There are several different car title types. We will give a brief description of the various types here.
Certificate of origin
This is the first title document issued by the vehicle manufacturer to the franchised dealer where the vehicle was delivered to. This document is used to transfer the vehicle to the first owner, and obtain title.
Manufacturer’s statement of origin
This is similar to a certificate of origin used by some vehicle manufacturers import or domestic.
When a title is issued to an owner with no lien specified the title is clear.
When a vehicle incurs some type of loss event such as major damage, theft, or repair, the title may be designated as a salvage title. The decision to place a title in salvage status is normally made by the insurance company who pays a claim on the vehicle. In some states there are statutory regulations which require an insurer to brand a vehicle with a salvage title. An example may be that a vehicle incurred damage more than 60% of its value. However, an insurance company can decide to place a salvage title brand on any vehicle it decides to, even if there is little or no damage. A salvage title, junk title, rebuilt title, or certificate of destruction are almost always permanent brands on the title which cannot be removed. In rare cases a very complex and expensive process of reconstructing the vehicle and inspection may upgrade a branded title status, but it typically involves more expense than the vehicle is worth.
Salvage titles can normally be registered for road use. In some states an inspection is required to make sure that the vehicle is safe for the road, and that any parts used for repair are legal and have a verified origin. For your own safety make sure that any vehicle you purchase which as a salvage title has operational airbags and valid documentation of the VIN# and all major component parts.
Any attempt to remove, obscure, conceal, or alter a title brand using unauthorized means can be a violation of law often referred to as “title washing” or “title laundering.” The salvage title designation is shared with all 50 states. Evading a title brand is a serious offense. Getting a new title for that purpose is illegal and results is serious criminal penalties.
A title which has been sold to a junkyard may incur a junk title designation if the vehicle is intended to be scrapped or parted out. A salvage title, junk title, rebuilt title, or certificate of destruction are almost always permanent brands on the title which cannot be removed. In rare cases a very complex and expensive process of reconstructing the vehicle and inspection may upgrade a branded title status, but it typically involves more expense than the vehicle is worth.
Obtaining a vehicle title when there is serious deficiency in the ownership documentation can sometimes be done using a bonded title. In this process a security bond is purchased equalling the amount of the value of the vehicle. This bond covers any future claims in the event that a valid claim to the vehicle comes forward in the future. The bond is used to pay to remove the claim of ownership or lien. The bonded title will have “Bonded” stamp in it for a period of 3 to 5 years. In many cases the bonded title is more expensive than other title recovery options, but may be a last resort when other methods are not possible. Contact us to determine if a bonded title or other option is most beneficial.
A vehicle which has been substantially rebuilt may have a reconstructed title brand issued by an insurance company, body shop, collision center, or licensed rebuilder. A vehicle with a reconstructed title can normally be registered for road use, but may have an inspection requirement to verify it is road worthy.
A title may be issued under an affidavit in lieu of other missing documentation.
A vehicle which has been substantially rebuilt may have a rebuilt title brand issued by an insurance company, body shop, collision center, or licensed rebuilder. A vehicle with a rebuilt title can normally be registered for road use, but may have an inspection requirement to verify it is road worthy.The vehicle insurance may have limits if the title is rebuilt.
Certificate of destruction
When an insurance company has paid a claim for a vehicle and taken ownership from the insured, they have the option of processing the title as a certificate of destruction. In this case the vehicle is intended to be destroyed and never to be used on the road or registered. It is unlikely that a vehicle with a certificate of destruction can ever be issued a valid title for transfer.
A vehicle with a certificate of destruction can sometimes appear to be in acceptable condition. The insurance company decides to prevent the car from road use to limit their liability in the event that the car is driven and is involved in an accident at a later date. If it is proven that an injury in an accident is because the car had some existing defect, the injured person could claim that the insurance company should not have let the car go back on the road.
A vehicle in otherwise good condition can be issued a certificate of destruction if the insurance company thinks that the airbags could be damages, the frame could be weakened, or simply does not want to spend the money to do a detailed inspection, and just wants to sell it cheap to a junkyard.
Parts only title
A parts only designation is typically found on a bill of sale or transfer form, not on a title. However, if a parts only bill of sale is submitted for vehicle title processing, the title may be issued with a salvage brand or other cloud on title.
Many state DMV title systems are issuing electronic or paperless titles. If you need an actual title document those can often be obtained for transfer or loan processing.
A vehicle with a lien or title loan may have a title issued directly to the lienholder. The purchaser will be listed as the owner, but the title will list the lender as lien holder, and the lender will retain possession of the title.
A vehicle being exported will likely need title documentation for customs clearance. If the vehicle is not declared at the exit point, clear title may not be possible in the destination country. Start the title process early so that port storage fees do not accumulate while waiting for title.
A vehicle being imported to the US must have legal title to clear customs. If the vehicle was previously titled in the US this is a vehicle title recovery process only. If the vehicle was not originally manufactured for the US market, there are requirements for certifying that the vehicle is legal for use in the United States. The Department of Transportation (DOT), Environmental Protection Agency (EPA), National Highway Transportation Safety Administration (NHTSA) and other agencies will need to verify that the vehicle is meets standards for emissions, safety, bumper height, and other guidelines prior to entering the country.
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