What is a Car Title?
The person who holds the vehicle title holds the car and the vehicle ownership, essentially the legal function of a car title. At the same time, the kind of title the car has can also suggest its driving status, like being rebuilt or salvaged.
But above all, car titles exist to distinguish vehicle ownership legally. When transferring ownership of your car to someone else, changes must be made to the vehicle’s title. You can also sign your car over to your insurance company after it is totaled.
Regardless of why you need to sign a car title over to someone else, be it a person or your vehicle insurance company, it’s essential to know how to sign over a car title properly and know when you shouldn’t, as it can be a scam.
This post covers everything about car titles and how to transfer car titles if need be.
When Would You Get a Car Title?
It all begins when you buy your car. You will be issued a vehicle title in your name if you are the vehicle owner. But if you lease or finance your car, the financier will have the vehicle title for now.
These vehicle titles list the financier as the lienholder until all vehicle payment plans are completed. The vehicle title will then be signed over to you as the full-time owner of the car.
Leased car titles are typically never given to the driver as the car is more of a rental than an owned vehicle.
When Would You Sign a Car Title Over?
Sometimes, you would have to sign over your car title to your car insurance provider.
The only times when a vehicle title would be signed over to another individual is when you sell or give your car to them, making those people the vehicle’s new owner.
We’ll get into the specifics on how to sign over a car title to your vehicle buyer or a person in a later section because signing a title over to a car insurance provider requires some elaboration.
When a car is totaled, the cost of car repairs exceeds the vehicle’s fair market value. The fair market value considers the type of car, age, mileage, and overall condition. This is also the maximum amount your car insurance provider will pay following a car insurance claim.
If your car is totaled or damaged to the point that the fair market value payout won’t cover it, you will be on the line for the remaining payments. At that point, it is time to turn your car and title over to your vehicle insurance company and use that insurance payout to get a new car.
How To Sign Over a Car Title to Your Car Insurance Company?
Signing a car title over to your insurance carrier is straightforward as long as you or your car lienholder has the vehicle title. Again, the vehicle title will list the current owner of the car as well as the vehicle VIN.
When signing over a vehicle title, you should list or note the odometer amount, the date of sale if you sell your vehicle, and how much the car was sold for. The vehicle title can also be a bill of sale if you privately sell your vehicle to a buyer.
When the vehicle title is signed over to your vehicle insurance provider, your vehicle insurance company will appear on the vehicle title as the owner. It may even create a new vehicle title, classifying the vehicle as salvage.
Vehicle insurance companies take salvaged cars; any money they can make from them is used in the insurance payout for a new car. A rebuilt title also certifies that a once-salvaged vehicle has been repaired and can be on the road again. It is illegal to drive a salvage car in the first place.
How To Sign Over a Car Title to a New Buyer?
When selling your car privately to someone else, you must change the car title with the buyer’s name as the vehicle’s new owner. Doing this is the same as doing it for a vehicle insurance company.
You would note the vehicle transaction amount on the new title before the buyer takes the vehicle title and turns it over to their vehicle insurance provider.
Some helpful practices when signing a vehicle title over are signing the title over when you receive payment for the car and being vigilant for scams.
How Do You Sign Over a Car Title with a Loan?
To sign over a car title with an outstanding loan, one must first satisfy the loan balance, as the lienholder (typically the lender) holds the title until the loan is fully paid.
Upon settling the loan, the lienholder will release the title, enabling the legal owner to sign it over. Sometimes, the transaction may occur through an escrow process. The buyer’s funds are used to pay off the loan, and the title is transferred directly to the buyer once the lien is cleared.
This process ensures that all parties' interests are protected and that the title transfer complies with state regulations and contractual obligations.
What Else Should You Remember When Signing a Car Title Over?
Signing your car title over to your vehicle insurance provider is a regular part of having your car totaled and replaced. After settling on your totaled car’s market value, you will begin the vehicle title signing process, which, as we’ve just gone over, is no more than two steps.
Next, you contact your vehicle insurance company and present them with your car title. If the lienholder has the vehicle title, they will meet with the insurer.
After receiving a new vehicle title, you would take it to your state’s DMV to register the vehicle in your name along with an updated title.
Can a Car Title be Signed Over Without Car Insurance?
As a general rule of thumb, car insurance is required to drive a car, but not owning one. You can transfer vehicle titles or ownership of a car without insurance. However, you must have car insurance when driving the vehicle. This is also the case for new cars, where you must be insured before driving the car off the dealer’s lot.
Suppose you are getting a car from a private seller. In that case, let your car insurance on your old vehicle expire rather than canceling it. This can help you avoid gaps in your vehicle insurance coverage, which can cause trouble with your vehicle insurance premiums.
Signing a car title over to someone else is a simple process. It’s the last thing you do when privately selling your car to a buyer and after deciding to replace your totaled car using your car insurance.
Insurance Navy can get you the best car insurance coverage at even better prices; all it takes is one phone call.
Contact us at 888-949-6289 to request free car insurance quotes. If you need further assistance, stop at one of our many locations.
