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Originally Posted On: https://fastaction.ca/2022/08/22/what-is-a-car-title-your-questions-answered/
Are you looking into getting a new car? What is a car title?
In Ontario, a car title is actually called a vehicle registration or a vehicle ownership or a vehicle permit. It’s your proof of purchase and ownership for a motor vehicle and has all the important identifying information on it.
This includes the details of the car. This means it’s VIN, registration location, your home address, and licence plate number. This registraton has two parts. One side is the vehicle permit and the other side is the plate permit. It is possible for the vehicle and plate to be in different names.
When purchasing or transferring a title in Ontario, you must register it. It’s essential to know all the basic ins and outs of what a car title is. Read on for a guide on getting a car title, how they work and what to do with them.
What is a Car Title?
A fair number of people end up Googling “car title meaning” because they aren’t sure what it is. A car title goes by many different names, but they all do the same thing. It’s the proof of ownership of a motor vehicle.
The term “car title” comes from the United States. In Canada, it’s still called a car title in common speech, but officially it has a different name. In Ontario, it’s known as a vehicle permit, etc. and comes in the form of green paper.
In most respects, it functions in similar ways to car titles in the United States.
Each province has its own specific rules and regulations for how car titles or permits work. In Ontario, you must register your vehicle ownership with Service Ontario. This registration has to happen within six days of purchasing it.
If you buy the car from a dealership, the dealer will handle most of this for you. They’ll prepare the registration paperwork and will need you to provide your car insurance. All you have to do is look over everything to ensure you’re satisfied and sign.
The Information on a Car Title
A car title or vehicle permit has some vital info on it. The first thing it has is anything required to identify your vehicle. These are things like your VIN, as well as the vehicle’s make, model, and year in question.
Your license plate number will be on there, as will any relevant specs like weight, size or how many cylinders the engine has. Of course, your full name and home address will be on the permit as well.
Vehicle history, such as the previous owners is not on the vehicle permit. To find previous owners you can purchase a UVIP (Used Vehicle Information Package) from Service Ontario. This will show you how long each previous owner owned the vehicle.
One can also purchase a CarFax Report or similar report to see how much service was done on the vehicle and if there were any reported accidents. This will help you determine if the car was well-taken care of or not.
Clean, Clear, Salvage, and Rebuilt Titles
If you’ve heard the term “clean title” before, that refers to a car that’s had no major damage or bad events happen to it. When a car comes out of the factory brand new and ends up straight in a car dealership, it has a clean title. This guarantees that there have been no accidents, damage, or serious repairs done on the car.
Cars with clean titles are more valuable and desirable than those that have suffered damage or repairs. The reason is pretty straightforward. Anything major that happens to the car has to be on the vehicle permit.
This warns any future dealership or private buyer there might be something wrong with it. Understandably, buyers who see a title with lots of problematic history don’t feel comfortable. They worry if they buy it, it might end up breaking down or having issues a new car wouldn’t.
Some people also have superstitions about cars that have been in multiple accidents. This is especially strong if the vehicle has had multiple owners. Even minor dents or fender benders end up on permits.
In general, cars that don’t have a clean title have a lower value. This makes them cheap to buy but sometimes pretty hard to sell. They can also sometimes be more expensive to insure.
Salvage and Rebuilt Titles
Two examples of titles that aren’t clean are “salvage” and “rebuilt” titles. If a car title says salvage on it, it means it was in a serious accident. In all likelihood, the car came out of it as a total write-off.
While some people might be into salvage cars for repair or hobby purposes, getting insurance for it could be a challenging.
A rebuilt title refers to a salvaged car that’s undergone some serious repairs. This can range from rebuilding the engine block to reconstructing the entire frame. A rebuilt car is safe to drive and needs to pass all the relevant safety checks to get registered or insured.
The problem is superstition and stigmas remain, and so does the history of the accident. This can affect value and insurance premiums but can save you a ton of money at the dealership.
A clear title is a permit that is free of any debt or liens. Some people unlock the equity in their car through a car title loan. This requires the person to own the title to their vehicle first.
The rates, terms, and length vary, but the best and most reputable companies let you keep driving the car. Car title loans are usually a pretty safe way to get a loan with your car if you find yourself in need for a term loan. The only issue is that the lien will be registered against the vehicle until you repay the loan.
If you sell or transfer the permit, the lien goes with it. The next owner will be responsible for paying the rest of the loan or debt as they inherit it. This is usually only something to consider if buying or selling in the private market.
Dealerships will deal with this on their end. They’ll usually pay back the loan and balance it against the value of the car or even swallow the cost if it’s low enough. Most often, the one selling to the dealership will receive a lower offer as compensation.
Much rarer is if the dealership tries to pass the cost on to the next buyer via a mark-up. That said, if your title is clear, it means you don’t have to worry about any previous liens or debts.
Registering or Transferring a Car Title from Outside Ontario
If you buy a car from another province or plan on moving, you’ll need to register your plates and vehicle again. In Ontario, you can drive with out-of-province plates or a vehicle permit for 30 days. After that, you have to pop by Service Ontario to fill out the necessary paperwork.
On certain cars from certain provinces, you might need to have a safety inspection done before importing them to Ontario. This requirement can also come up if bringing in a car from the United States. If you plan to sell your vehicle out of the province or ask for a car title loan, you’ll need proof of ownership.
Car Title Insurance
You cannot buy car title insurance in Ontario, so when you buy a car it is up to you to do your own due dilligence to ensure that there is no lien registered against it nor a serious accident history. As mentioned above this can be done though a UVIP or CarFax report. If you buy a car from a dealer you are protected as they are responsible for making these checks. This is why buying from a dealership allows you to buy with confidence. Ontario dealerships are heavily regulated through OMVIC (Ontario Motor Vehicle Industry Council). When you plan to own a vehicle in Ontario, you have to get in registered at Service Ontario. Part of this process means getting car insurance.
When buying from a dealership they take the risk if they miss any monkey business with regards to the car. This includes title washing is when sellers try to clean up or minimize the event history on a vehicle permit to hide any damage. Title jumping is when someone owns a car without being the registered owner (also called curbsiding, which is illegal in Ontario). When they sell that car, they won’t be on the permit; thus, their title was “jumped.”
This can be super problematic for the previous seller. If that car gets reported for a crime or hit and run, the previous owner will still be the registered owner.
Both of these practices are illegal and can leave you in a tough if you get tricked by them. Messing with the odometer also makes you think the car is in better shape than it is and is also illegal.
What is a Car Title?
So what is a car title? In Ontario, a car title is your proof of ownership and is usually called a permit. It has all the relevant info on it.
When it comes to financial transactions involving your car, it helps to have someone you can trust. At Fast Action, we’ve been serving the Greater Toronto Area and Ontario for decades. For inquiries or more information, don’t hesitate to contact us today.