In the sale of a vehicle, a transfer of title changes legal ownership from the seller to the buyer. Titles, which are issued by the individual states, state the vehicle identification number as well as the year, make, and model. All parties involved in the transaction will find the process easier if the seller can provide a clean title.
Clean title is a general term for a legal document showing free-and-clear ownership. This means that any liens or legal claims against the vehicle have been cleared. When a car secures an auto loan, the lender holds title to the vehicle, and the loan must be paid off before the borrower can sell the vehicle and transfer title to a new buyer. In the case of a trade-in, retail dealers handle this financial detail on their own, and roll the payoff amount into a contract for the purchase of a replacement vehicle.
Adverse Events and Clean Title
Clean titles show the seller of the vehicle as the individual named as the legal owner. A vehicle that is also free of some adverse history also carries a "clean title." Events noted on a "branded" title include salvage, in which the vehicle was repaired at a cost greater than its market value. Associated criminal convictions, such as for theft of the vehicle and tampering with its odometer, also prevent clean title, as can damage noted on the title from hailstorms, flood or fire.
Researching Car Histories
Every car, truck and van on or off the road has a unique vehicle identification number, assigned originally by the manufacturer. Prospective buyers can check records associated with a VIN through various commercial websites, which provide thorough vehicle histories for a relatively small fee. These sites may provide information on how many previous owners the vehicle has, where the vehicle has been registered, whether or not the vehicle's airbag has ever deployed, or if the vehicle has been the subject of a "lemon law" claim.
Checking Public Records
Attorneys, auto dealers, manufacturers, insurance companies, towing companies, banks and government agencies can check title records through state agencies. These DMV records typically include owner and lienholder name, VIN, tag number, and registrant number. By the federal Drivers Privacy Protection Act, states may not release personal information except to these authorized parties. Permitted uses include law enforcement, recall notification, verification of information given by a loan applicant, and verification of a vehicle's history by dealers.
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