Depending on what state you live in, you may not get your title until you’ve paid off your auto loan! Here’s the deal with vehicle titles and financing. It doesn’t usually take that long to get your car’s title in the mail after you complete a loan or if you purchase a vehicle in a non-title-holding state.
Getting Your Car Title
Your state determines who gets your title. After your purchase a vehicle, you typically get the car’s title in the mail within two to six weeks if you’re in a non-title-holding state. Non-title-holding states send the title to the owner/operator of the vehicle. There are only nine non-title-holding states: Arizona, Kentucky, Maryland, Michigan, Minnesota, New York, Oklahoma, South Dakota, and Wisconsin.
All of the other states are title-holding, which means the lender keeps the title until you complete your loan. When you finance a car, the institution that financed the vehicle gets its name on the title as the lienholder. In most states, which are title-holding, they also hold onto the title until you finish the loan.
Once you pay off everything you owe, the lender can remove their name and send you a copy of the title, or issue you a release of lien letter. You can take your release of lien letter to your Department of Motor Vehicles (DMV) or Secretary of State (SOS) to get a clean title with just your name on it. Getting a new title in your name typically takes around 30 days.
Why do most lenders keep the title? Since a financed vehicle is technically the lender’s property until you complete the loan, the title-holding states simply keep the title until the loan is paid off.
A title’s purpose is to show who the legal owner of the property is, and you can’t sell a car legally without a title. Since you can’t sell a financed vehicle without releasing the lien from the title, most states simply have the lender keep the title until the time comes to release the lien or when the owner needs to sell the vehicle.
Your vehicle’s title also has important information on it, such as the vehicle’s identification number (VIN), its mileage at the time of sale, its make and model, and date of manufacture.
Need to trade in a car without the title?
If you need to trade in your vehicle but your lender has the title, no worries, because the dealership can handle it. The dealer contacts the lender and they take care of the transfer of ownership themselves.
If you’re in a non-title-holding state and you simply can’t find the title or it got damaged, you can request a duplicate title from your local DMV or SOS. You usually need your Social Security number, the car’s VIN, and possibly the date of manufacture (which you can find on the vehicle itself). It may take a couple of weeks to get the title in the mail, depending on your home state’s regulations.