When you have a car loan, who holds the title?

I’ve been thinking about applying for a car loan and purchasing a new vehicle, but the process is a bit confusing. My mom explained how the car has a lien, but when you have a car loan, who holds the title?

The process of purchasing a new vehicle and applying for a car loan can certainly be confusing, and it was nice of your mother to help explain it. Building upon her explanation, the lienholder holds the title in 41 states while the borrower holds it in the other nine states.
The states where you hold the title are:
  • Kentucky
  • Maryland
  • Michigan
  • Minnesota
  • Missouri
  • Montana
  • New York
  • Oklahoma
  • Wisconsin
Your car title lists information about the vehicle, the primary driver or owner, and the lender or lienholder, but you don’t need the physical title to drive the car. Once you pay, the lender will return your title if you’re in one of the 41 states where the lender has it.
In the other nine states, you simply need to get a lienholder release form and retitle the loan.
Hopefully, this helps clarify the process!
Once you purchase a new vehicle, you can avoid any confusion surrounding car insurance by using Jerry, an insurance comparison app that shops for low prices with over 50 different insurance companies for free.
Jack Walsh
Answered on Nov 30, 2021
Jack is an insurance specialist and writer living in Buffalo, New York. He has a BA from Union College and worked as an insurance agent with Jerry before joining our content team. He enjoys using data and research to break down complex subjects and convey a story. In his spare time, Jack enjoys cycling, cooking, and exploring Buffalo’s beautiful waterfront.

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