You have found the perfect car and you are ready to buy it. You’ve meet with the seller, negotiated for a reasonable price and now you are ready to drive it home. However, as you are about to write the check, the seller tells you he doesn’t have the title. While it’s possible to buy a car without a title, it should be done so with caution.
A title shows proof of ownership and without it, you run the chance of an invalid sale. But if you’re willing to put in some time, there are still ways to safely purchase the car. In this article, Part 1 explains how to get a replacement title, Part 2 describes how to deal with a lienholder, Part 3 shows how to check the car isn’t stolen, and Part 4 suggests you consider a surety title bond.
Part 1 of 4: Order a replacement title
If the seller has registered the car in the past, he may be able to get a replacement title through the DMV. Every state has its own set of requirements, but at a minimum the seller will have to provide his personal contact information, proof of identity, and the car’s VIN (vehicle identification number).
It can take up to two weeks for the seller to receive the replacement title, so you will have to wait until he has it in his possession to complete the sale.
Part 2 of 4: Dealing with a lienholder
Sometimes a seller does not have the title because he still owes money on the car. This does not mean it cannot be sold. It just means the lienholder has to be paid first before you can purchase the car.
If the seller does not have the money to pay it off and if you are buying it for at or more than is owed, it can be arranged that the lienholder get paid their part, the seller their portion, and the title transferred to you through an escrow company. Make sure there are not additional fees associated with the transaction and if there is, have the seller pay for it.
Part 3 of 4: Make sure the car is not stolen
If the car is stolen, it may be registered with the National Insurance Crime Bureau. You can go to the NICB to do a free VIN check. If the car has be reported as stolen and not recovered or as a salvage vehicle, it will probably be listed here. If you want additional details on the car, you can go VinAudit to see if there is more information available.
However, this information is not free and there is a charge to get the report. If the car is listed as stolen, do not buy it. If the rightful owner claims it, you will be out all of your money with no recourse.
Part 4 of 4: Consider a surety title bond
If you are determined to drive away with a car without a title, you might want to consider a surety title bond. The bond declares that the car is yours and allows you to get a new title, but in the case there is a conflict or any penalties that arise later, the bond is covered. You will have to pay a portion of the bond, which is predetermined at the time of the transaction.
Also, you will be required to do a title search, lien search, have the car inspected and have a mechanic clear it for damages and repair. You can negotiate with the seller, to see if he will lower the purchase price to reflect your extra costs.
It is not the ideal situation to buy a car without a title, but it can be done. The most important thing to do is not rush into the sale. Be patient and do the research needed. It can be as simple as waiting for a replacement title or dealing with a lien or more consuming with research involved or securing a bond, but all these things take time. As the saying goes, it is better to be safe than sorry.