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Clean Title - Clear Title |
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The term clean title or clean title is used to refer to an automobile title that is free of liens and is not a salvage title. When someone purchases a car with a loan, the title is held by the loan company or bank, even though it is issued in the name of the buyer by the state Department of Motor Vehicles (DMV). The loan company or bank is known as the "lien holder" and the title is marked in a way that clearly indicates that the vehicle is subject to a financial obligation. In this case, the title is not a "clean" title. When a buyer pays off his loan, the loan company or bank sends the title, still marked as "subject to lien" to the buyer with a letter indicating that the loan has been paid off. The buyer can then take the title and letter to the state DMV to get a new "clean" title. If the buyer is selling his vehicle, he can sign over the "subject to lien" title with the bank letter to the new buyer. The new buyer can then get a new title in his name. A vehicle with a salvage title is one that has been declared a total loss by an insurance company because it has been wrecked or damaged in a flood. A salvage title indicates that a vehicle is not considered safe to drive. In most states, vehicles with salvage titles can be restored or repaired to safe operating condition and a new clean title can be obtained. Some such cars have minimal damage and can be easily repaired. See Repairable Wrecked Cars for more information. For more information,
see: The Lease Guide
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