Do You Get a Title When You Finance a Car?

Do You Get a Title When You Finance a Car?

When you’re in the market for a new car, whether it’s a shiny, brand-new model or a reliable used vehicle, you have various options for financing. One popular financing option is Smart Auto Care, which offers extended warranties and other benefits to car buyers. So, if you’re considering financing your car through smart auto care, you might be wondering, do you get a title when you finance a car? In this article, we will delve into the world of car financing, titles, and what you need to know before driving your dream car off the lot.

Understanding Car Titles: Finance a Car

Before we get into the specifics of financing a car, let’s clarify what a car title is. A car title is a legal document that establishes ownership of the vehicle. It contains essential information about the vehicle, such as the make, model, year, and Vehicle Identification Number (VIN). The person whose name appears on the title is the vehicle’s legal owner.

Title Ownership in Cash Purchases

When you purchase a car outright with cash, the title is transferred immediately to your name. However, if you are considering other options to finance your car, it might be worth exploring car finance ideas at This means you become the sole owner of the vehicle, and the title will be sent to you, usually within a few weeks after the purchase.

Title Ownership in Finance a Car

The scenario changes when you decide to finance a car. Car financing involves borrowing money from a lender, such as a bank, credit union, or dealership, to purchase the vehicle. In this case, the lender has a financial interest in the car until you pay off the loan.

Title Ownership: Finance a Car

Titles and Auto Loans

When you finance a car through an auto loan, the lender retains the title until you’ve paid off the loan in full. This is a common practice to ensure that the lender has collateral in case the borrower defaults on the loan. It’s important to note that even though the lender holds the title, you still have possession of the car and can use it as you normally would.

The Process of Obtaining the Title When Finance a Car

So, do you get a title when you finance a car? The answer is yes, but there’s a process involved.

Step 1: Loan Approval for Finance a Car

When you secure an auto loan for your car purchase, the lender will work with you to complete the necessary paperwork. This includes the loan agreement and, in some cases, a power of attorney form that allows the lender to hold the title.

Step 2: Title Transfer

Once you’ve completed the loan agreement, the lender will hold onto the title until the loan is fully paid off. At that point, the lender will transfer the title to your name, and you will become the sole owner of the vehicle.

Step 3: Receiving the Title

After paying off the auto loan, you should receive the title in the mail from the lender. It’s crucial to keep this document in a safe place, as it serves as proof of ownership for your vehicle.

Benefits of Finance a Car

While it may seem like a minor inconvenience to have the lender hold the title temporarily, there are several benefits to financing a car:

  1. Affordability: Financing allows you to spread the cost of the car over time, making it more affordable than paying for it all at once.
  2. Credit Building: Timely payments on your auto loan can positively impact your credit score, helping you build a strong credit history.
  3. Flexibility: Car financing gives you the flexibility to choose a vehicle that might be slightly out of your budget if you were to pay in cash.
  4. Ownership: Even though the lender holds the title, you can still enjoy the benefits of ownership, such as personalizing the vehicle and using it for your daily needs.


When you finance a car, you do get a title, but it remains with the lender until you’ve paid off the loan. In addition to securing your legal rights to the vehicle, implementing tips to boost fuel efficiency and save on gas can help you maximize your ownership experience. While it may seem like an additional step, car financing provides numerous benefits, making it a popular choice for many buyers.

Now that you have a better understanding of car titles and financing, you can make an informed decision when you’re ready to purchase your next vehicle.


  1. Can I drive the car even if the lender holds the title?

Yes, you can drive the car and use it as you normally would while the lender holds the title.

  1. What happens if I default on my auto loan?

If you default on your auto loan, the lender may repossess the vehicle as collateral for the unpaid debt.

  1. How long does it take to receive the title after paying off the auto loan?

You should receive the title from the lender shortly after paying off the loan, usually within a few weeks.

  1. Can I sell the car while the lender holds the title?

Selling the car may be more complicated while the lender holds the title, but it’s possible with the lender’s cooperation.

  1. What should I do if I lose the title after it’s transferred to my name?

If you lose the title after it’s transferred to your name, you can typically apply for a duplicate title through your state’s Department of Motor Vehicles (DMV).

George Ogutu

George Ogutu is a budding Auto-Tech Writer, Blogger, and Editor with a knack for green tech, which is why electric vehicles make him tick.

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