Although some states refer to this document as a pink slip, here in Indiana, we call it a certificate of title for a vehicle. There are three different types of titles a vehicle can be assigned, all of which vary depending on the history and condition of the vehicle. It is important for you to know which kind of title your car has, especially if you plan to sell yours soon.
Continue reading to learn a little about how car titles work, plus how to determine which kind of car title you have for your vehicle.
You Need a Car Title to Prove Ownership of Your Vehicle
A car owner needs to have legal proof that they are the true owner of their vehicle, and the most common document for this protection is a car title. Although other documents can be used to prove car ownership, the title is the most effective and often mandatory. If you purchase a vehicle, you will receive the title from your state’s Department of Motor Vehicles (DMV).
If you sell your car to another person, you will need to transfer the title to them. If you are buying a used vehicle from a private party, the seller will transfer the title to you. Aside from cars and trucks, titles are issued for several other types of motorized commodities, including motorcycles, mopeds, RV’s, boats, jet skis, and more.
3 Types of Car Titles
There are three different types of car titles: clean, salvaged, and rebuilt. Depending on the condition and history, your vehicle will have a title that fits one of the three. To determine which type of title you have for your car, simply read the front. It should have one of the three following labels:
▶ Clean – A clean car title is the best title to have because it means the vehicle has never experienced severe damage. All brand new cars come with clean titles (or at least they should!).
▶ Salvaged – When a car is so badly damaged or defective that the price to restore it would be more than its current value, it is issued a salvaged title. It is wise to understand the difference between salvaged and rebuilt car titles.
▶ Rebuilt – When a vehicle is so badly damaged that it is declared totaled (making it a candidate for a salvage title), but the car owner decides to rebuild it, it can be issued a rebuilt title so long as all qualifications are met. This is also called a reconstructed title. This lets all future buyers know that the vehicle was once severely damaged, but then restored.
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