported for sale by a manufacturer, financed through a lender and then passed through several owners before it hits the end of its road — and each step may require its own unique type of car title. With so many situations at play, knowing if a title indicates ownership status, condition of the vehicle or manufacturer-related status may be helpful.
Car title examples
There are over a dozen types of car titles, and while you may not find yourself involved with a more obscure variety, like an odometer rollback title, it may still prove beneficial to have a basic understanding of different titles:
Ownership status titles
- Clear or “clean” title: This tends to be one of the most common title types and establishes that the car is fully owned by the person named in the title, with no known auto liens on it. In some states, the lender may physically retain the paper copy of the title until the lien is released. In others, the title status is recorded electronically.
- Bonded title: This title type may come into play when you don’t have the ownership documents for the vehicle. You may have lost them, or a previous owner may not have signed over the car title properly while selling. Instead, you may pay a bond or surety to your state’s Department of Motor Vehicles (DMV) to assert legal ownership of the car. This is needed in the event someone comes forward claiming the vehicle is theirs. After a set period has lapsed without claims against the vehicle (up to five years depending on where you live), the DMV will typically swap out your bonded title for a clear title.
- Affidavit title: This refers to a notarized, legal document provided by the seller of a piece of property that attests to the status of ownership and any potential legal issues tied to the property and themselves. This type of title is designed to protect a buyer from potential legal liability related to the property and seller. For example, an affidavit title will outline if there is a lien obligation tied to the vehicle that a seller may be required to satisfy before making the sale.
- Memorandum title: This sometimes indicates a temporary title, potentially issued by state DMVs when a car moves across state lines, typically during an out-of-state sale. They’re also issued in most states to buyers who have financed a car and carry an outstanding loan (i.e., a lien) on the vehicle. In this case, once the loan is paid in full, the buyer may replace the memorandum title with a clear title and gain full legal ownership of the vehicle. Usage may differ from state to state, as does the process for converting a temporary memorandum title to a permanent one.
Condition of car titles
- Salvage title: Insurance companies typically assign a salvage title to a car they consider totaled from an insurance perspective. If a car has a salvage title, it’s typically not allowed to drive on public roads.
- Rebuilt or reconstructed title: A salvage car that’s been rebuilt, repaired or otherwise restored to working condition may be given a rebuilt title if it passes state-mandated inspections to be considered roadworthy again.
- Parts-only title: This type of car title is often a sub-designation of a salvage title, indicating that the vehicle cannot be rebuilt, and that the car must only be sold for parts.
- Dismantled title: This indicates a car where a key component is missing (or was missing), leaving it inoperative. Dismantled titles are sometimes used as a catch-all to designate that the vehicle has been deemed permanently unroadworthy.
- Junk title: This title is given to a vehicle that’s deemed unsafe for driving on public roads (due to age or condition) and not to be repaired. Junk titles differ from dismantled titles because junk cars may still have all their parts, but be deemed unroadworthy for other reasons.
- Owner-retained title: These are similar to salvage titles as both are issued to a vehicle that an insurance company has declared to be a total loss. However, owner-retained titles may be issued if the vehicle is still drivable (unlike salvage titles), and the owner has chosen not to make any repairs to the vehicle. A vehicle with an owner-retained title maintains an active registration and can be legally permitted to be on the road.
- Flood or water damage title: This designation may be added to a car’s title if it incurs significant water damage.
- Lemon title: These are determined by lemon law and assigned to a vehicle that was recalled to the dealership or manufacturer on multiple occasions for a defect that was unable to be satisfactorily fixed.
- Odometer rollback title: These may be used when evidence of odometer tampering is found.
- Certificate of destruction title: When an insurance company pays the claim for a damaged vehicle, they also assume the rightful ownership over the car. At this point, they may issue a certificate of destruction, indicating that the vehicle will never be registered for use on a public road again and is scheduled for destruction.
- Certificate of origin (CO): Sometimes known as a manufacturer’s statement of origin, this certifies the vehicle’s original ownership. The CO may be required by the DMV during the titling of a new car.
- Export/import titles: These titles are typically needed for customs clearance to transport cars for sale across borders.
Car title types: More things to know
Besides learning the types of car titles available, there are some terms surrounding car titles you may not be aware of, like:
- Pink slips: Not to be confused with receiving a pink slip at work, car titles are colloquially referred to as pink slips because of the color of paper they were traditionally printed on in many states.
- Car title colors: Some states use different colors to denote different title statuses, though color coding conventions can vary greatly between different states. For instance, blue titles are commonly associated with salvage status in many states, but in Texas they indicate a clear title instead. Understanding your state's title laws and conventions may help prevent any possible confusion.
- Electronic Liens and Titles (ELT): Many states are moving toward, or already offering, an electric system (typically called an ELT system) to track titles and liens. If you’re buying a used car, these systems may help make it easier for you to check for things like a potential lien on a vehicle.
As you see, there are several types of car titles, covering a wide range of scenarios that you may or may not encounter personally. Nonetheless, it may prove useful to understand the basics on different types of car titles, just in case you do run into one of the car title examples above.