When Financing a Car, Who Has the Title?


Your car title is an important document that names the legal owner of the vehicle, as well as the VIN and lien holders. If you have a loan, your lender will most likely hold the title until you pay it off.

Here’s what you need to know about car titles during car financing, including how to get a copy of the title if your lender has it.

Looking for a car loan that works for you? Easily compare lenders below.

Your one stop shop for comparing car loans.

Enter your information to see your auto loan options.

Who has the vehicle’s title during financing?

When your car is financed with a loan, the lender will usually retain the title until the loan is paid off. Only at that point do you become the legal owner of the vehicle. Because your lender technically owns the car until the loan is paid, you usually don’t get the title until the loan is cleared.

However, in some states, the driver is allowed to keep the title while they pay off the loan. These are called non-title holder states. But even if you live in a state that doesn’t hold title, the lien holder’s name will still appear on the title as the legal owner.

Here is the states which allows you to own the physical title with a lien:

  • Kentucky
  • Maryland
  • Michigan
  • Minnesota
  • Missouri
  • Montana
  • New York
  • Oklahoma
  • Wyoming

How to get a copy of your car title

The process of obtaining your car title depends on whether you have paid off the loan or whether you are still making payments. Here is a brief look at the process for both situations.

When your loan is paid off

Once your loan is paid off and you have no balance, you become the legal owner of the vehicle. At this point, the lien holder will be removed from the title and your name will be added as the owner.

If you live in a non-title holding state, the lender will send you a notice confirming that the loan has been paid off. You will also receive an official release of lien letter. It is your responsibility to bring that letter to your DMV or city clerk’s office, along with the current title, and apply for an updated title. Once the application is submitted, you can expect to receive the updated title within one month.

If you live in a titleholder state, the notification process is different.

For states that use the Electronic Lien and Title (ELT) system, the lender will notify your state’s DMV directly, who will send you the updated title. There is no need to visit the DMV in person or submit a new title application. However, it usually takes about a month to get the title in this case. Most lenders will wait a few weeks after your final payment is settled before notifying the DMV.

If your state does not use the ELT system, you will likely receive the title from your lender with the release of lien form in the mail. Then you will go to the DMV and apply for an updated title.

When you are still paying the loan

If you are still paying off your car loan, you do not legally own the vehicle, even if you live in a non-title state and own the title.

The only way to obtain your car’s title with your name as the legal owner is to pay off the remaining balance you owe. If you can afford to pay off the rest of your loan in a lump sum, contact your lender and ask for the payoff amount. This will be different than the current balance because it includes additional fees.

If you plan to keep your car until the loan is paid off, you don’t need to get the title. But if you want to sell the car before it’s paid off, you’ll need the title to complete the transaction. You can sell your vehicle and use the profits to pay off the loan, get the title and transfer it to the new owner.

However, this only works if you have positive equity in the car, meaning you owe less than the car is worth. If your profit is not enough to cover your loan balance, you will need to find another way to make up the remaining amount.

Head shot by Elizabeth Rivelli

Finance & Insurance Editor

Elizabeth Rivelli is a freelance writer with over three years of experience covering personal finance and insurance. She has extensive knowledge of various lines of insurance, including auto insurance and property insurance. Her byline has appeared in dozens of online finance publications, such as The Balance, Investopedia, Reviews.com, Forbes and Bankrate.