Vehicle Title.

In plain English

A vehicle title is the official state-issued document that proves legal ownership of a car. It lists the owner's name and the car's identifying details, and if you borrowed money to buy it, the lender (the lienholder) is recorded on the title until the loan is paid off. While a loan is open, you typically hold the title but cannot sell the car free and clear until the lien is released. States can also brand a title to warn buyers of past damage, with labels like salvage or rebuilt, and these brands stay with the car permanently.

01Why it matters

The title is what lets you legally sell or transfer the car, and a branded title (salvage or rebuilt) lowers its value and can complicate insurance, so always check it before buying used.

02The math, step by step

You finance a used car. The title lists you as owner and the credit union as lienholder. Once you make the final payment, the lender releases the lien and you get a clear title, which you then need to sell the car. If the title is branded salvage, expect a lower resale value and possible insurance limits. Branding categories and transfer fees vary by state, so check your state DMV for the exact rules where you live.

03What this is NOT

04Receipts

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