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Car Title vs Car Registration: What's the Difference?

Car Title vs Car Registration: What's the Difference

If you’re a vehicle owner with car insurance and drive your auto regularly, then you may already have your vehicle registration card or forms sitting in your glovebox. If not, then you should start doing so because driving your auto without proper state registration is illegal.

Carrying your vehicle registration card is legally required to be able to use public roads which run pretty much everywhere. It’s sufficient to say that having your new or pre-owned vehicle registered is a requirement for being able to drive your auto legally.

Another type of paperwork related to your vehicle that will be legally needed to drive your auto is the vehicle title that demonstrates the car ownership.

We’ll be getting into what a title and a registration mean for your vehicle and how they are used by the state to keep your car certified for safe operating.

Car Title vs Auro Registration: The Difference Explained

What is an Automobile Title?

Starting with the vehicle title, it is literally the first kind of paperwork you will encounter when owning a car. In fact, you will be issued a car’s title from a seller or dealer when you purchase your new or pre-owned auto. The car title functions as the legal document which states the legal ownership of the vehicle.

There are other types of car titles that will be explained later on, but legal ownership is the standard one. A legal vehicle title for a new car can also be filed with the state’s DMV, division of motor vehicles, or DMV division of motor vehicles equivalent. Car titles for vehicles with loans list the lienholders as the owners of the auto until the loan for the auto is paid off. In addition to the owner’s name, the car title will also list the vehicle identification number (VIN), auto maker and auto model, the type of car title (will go over later), and the date the car title was issued.

What is A Motor Vehicle Registration?

Proof of your vehicle being registered is what a police officer will ask you for, in addition to your drivers license, whenever they pull your car over. They do this regardless of the person because they must first check if the car is even able to be on the road in the first place.

The car registration process is one that takes place entirely at your state’s DMV, division of motor vehicles, or DMV division of motor vehicles equivalent.

A legal car’s registration serves as proof that the car driver has the certification to drive legally, own or lease a vehicle, and paid their registration fees and taxes. A card and license plate are issued to the car driver and their vehicle after they got their car registered. There is a sticker on the plate of the car that expires every year or so, depending on your state, which must be renewed when the time comes.

At times, you may see a car drive by with one of those temporary license plates. This is because they may have recently bought the car since some dealerships offer temporary registration for about a month after the car purchase date.

Already you may see the difference between vehicle registration and car title, which only certifies the owner of the vehicle.

How do You Register Your Motor Vehicle?

The best way to learn about how to get your car registered is by its practical application. While each state has its own DMV, division of motor vehicles, the legal registering process that each driver needs to go through to ensure their car is registered and the vehicle registration is issued is pretty consistent.

The first step is to always check your state-specific regulations regarding how to legally register your car before diving in.

After that, it’s time for you to register your car:

  • Get auto insurance for your vehicle - 48 out of 50 states require their car drivers carry a certain amount of auto insurance for their vehicle in order to be legally allowed to drive their car. You’ll be in charge of choosing the car insurance coverage type, auto insurance coverage limits, and car insurance deductibles so long as they are greater than the auto insurance deductibles required by the state. Some drivers with multiple cars are able to add another vehicle to their car insurance policy.
  • Pass the necessary inspections - Some states require incoming applicants for vehicle registration to have their vehicle safety features and car emissions inspected.
  • Have all necessary documentation - Before starting the vehicle registration process itself, you must make sure you have all the proper documentation and paperwork to register your auto. This includes the car title, auto insurance form, driver’s license, proof that you pay taxes and associated fees, the registration application form, and the bill of vehicle sale.
  • Complete registration form - This can be done online or in person. You’ll be asked to provide your car VIN, driver’s license number, and auto plate number. A car registration fee ranging from $20 to $150 plus taxes, depending on the state and car type, will also have to be paid.
  • Have registration card issued - Now your car is fully registered for use on the roads. The only thing left to do is receive your registration card, which you must carry with you in the car at all times as proof of your car being registered -usually in the glove box.

What Are The Different Types of Car Titles?

A car title does two main things -list the legal owner of the vehicle and the condition the car is in.

There are different types of car titles that identify whether or not the car has been in a car accident that can compromise the car’s functionality.

