There are a lot of risks involved in buying a car without a title. Not only might doing so be illegal in your state, you’re leaving the door wide open to any number of ever-changing scams and schemes. In this article we’re going to get a broad overview of the things you should consider before entering into an agreement with a seller who doesn’t have a title, all pooled from our staff’s collective experiences as gearheads and title recovery experts alike.
If you have questions on how to replace a lost car title, check out the article linked here. But I’ll just tell you, all that paperwork and time spent at the DMV isn’t for everyone. Dirt Legal’s services will save you time, effort, and stress when replacing a lost car title – click the button to learn more.
5. Buying a Car Without a Title is Usually Illegal
Throughout most of the United States it is illegal to buy, sell, or drive a car without a title. Like coasting a stop sign or not using a blinker, people get away with it all the time, but it’s still illegal. What’s more, the whole thing causes 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. Which is exactly what should happen, but as we’ll see later, people choose to do it the hard way for a variety of often shady or suspicious reasons.
It’s much easier to replace a title when your name is the one that was printed on the lost title. Replacing a title lost by someone else is possible, but it adds a lot of complexity to an already stressful situation.
Why is it illegal?
Since a car’s title is what assigns legal ownership, if an officer ever questions whether you are the car’s rightful owner, you won’t have any proof. Your story of buying the car might be true, but the officer who pulls you over isn’t going to care – the law deals in facts, not stories. And you can’t just show them your bill of sale because it doesn’t have the power of a car title. A bill of sale alone cannot legally prove that you own a car. For all the law knows, 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 replacement title isn’t already on its way. And since title replacement can take months, odds are it won’t arrive in the mail soon enough.
4. No Title Means No Plates, No Loans, and No Insurance
Not only does a replacement car title take months to arrive, but many states also won’t issue new license plates based off anything short of an actual title. That means that until the new title has been sent to you, you won’t be able to put license plates on your car.
You also can’t get a traditional car loan to purchase a car without a title since car loans are issued using the car’s title as collateral, meaning you would need to take out a personal loan or find some other means of getting the money.
What’s more, your insurance company may refuse to insure a car that doesn’t have 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 in the eyes of the law (unless your state doesn’t issue titles or you have a special exception for your car).
Why can’t I use the plates that came with the car?
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. Any parking tickets or toll fees would be sent directly to the last registered owner who could then track you down and hold you accountable for them at a later date.
3. The Car’s History is a Mystery
Any number of things could be hiding on that lost title. There could be an active lien 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 that they didn’t want to tell you about. It could even be in someone else’s name because of an inheritance, auction, or previous sale where the paperwork was never completed.
There’s no telling how often that car changed hands without a title, something a VIN Check and even a Vehicle History Report won’t reveal. If the car 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 can cause major issues for everyone involved.
1. The Seller Could Be a Scammer
I rated this scenario as worse than buying a stolen car for a reason – this one sneaks up on you years later.
Whether you buy a car from a dealership, a private party, on eBay, or even “as is, no warranty,” there are laws in place to protect you from getting scammed. You can often find legal protection from things like:
Hidden liens or outstanding loans
Obvious imminent damage (i.e., an engine that’s about to blow)
Dishonesty about the title status (clean, salvage, etc.)
Buying a car without a title is already questionable in terms of legality, and on top of that you’re trusting a complete stranger to not scam you. The seller could give you false information about themselves or the car, they could lie to you about damages and repairs, or they could pass off a major issue (like a prior salvage title) by saying they will get you the new title once it comes in the mail – or worse yet, letting you do all the hard work for them.
Then days, weeks, months, or even years later, you discover that crack in the frame, the “flood damage” brand on the title, or a lien attached to the car’s ownership and suddenly the seller is nowhere to be found. Shoot, they might even file for a new title only to hold it for ransom when it arrives! Ask me how I know.
How do I avoid getting scammed?
Anytime you buy a car, bring a friend and meet the seller in a public place. I know it sounds desperate to say that your personal safety might be at risk, but trust me, all it takes is one bad apple and a typically normal scenario could turn into something sinister. 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 for scammers, but thankfully you don’t have to get caught up in it. There are ways to avoid this situation from the very start.
Should You Buy a Car Without a Title?
The average car buyer should never buy a car without a title. Additionally, it is never the buyer’s responsibility to replace a lost title. If the seller claims to have lost the title, ask them to replace it before you buy the car.
Extenuating circ*mstances often force the quick sale of things we would otherwise keep, so it’s understandable that some cars would be sold without a title for plausible reasons. But a quick glance at the sheer number of ads for cars without titles and it becomes clear that many of them are simply too good to be true.
There are some exceptions. An experienced car buyer might accept the risks outlined in this article. Someone buying a “barn find” classic or a non-running project car might not mind the inconveniences. But there is probably a valid reason why that car parked in the field with a tree growing through it is missing its title. If this is you, proceed with caution and make sure to check your state’s laws about buying a car without a title and replacing lost car titles before you commit to anything.
What Can a Title Specialist Do to Help?
Dirt Legal’s in-house title specialists are well versed on title fraud. In addition to quick VIN Checks and detailed Vehicle History Reports, we can get you a new title and fresh license plates for your car and save you all the hassle and legwork of the DMV. Our process is quick, easy, and transparent. Buy now or bookmark for later:
