The person who holds the title holds the car -that’s 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 legally distinguish ownership. In order to transfer ownership when trading in or handing over your car to someone else, changes will have to 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, it’s important to know how to do it properly and know when you shouldn’t, as it can be a scam. This post covers everything about car titles and how to transfer them if need be.
When Would You Get a Car Title?
It all begins when you buy your car. If you are the owner, then you will be issued a vehicle title in your name. But if you lease or finance your car, then the financier will be in possession of the title for the time being.
These titles will list them as the lienholder until all payment plans are completed. The 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?
There are times when you would have to sign over your car title to your car insurance provider. The only times when it would be signed over to another individual is when you sell or give your car to them, making them the new owner.
We’ll get into the specifics on how to do that in a later section because signing a title over to an insurance provider requires some elaboration.
When a car is totaled, that means that the cost of repairs exceeds the vehicle’s fair market value. The fair market value considers things like the type of car, age, mileage, and overall condition.
This is also the max amount that your car insurance provider will pay out in accordance with a 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 remaining payments. At that point, it is time to turn your car and title over to your insurance company and use that payout to get a new one.
How do You Sign a Car Title Over to Your Insurance Provider?
Signing a car title over is actually straightforward and simple as long as you or your car lienholder has the title. Again, the title will list the current owner of the car as well as its VIN. When signing over a title, you should list or note the odometer amount, date of sale if you are selling it, and how much it was sold for. This can also serve as a record of sale if you are privately selling your car.
When the title is signed over to your insurance provider, they will appear on the title as the owners and may even create a new title classifying the vehicle as salvage. Salvage cars are taken by the insurance company and any money they can make from it is used in the payout for a new car. There is also a rebuilt title that certifies that a once salvaged car has been repaired and is able to be on the road again. It is illegal to drive a salvage car in the first place.
How do You Sign a Car Title Over to Somone Else?
When you’re selling your car privately to someone else, you will have to change the car title with them as the new owner. Doing this is exactly the same as doing it for an insurance company.
You would make note of the transaction amount on the new title before they take it and turn it over to their insurance provider. Some helpful practices when signing a title over are not signing it over until you receive payment for the car and being vigilant for scams.
Remember The Following When Signing a Car Title Over
Signing your car title over to your insurance provider is a regular part of having your car totaled and replaced. After reaching a settlement on the market value of your totaled car, you will then begin the signing process, which, as we’ve just gone over, is no more than two steps.
You contact your insurance company and present them with your car title. If the lienholder has the title, then they would meet with the insurer. After receiving a new title, you would then take it to your state’s DMV to get it registered 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 technically transfer titles or ownership of a car without insurance. However, you must have car insurance in order to drive it. This is also the case for new cars wherein you must be insured before even driving it out of the dealer’s lot.
What’s more, if you are getting a car from a private seller, you should let your car insurance on your old car expire rather than canceling it. This can help you avoid gaps in your coverage which can cause some trouble for your insurance premiums.
In conclusion, signing a car title over to someone else isn’t a complex process. In fact, it’s the very last thing you do when privately selling your car 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 your free auto insurance quote. If you need further assistance, stop in at one of our many locations.