Is Buying/Selling A Car With No Title Allowed Or Legal?

Is buying or selling a vehicle without a title a good idea? In this episode of car titles, we’re going to talk about how vehicle titles are more important than actually taking possession of the vehicle. We get hundreds of calls a day, sometimes over a thousand calls a day, and many of the time that people call in it’s because they’re considering purchasing a vehicle without a title and they want to know how they can get a title if they buy it.

Legal Advice: Never Buy Without a Title
In our sales department, we always have the advice to never buy a vehicle without a title. We never recommend doing it. Title is a legal government document you see like this and it’s something where if you buy a vehicle and even if you get a bill of sale even if you get the keys even if you get possession if you don’t get that certified title document you have nothing you’ve purchased nothing. The title document is the most important thing.

Legal Ramifications
So, can you buy a car without a title? Well, let’s talk about what happens if you do. In many states, it’s actually against the law to buy or sell a car without a title. Here’s the statutes from Texas: “The owner of a motor vehicle that is required to be titled must obtain the title before selling or disposing of the vehicle. That’s a crime if you don’t.” In Oregon, violating title requirements is also a crime.

Risk and Reality
Now, that doesn’t mean the SWAT team is going to come in and swoop down and pick you up. People buy and sell cars without titles all the time. Why do they have these laws? Well, it’s to protect you from the risks involved. If you purchase a vehicle without a title, in most cases, you could probably get a title 70-80% of the time. It’ll all work out. But 20 or 30% of the time, you’ll never get a title ever. And you won’t know that until you actually try to get a title.

Unreliable Checks
There’s no amount of searching VIN checks, car checks, background checks on a vehicle you could ever do to find out 100% if you will get a title. Forget about Carfax, VIN search, VinAudit, none of those places are going to tell you everything you need to know about getting a title. Even if it looks like it’s a clean vehicle, clean title, it doesn’t mean necessarily you get to be the owner of it, right?

Hidden Issues
Sometimes vehicles are not eligible for you to get a title because of something in the background. Maybe it’s a salvage title, maybe it’s a parts-only title, maybe it’s reported stolen. Some of that you can find out on Vin or Carfax, but if there’s a lien on the vehicle, you will never find that out by Carfax.

Lien Issues
It might say no lien found, but if you read the small print, they don’t search for liens everywhere. In fact, Carfax has about 10% of all liens in their system. So, you’re not going to find it. You can’t get that information from the DMV either because they’re not allowed to give it out.

Ownership Disputes
If there’s a lien on the vehicle, all title transfers are blocked. You cannot transfer title with a lien on the vehicle, even if it’s paid off, until the lien holder clears it. If there are any ownership disputes on the title, if the last owner maybe doesn’t agree or doesn’t want to cooperate with you to do a transfer, you’re going to have a problem.

Financial Risk
So, unless you’re willing to take the money that you’re looking to spend on that vehicle and completely make it speculative, put it at risk, don’t buy a car without a title. End of story.

Post-Purchase Solutions
Now, if you have already purchased a vehicle without a title, now you have to at least try something. It doesn’t hurt to try. You can try a bonded title, court order title, prior owner contact. There are many methods you could try to get a title. Our website has them all listed below.

Seller’s Responsibility
But if you’re considering purchasing a vehicle without a title, ask the seller, “Why don’t you have a legal title to give me like you’re supposed to under the law?” If they can’t give you a straight answer, then just walk away. It’s a scam. Even if they have an answer that sounds good.

Seller Reliability
Look, I can’t tell you how many times our sales staff comes to us and says, “Look, I talked to this person, the sellers seem legitimate, they seem like honest people, they were a middle-class couple, everything seemed legit, but I can’t get a title.”

Seller’s Post-Sale Reluctance
Even if the sellers have good faith when they’re talking to you about buying the vehicle, it doesn’t mean later they’re going to change their mind. Once they have the money in their hand, they’re not going to do anything to help you.

Common Problems
The number of times where something comes up that is more problematic than that is greater than you think. Many times there’s a lien on the vehicle, many times there’s a title pawn on the vehicle, many times it was sold at an auction like Copart or IAA and it has a salvage or parts-only title.

Salvage Title Challenges
Even a salvage title requires a very thorough detailed inspection. Sometimes the inspection has to go to the state where the last title was from. So, if you buy a car from out of state and it’s salvage, you would have to bring it back to that state, have it inspected, and have it approved.

DMV Hurdles
I can tell you this: the states don’t want salvage vehicles back on the road. The DMVs look for any reason they can to fail a salvage inspection because their official position is salvage vehicles don’t belong on the road. They’re for parts.

Financial Gambling
Technically, if you jump through a bunch of hoops, you can get it back on the road, and it happens 50% of the time. It’ll work. But again, do you want to take your money and give it a 50/50 chance of being thrown away?

Recovery Options
Would you go into the casino and bet $7,000 on blackjack or the roulette wheel? Because that’s what you’re doing by buying a car without a title.

Steps to Recovery
If you receive incorrect or incomplete information or lost it, remember that can happen too. You buy a card and lose it, you may have the option of using a bonded title. Here are the steps: Purchase a bond, apply for a bond.

Final Advice
Remember, purchasing a vehicle without a title is a risk. Make that decision wisely. If you decide to go through with it or if you’ve already purchased a vehicle and now you’re stuck and have to do something, then you can look at these methods: bonded title, court order title, prior contact. There are other things you can do.

Regretful Buyers
Most of the people who call us that already bought a vehicle without a title wish that they could go back and not do it because it’s not worth the hassle. It’s going to take your time, even if you do it all yourself for free.

Legal Framework
You know, you don’t have to pay anybody to get you a title if it’s your vehicle. You can do it yourself. But it may take you 10-15 hours of time to research, get documents back and forth, then you have to get the runaround from DMV.

Complexities
Then you have to wait for them and hope, cross your fingers that nothing comes up that prevents that title from being issued. Sometimes there’s another title that’s already been issued that blocks your title, sometimes there’s a prior owner claim, sometimes it’s a deceased owner where that vehicle has to go into probate.

State Laws
There’s a lot of things that can come up. We could never even get into them all in a video. But that’s why the states have these laws that it’s illegal to buy and sell a vehicle without a title. They just want to keep it simple.

Research
Investigate your state. You can do research. Every state has their statutes online. Transportation code, vehicle title and registration code. This one is for Oregon, but every state has these documents.

Conclusion
But even if it is legal, you probably don’t want to do it anyways because you could be out of luck and all your money’s gone. And now you have to worry about trying to resell it to somebody else without a title and cross your fingers and hope that you find a buyer or to sell it for parts.

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