A car title can feel like an afterthought when buying a vehicle, but this document is essential for financing and registration. Purchasing a car without a title from a dealer is possible – and in many states, it’s even legal. Still, it’s far from a risk-free transaction.
At many dealerships, used cars from auctions can arrive without titles. Some dealers opt to hold the vehicles until the paperwork arrives, while others are willing to risk listing them for sale sooner. The latter approach can delay registrations and frustrate customers if the titles don’t show up on time. Carvana’s well-publicized struggles with delayed titles and registrations show that even large, tech-savvy retailers aren’t immune.
A missing or delayed title can develop into bigger problems. You can’t register the vehicle without it, and if financing is involved, the lender typically holds the title as collateral. Without a title, lenders may call the loan early or reclassify it as a personal loan with less favorable terms, such as a higher rate or shorter repayment period. The dealer may issue temporary license plates, but this is a short-term fix. Some states prohibit paper tags from being issued more than once on the same vehicle.
When dealers can legally sell without a title
In many states, it’s legal for a licensed dealer to sell a vehicle in advance of the title paperwork arriving. It’s not necessarily the best business practice, but it happens. This can occur when the dealer receives the car before the title has cleared from a previous lienholder or the seller hasn’t submitted the title. In the case of a wholesale auction, the timeframe for title availability is usually disclosed up front. However, all it takes is a snafu with the bank or auction company to cause a delay. A dealer could sell a car in good faith, expecting the title to arrive shortly, only to find the paperwork held up longer than planned.
Nonetheless, most states mandate how long dealers have to apply for a title and registration for the new owner. For instance, Florida dealers have 30 days, and the same applies in Georgia. California gives dealers 30 days for used cars and 20 days for new vehicles. Texas is less specific, and its regulations say that the seller must apply for a title in “a reasonable time.”
Delays of more than a week or two to receive a title are red flags. There could be an unpaid lien, complications with a trade-in, auction house issues, or the vehicle may have a title brand (like rebuilt title vs. salvage title).
How buyers can protect themselves from title issues
The best first step before buying any car is checking the vehicle identification number (VIN). You’ll want to confirm if there’s an active lien on the vehicle and verify that it has a clean title. Most state DMVs offer a title search service, but the information may not be instantly available. Online companies (like CarFax, AutoCheck, and GoodCar) provide more immediate information. You’ll then want to confirm that the dealer has the title in hand. Ask to inspect it. If the document has the previous owner’s name, the dealer hasn’t completed the necessary paperwork to title and register the car to a new owner. That’s another red flag.
Keep in mind that more states are using digital titles, especially after the title paper shortages of a few years ago. This technology speeds up the titling process, but means that touching a physical title may not be possible. You may have to settle for an image. If the seller says the title is being processed or something similar, proceed with caution. Ask for proof that the title transfer has been initiated with the DMV or the previous lienholder. You’ll also want the deal to reflect in writing when the title will be delivered. Don’t pay for the car in full until you’re confident there are no issues with getting the vehicle titled and registered in your name.
If you’re already having trouble waiting for a car title, contact your state’s DMV, attorney general, or consumer protection agency. Florida, for example, makes the process easy. Buyers in that state can submit a complaint affidavit if they haven’t received a title and registration within the 30-day deadline.
