What Are the Main Types of Car Titles?
The most widely used car titles are:
- Clear title: This states that the vehicle has no outstanding financial burden of any kind that would prevent it from being sold. It is the most desirable car title, and in many cases, the only one that makes you eligible for a car loan.
- Salvage title: This is issued to a car with a major value decrease as a result of a significant accident, subsequent repair, or theft. An automobile is due to receive a salvage title if it loses more than 75% of its original value. ItStillRuns.com says that having a salvage title reduces a car's value, usually meaning it's no longer eligible for financing. The salvage title is normally issued by the car's insurance company and could even be issued to cars with little or no deterioration. As long as they can pass a safety inspection, cars carrying this title are legal to drive.
- Junk title: A junk title is given to cars that have been sold to junkyards and will be either sold for scrap metal or disassembled to be sold part by part. In some states, junk titles are considered the same as salvage titles.
- Bonded title: This title is given to cars with missing ownership documents, with a security bond that is equal to the car's value being given to the new owner. This assures the owner they will be financially protected if any future ownership claims arise. A bonded title is valid for three to five years.
- Reconstructed title: This is for cars that have gone through significant repairs or transformations. It is issued by the insurance company or the place where the repair or transformation was done, such as a collision center, body shop, or licensed vehicle rebuilder. After being inspected and deemed safe for public roads, a reconstructed vehicle can be registered for normal use.
- Affidavit title: This title is given under an affidavit in situations where the car documents are missing.
- Rebuilt title: This is similar to a reconstructed title and is for vehicles that have been significantly rebuilt. As with the reconstructed title, it is issued by the insurance company or the place where the rebuilding took place, such as a collision center, body shop, or licensed vehicle rebuilder. The vehicle is legal for use on public roads if it passes a safety inspection.
- Water damage title: This title is issued to vehicles that have sustained significant damage from water, perhaps as a result of thunderstorms, flash floods, hurricanes, or other similar weather phenomena. Even if you don't live near areas where these things happen, having your vehicle inspected for water damage is a good idea.
- Odometer rollback title: This title is given to a vehicle that has had its odometer secretly and illegally turned back so that it will report less mileage than the car actually has. A competent mechanic can usually determine if a rollback has occurred.
- Dismantled title: According to RideSafely.com, a dismantled title is similar to a salvage title and is given to cars that have been damaged beyond the point where repairing them would make financial sense. When the cost of repair is higher than the vehicle's value, a dismantled title is needed to sell the car's remaining valuable parts.