QandAs: Loans

What is a clear title on a car?

Answer:
If you own your automobile outright and there are no

outstanding payments or liens on the property, the vehicle has a clear title. A car title is often referred to as a “pink slip,” which identifies the legal owner of the vehicle.

The Department of Motor Vehicles issues titles and this document list specific information about the vehicle such as the make, model, and year. If you’re buying or selling a vehicle, the car title is very important.

Once ownership of a car changes, DMV modifies the current car title and sends the new owner an updated copy. The new title will include the last date of sale and the mileage at the time of sale.

Persons who make payments to an auto loan lender do not have a clear title. Additionally, they do not have possession of their vehicle title. Rather, the Department of Motor Vehicles retains the title until the car is paid off. In this case, the vehicle title will include all lien holders. After paying off a vehicle, it can take several weeks to receive the title.

It is important to keep the title in a safe place, perhaps a safe deposit box. If you plan to sell the car in the future, the title is needed to complete the transaction.