Here which these different motor vehicle titles are and their differences:

  • Clean title - Cars with no reported accidents, usually new ones, are given clean titles.
  • Clear title - This type of title is issued to cars that list only one person as the legal owner. New cars that are leased or financed through a payment plan may not qualify for this title.
  • Salvage title - Vehicles that have been labeled a total loss are given a salvage title. This means that the car’s functionality has been compromised, and it’s no longer safe or legal to be driven.
  • Rebuilt title - The only way to make a used car with a salvage title legally driveable again is to get it a rebuilt title. This would mean getting all the damages with the salvage car fixed. Please note that used cars of this nature are generally harder to legally insure. But at least they are legally certified to be road-safe again.
  • Bonded title - Some cars may not have a definitive legal owner or record of ownership. They must be issued a bonded title and a bond equal to the car’s value.
  • Dismantled title - This title is issued to a used car that is deemed totaled and will be taken apart.
  • Junk title - If a used car simply can’t be repaired due to any damage, it will be issued a junk title. This isn’t when the repair costs exceed the car value, but when the car can’t be saved.
  • Lemon title - A used car or any product can be labeled a lemon if they don’t function properly after the initial sale. A car can be issued a lemon title if it is new and something is wrong with it when it was bought.
  • Odometer rollback title - Every car title includes the odometer amount. Setting it backward is illegal. If the odometer is tampered with, the car will be issued a title saying so.

How is a Motor Vehicle Title Transferred Between Owners?

The practice of vehicle titles is less of a hassle than vehicle registration because titles don’t expire. The only way a title can change is if it goes from salvage to rebuilt. So, the condition of the car is always known.

But, what of the owner of the car? What if that were to change? Then, the motor vehicle title must be transferred between the owners. People personally selling their cars are required to do this. The new owner will take the original title to the DMV, division of motor vehicles, and be issued an updated one. The original bill of sale will also be needed, along with an odometer disclosure agreement that lists the car’s mileage.

What Will You Need First: Vehicle Registration or Car Title?

Because the vehicle title has such information as VIN, year, make, and model of the vehicle, all of these are essential for the vehicle registration process. So, naturally, the vehicle title would come before the vehicle registration.

Vehicle ownership is extremely important for any state DMV, or division of motor vehicles, because it gives them an individual to associate the vehicle with. It also shows if the car is on any sort of payment or leasing plan.

In any case, most states do require that all applicants have proof of vehicle ownership, and that is precisely what a vehicle title is.

How Does a Vehicle Title And Car Registration Tie Into Refinancing Your Auto Loan?

If you have a loan on your car, then a car title and vehicle registration will be needed to refinance a loan in the event refinancing is needed.

In the simplest of terms, refinancing a car is using an auto loan to pay off another auto loan. The new loan is usually given by a new lender.

Many people refinance their loans in order to receive lower interest rates, consolidate debt, and overall more secure refinancing so they can legally keep their cars and eventually pay them off. This also means there are still existing debts and payments on the vehicle that just last longer. There are some fees and costs associated with the refinance process. A title and registration for the car would be absolutely needed in order for the new lender to give you a loan in the first place.

How Much Does a Car Title And Car Registration Cost?

The cost of registration has been previously mentioned in this post. Depending on the state, a car registration fee can run from $20 to $150 plus taxes.

In Illinois, the base car registration fee is $101 plus taxes. Senior drivers only have to pay $24 plus taxes to register their cars, while electric car owners pay $35 for two-year registration and the correlated tax as opposed to the standard vehicle registration fees. At the same time, there are also fees associated with vehicle titles.

Unfortunately, Illinois has one of the highest fees for a vehicle title at $150 plus tax. That would result in just over $300 to properly title and register your car. A car title fee can go from just over $10 to $100 plus tax. Illinois and Wisconsin stand out due to their fees being over $150 plus tax.

The good news is that you usually only have to pay car title fees and taxes once. In some states, the type of title can also affect the fee -a rebuilt title may cost more than a salvage title, for example.

Key Takeaways About Car Registration And Titles

By now, you should be familiar with the registering process and purpose of vehicle registration and car titles. In the end, it all comes down to ownership and having a valid license plate with the state. For newer drivers, they would have to go through both.

Drivers with vehicles of their own are expected to maintain their vehicle registration on an annual basis. These are those stickers you place on your license plate. In Illinois, these expire on the driver’s birthday. Other states may set their renewal time differently. It’s always best to stay on top of those dates and mark them down on your calendar.

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