The Expert Podcast

So, you parked in the wrong place, you left your car blocking a fire hydrant, maybe you didn’t read the sign that there's no parking allowed in this parking lot, and your car got towed. No big deal, right? You just go down, pay a fine, and get your car back. Well, you’ve got to be very careful because, in many states, you are required to prove ownership of the vehicle before it can be released to you. So, for some reason, if you do not have your car title, your car could stay impounded, and it could be very, very quickly sold.

Drivers risk losing cars forever under 100e law that allows tow vehicles to be sold days after they're yanked. Some states and municipalities have a rule that says if the car is not picked up and paid for within a week or two—sometimes a month—they can auction off your car and sell it, and you're done. You lose your car. The paperwork requirements for you to get your car out might be something you can't do quickly, which is why it’s very important to always keep track of where your car title is located.

Check it every year at least, maybe every six months. Is it in your file cabinet? Is it in a safe deposit box? Is it in an envelope? Here's the reason why: your vehicle registration, which you renew every year, serves as a reminder. Every year, you get a thing in the mail: “Hey, your registration is expired. Pay the fee, show your insurance, get a new registration, and you get a sticker for your license plate. Good to go.” So, it’s a regular reminder. A vehicle title, on the other hand, doesn’t have to be renewed. It’s a document that is printed and issued to you one time when you buy the car, and that’s it. So, if you lose it, you may not know about it until you need it for something. If the reason you need it is because your car is going to be sold in a week, it might take you longer than a week to get your title.

Also, very, very important: if you’ve purchased a vehicle and never transferred the title to your name—let's say you bought a car on Craigslist, the person signed the back of the title, they gave it to you, and you never put it in your name, just left the title signed to you in the drawer—that’s even worse. You can’t get another title because it’s not in your name. So, even though you might be saying, “Well, I don’t want to pay the fees, it’s no big deal,” you have a car—make sure you get that title in your name as soon as you can. If you lose it, it gets damaged, or you spill coffee on it, you're going to have a problem—especially if the car gets towed or in an accident. Sometimes people crash their car, and the insurance company needs the title to pay your claim. If you don’t have it, you could be out of luck. So, checking your title on a regular basis is a good thing. If you've lost it, get a duplicate.

Here’s the other thing: If you have a loan on the vehicle and you pay off that loan, you buy a car at a dealership with a 48-month loan, pay your payments, and send in your last payment—what happens to the title from the lender, from the bank? Banks hold your title while you have a loan. You pay your last payment; they take that title out of their file cabinet, sign it, stamp it "paid," and mail it to you. You think, “Well, I have my title.” But you really don’t, because that loan, that lien on the title, that cloud on the title is still registered at the DMV, at the state title office. The only evidence that it’s been paid is what’s signed on that title.

The banks normally don’t notify the government that you’ve paid off your loan. They just tell you. So now, if you lose that title, you have to go to the government—the DMV, Department of Transportation, or whatever agency in your state issues titles. You tell them, “Hey, I need to get a replacement title.” They pull it up on the screen and say, “No, you still have a loan on your car.” Now you have to go back and chase it down. Maybe the lender’s out of business, maybe they moved, or maybe they just don’t have a department that can help you. Now, you're stuck.

So, as soon as you get that title with the lien signed off, take it to the DMV and have them remove that lien from your title record so you don’t have to worry about a duplicate title in the future. A vehicle title is a very important legal document. Make sure you have it properly recorded in your name, make sure the liens are removed, and make sure you know where it is at all times in case you need it at a moment's notice.

If you like this video, be sure to click on a few others on our channel to see if there’s other information that might be helpful to you about this same subject, or maybe even other related subjects that could assist you with the resolution of your issue.