Definition

A legal document proving you own the car. Lenders usually hold the title until you fully pay off your auto loan.

What to consider

  • Store your car title safely—it’s essential for future transactions.
  • Keep a digital copy as a backup.
  • Review it when you plan to sell or refinance your vehicle.

Real world scenarios

  • Amber confirms the car title is clear of liens before purchasing a used sedan from a private seller.
  • Once Derek pays off his auto loan, the lender sends him the free-and-clear title, reflecting full ownership.
  • Vera double-checks the VIN on the title matches the car’s dashboard number to avoid any title fraud.

Related terms

Legal & Estate Planning