Though it’s possible to buy a car without a title, doing so comes with many risks. In this article we’re going to discuss all the potential risks of buying a car without a title. This is a broad overview of things you should consider before entering into an agreement with a seller who doesn’t have a car title, all pooled from our collective experiences as gearheads and title recovery experts alike.
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Top 5 Risks of Buying a Car Without a Title
It’s Completely Illegal
In most states it’s expressly illegal to buy, sell, or drive a car without a title. But like coasting a stop sign or not using a blinker, people buy cars without titles all the time even though it’s illegal to do so. What’s more, the whole thing is a “Catch 22” scenario. Like needing experience to get a job, a person who lost a car title would be unable to sell the car without replacing the title first. And in all honesty, that’s what should happen – it’s much harder to replace a title as the next owner.
The authorities deal in facts, not stories. Since the car title is what assigns legal ownership, an officer will question whether you are the car’s rightful owner. Your story of buying the car might be true, but the officer who pulls you over isn’t going to care. And you can’t just show them your bill of sale – it doesn’t have the power of a car title, and it won’t convince them that you own the car; for all they know, that paper is a forgery.
Even if you’re a smart car buyer who created an ironclad bill of sale, one that details the exact reasons why the title is missing and how you came into possession of the car, chances are high that an officer will write you a ticket anyway. That could result in a lengthy legal battle if the car title isn’t already on its way.
And since the title replacement process can take months, odds are it won’t arrive in the mail soon enough.
A Missing Title Causes Several Other Problems
Not only does a replacement car title take months to arrive, many states won’t issue license plates based off lost title paperwork alone. That means that until the actual title has been processed you won’t be able to put license plates on that car. And you can’t just use the existing ones: if you bought a car without a title, the license plates that came with it aren’t registered to you. In a traffic stop you would most likely get a ticket for invalid registration, and any parking tickets or toll fees would be sent directly to the last registered owner.
You also can’t get a traditional loan to purchase a car without a title. Since car loans are issued using the car title as collateral, you would need to take out a personal loan to cover this expense. That’s often easier said than done.
What’s more, your insurance company may refuse to insure a car that doesn’t have a title. It may be impossible to insure the car without a title. Since a car’s title is the only legal document capable of assigning ownership, a car sold on just a bill of sale doesn’t technically belong to you. Not yet, anyway.
The Car’s History is a Mystery
Any number of things could be hiding on that lost title. There could be an active lien on the car title that the owner didn’t want to pay off, so they “misplaced” the title and sold the car without one. It could carry a flood or salvage status.
The missing car title could be hiding other nasty things about the car’s history. There’s no telling how often it changed hands without a title, something a VIN check won’t reveal. If it did change hands, those people were committing a criminal offense called title jumping, and while it might seem innocent enough to sell a car without a title it causes major issues for owners down the road.
The Car Could Be Stolen
Worse, the seller could be offloading their ex-wife’s car without her permission, or even selling a stolen car to an unsuspecting victim.
You will need to run a VIN check to make sure the car isn’t stolen. Do this as early as possible – if the seller won’t give you the VIN number over the phone or internet, take that as a major red flag.
The Seller Could Be a Scammer
Buying a car without a title is already skirting a line of legality, so it’s best to take as much caution as possible. Bring a friend and meet the seller in a public place. I know it sounds exaggerated to say that your personal safety might be at risk, but trust me, all it takes is one bad apple and a typically mundane scenario could turn into something sinister.
Beyond physical danger, the seller might be a good old-fashioned scammer. Maybe they call you a few days after the sale and say “Hey, I found the title!” only to then threaten to report the car as stolen unless you pay them a few thousand dollars. Sounds crazy, but it happens.
It’s a Matter of Trust
Not only are you trusting a stranger to conduct themself with decency, you’re also trusting them not to scam you. A car with no title offers many chances for a scammer to make their move. The seller could give you false information about themselves or the car, they could later claim you stole the car from them, or they could outright blackmail you after finding the lost title.
Scammers know who’s most likely to fall for their schemes, they know what those people usually drive, and they know the words those people want to hear. It’s a cold and calculated existence.
Resolving a scam is difficult. You know the truth, your bill of sale might even reflect the truth, but you will most likely need a court hearing to prove it. Scammers know that most people would rather pay the blackmail amount than bother with court. It’s a tactic older than cars themselves, one that takes time, money, and patience to overcome.
Should You Buy a Car Without a Title?
An experienced car buyer will accept these risks. Someone buying a “barn find” or an old project car might not mind the inconveniences. There’s probably a valid reason why a car in a field with trees growing through it is missing its title. For the regular car buyer, though, buying a car without a title is a risky proposition.
In a perfect world, anyone who loses a car title would replace it themselves. Extenuating circumstances often force the quick sale of things we would otherwise keep, so it’s understandable that some cars would be sold without a title. But a quick glance at the sheer number of Craigslist and Facebook ads for cars without titles suggests that many of them are simply too good to be true.
The Top 5 Risks of Buying a Car Without a Title
The title won’t arrive for months
There could be hidden title issues
The car could be stolen
The seller could be a scammer
Have questions or comments about buying a car without a title? Give us a call.
We are not attorneys. This article is not legal advice.