Vehicle Ownership: What Everyone Should Know

Each time a seller signs the title to release the ownership of a vehicle, the new owner must take the signed title to a Department of Motor Vehicles (DMV) office, and the state will issue a new title and registration, as well as keeping both the old title and the new title on record. The title includes:

• The Vehicle Identification Number (VIN);
• The date on which it was sold for the first time;
• Description of the vehicle (year, make, model);
• Information about the owner (full name and address).

• Clean title – for cars that have never been deemed a complete loss or have never been in a reported accident.
• Clear title – for motor-vehicles that were once considered "salvaged" but have been repaired and passed a state vehicle inspection to receive the clear title.
• Lemon title - usually given when numerous dysfunctional parts can't be fixed, making the vehicle unsafe to operate.
• Salvage title – for automobiles that have been either extensively repaired, stolen, or have sustained damage beyond 75% of their original value.
• Bonded title – frequently chosen as a last resort for cars with major discrepancies in the initial proprietorship documents.
• Flood or water damage title - involves serious electrical or mechanical issues caused by severe floods or thunderstorms. 
• Rebuilt or reconstructed title – regularly issued by a licensed rebuilder, collision center, insurance company, or car body shop to salvage vehicles that have been completely repaired, being considered fit for the road and safe to drive again.
• Odometer rollback title – a car gets this title if someone unlawfully tried to tamper its odometer reading and lower the high mileage to raise the selling price.
• Junk or dismantled title – for severely-damaged cars that could never become roadworthy again. As no repairs could reinstate them, in general, they're sold to junkyards for their parts or as scrap metal.
• Lien title – when the car's registered titleholder doesn't really own the car because they still owe money on the car loan, therefore the lender has rights over the vehicle as well.

Unpaid liens show up on a credit report for 10 years after filing. After it's been paid off, the released lien could still stay for up to 7 years on the credit history.

Removing a lien starts with paying off the car loan or other pending debts linked to your vehicle. Next, the lienholder or the bank must fill in the right section of the motor vehicle title and send it to you. Once received, you have to take it or mail it to a DMV Full Service Office. The lienholder will be removed and you will now have a "clear" title.

In 2019, there were around 284.5 million motor vehicles registered here in the United States, including passenger cars (35%), trucks, motorcycles (3.2%), buses, and other vehicles. Other relevant statistics:

• Between 2001 and 2010 the number of registered vehicles in the US increased by 20%;
• There were 17.2 million new light-vehicle registrations in 2018;
• In 2016, 3 million cars were made in the US (from a total of 70.5 million worldwide);
• In 2018, California was the leading state with 32.1 million vehicles registered (12% of all vehicles registered in the United States).

In 2017, 31.1% of all new car transactions were leased, meaning that 68.9% were being sold outright.

Purchasing a car is almost always better than leasing it unless you:

• Don't plan to drive it for a long time;
• Didn't save enough for a down payment;
• Drive more than 15,000 miles per year;
• Want to drive a new car every 3 years and you can't afford it.

Benefits of leasing include:

• No need for loan approval;
• Not having to go through the hassle of selling the car yourself;
• Typically a manufacturer warranty will help you save on the repair expenses and avoid huge repair costs;
• Avoiding the "upside-down" status when you owe more than your car is worth – for leasing, the monthly payments are linked to the expected depreciation estimated for your lease term only.

Advantages of buying a car:

• It's the cheapest way to own a car over a longer period of time;
• The insurance premiums are normally lower than for leased cars;
• The car is yours and you can sell it or trade it at any time;
• You can change its appearance and accessorize it (leased cars must be kept in perfect condition);
• There's no mileage cap (leased cars have a mileage limit and exceeding it carries substantial penalties).

In a divorce, cars that were purchased during the marriage are labeled "matrimonial property" and will be distributed through the property division process.

If you wish to make cash gifts to friends or family before divorcing you can do so, although it could be a red flag of funneling off funds. It's better to have your spouse's approval beforehand. As soon as the divorce case starts, the court will issue an injunction that won't allow the disposal of any assets.