It is confusing when you move from a Lien State to a Title State.
When I was growing up in New York, if you bought a car, you got the title to it, unless it was made before a certain date - those cars had only a registration. If you had a loan on the car, that might appear on the title as a lien, and when you paid off the loan, you went to the DMV and got the lien released and a new Title printed up without the lien appearing on it.
So imagine how surprised I was to move to Virginia and find that (a) my 1968 Chevrolet would require a title, which in turn would require a bill of sale from my deceased Grandmother (don't ask how we got one) and (b) if you had a car loan, the loan company would keep the title until you paid off the loan.
In some ways, it made sense - if the loan company kept the title, it meant you couldn't sell the car without their permission. It also meant that if you had "title in hand" it mean you owned the car free and clear - which is why you see that phrase on some car advertisements on the Internet. If you were raised in a Lien State, well, that phrase made no sense. Of course you have the title in hand - if you own the car, loan or no loan! The phrase meant nothing in New York!
Of course, there are problems with the Title State theory. I had some car (and RV) loans through my credit union, and in most cases, when the loan was paid off, they would discover they misplaced the title, and a new title would have to be ordered from the DMV (or as they called it there, the MVD, just to be contrary).
In Ohio, they call it the BMV, which sounds like a brand of underwear. And there, too, people have problems with lost titles from lenders and grouse about having to pay title fees. Some lenders electronically release leans - communicating directly with "BMV" computers to release liens. The car owner still has to get a new title printed out with the lien removed, often at their own expense.
But why do we have titles to motor vehicles at all? At one time in this country, there was no such thing - in fact, in my lifetime. When I was young, most of the junker cars I owned had no titles, just a registration. The registration was proof of ownership back then, and in some States, such as California, would be printed on a pink piece of paper - hence the term "pink slip" referring to ownership of a car. Street racers would "race for pinks" meaning the loser would lose his car if he lost the race. Sounds dramatic, but then again, back then in post-war America, kids would hop up old junker pre-war cars that could be bought for as little as $50, using parts from a junkyard, which may or may not have been paid for.
She's got a competition clutch with the four on the floor
And she purrs like a kitten till the lake pipes roar
And if that ain't enough to make you flip your lid
There's one more thing, I got the pink slip daddy
"Little Deuce Coupe" - the Beach Boys.
[Note: Some claim that the correct lyric is "big slip daddy" referring to a positraction or limited-slip differential. However, I have never heard of "posi" being referred to as "big slip" and the Beach Boys refer to it in "(She's so fine) My 409" as "My dual-quad four-speed posi-traction 409!"]
The problem back then was, car theft. People decry many of the laws and regulations established in the 1960s - particularly the Motor Vehicle Safety Act of 1966 which established such radical requirements as lap belts and padded dashboards and instrument knobs that wouldn't impale you. Pretty quaint, in retrospect, looking back from an era of six or more airbags. But it was a start.
America put all its eggs in one basket, and that basket was labeled "motor vehicles." And quickly we realized what an expensive basket it was. Cars killed 40,000 people a year. They polluted the air to the point it was unsafe to breathe. They used up a lot of fuel. And they cost a lot to buy, repair, and insure.
The latter was the motivation behind five-mile-an-hour bumpers. Back then, a car had thin metal bumpers that would dent or bend with the slightest impact. A new car, driven and parked in the city, would look like crap within a few years. No problem - GM will sell you a new one! But people got tires of shelling out a few grand every year just to get around. And insurance! Between the accidents and the auto theft, it was murder.
Back then, cars had simple keys and could easily be "hot wired" and stolen in a matter of minutes. Since national databases of car registrations were non-existant, it was easy to register a stolen car in another State. It was a big business. Enter VIN numbers, attached under the windshield with tamper-evident fasteners, so they were easily visible and hard to remove. Also enter State Car Titles - separating the ownership of the car from the registration. In some States, titling and registering a car are done at the DMV (or MVD or BVD or whatever). In others, such as Georgia, you get your license at the MVD, but register and title your car at the County Tax office - which provides the government with a neat opportunity to collect taxes and fees - today a one-time "title fee" of 7% of the purchase price.
The idea was, if it was harder to steal and re-sell cars, car theft would decline, and thus the cost of car insurance would decrease. Since our nationwide transportation system was tied to the automobile, we had to make automobiles affordable - as well as safe and pollute less. These "regulations" - many of which Trump has tried to subvert - have insured the survival of the auto business, even as many in the industry fought them, initially. Today, many car manufacturers realize that these regulations keep them in business, as without them, well, people might seek out transportation alternatives.
Of course, it is still possible to steal cars. Even the most sophisticated system of smart keys and fobs and immobilizers and whatnot can be defeated by a simple flatbed tow truck. No one pays attention to wailing car alarms anymore. And with the high cost of car repair, a car may be more valuable as parts than as a car to re-sell. In the (original) movie Gone in 60 Seconds, in the opening sequence, they buy a wrecked car at auction and then steal one just like it. Within a few hours, they have swapped out the VIN number plate, replaced the build sheet under the driver's seat, and even changed out the engine (which has a serial number of its own) and voila! A late-model, low-mileage car that cost nearly nothing.
Today, parts can be pulled and sold individually. For high-end cars, body parts, engines, interior pieces, electronic modules, and even trim pieces, can command high dollars. A stolen car essentially costs nothing, and if you can sell $20,000 worth of parts off of it, well, so much the better - and far less risk than trying to sell the car itself. To combat this, car manufacturers are putting VIN numbers on "crash parts" such as hoods, doors, and even etched into windows. Car electronics often have serial numbers electronically encoded - which require proprietary software to enable them with the rest of the vehicle components. It is getting harder, but not impossible, to "part out" a stolen car.
And like with the cell phone business, a stolen phone often means a new phone sale - which is one reason why the telcos and phone manufacturers resist the simple idea of a nationwide (or worldwide) database of stolen phone numbers - or electronically disabling stolen phones. A stolen car means a new car sale - a stolen phone means a new phone sale. No wonder car manufacturers fought these anti-theft regulations.
But I digress... The point is, car theft is what lead us to titling vehicles, and how we got to where we are today. A nationwide database of car titles, based on VIN numbers, allows us to track vehicles, and even their accident and repair history (and even oil changes, in some cases!) using services such as CarFax. No longer does crossing State lines mean a stolen car has a new life.
If you were born after 1970, the concept of not titling a car may be alien to you. Maybe utility trailers and small boats might not be titled in your State, but pretty much everything else is. And if you move to a "Lien State" such as New York or Maryland, you may be surprised when they hand you the title to your car, even if there is a lien on it - and equally surprised, as I was, moving away from New York, then they took the title away, until I paid off the loan.