In 2020, borrowers refinanced their car loans earlier into their term, the lowest since 2013. Last year was a big year for auto loan refinancing. Nearly all states registered more auto loan refinance applications, and 16% more Americans applied for refinancing in 2020 compared to 2019. Borrowers also chose…
One of the things that sets RateGenius apart from other lending platforms is that we take care of the entire auto refinance process. From start to finish, we facilitate each phase so that you don’t have to. One of the most complicated, critical, and lesser-known portions of the auto refinance process is titling.
Though we’re car title experts, sometimes our customers understandably have questions about the process or perhaps feel a bit perplexed. Because the difference between vehicle title and registration documents are often confused, and because we’re always here to help, we break it down for you.
Car Title vs. Registration
Though registrations and titles are both issued by government agencies, they serve two different purposes and are governed by each state’s rules and procedures.
Titles are legal documents declaring either a person or a lien holder as the legal owner of a vehicle. When purchasing a new car, dealerships will typically handle the titling process for you. However, when refinancing a car loan, the lien holder changes, requiring the vehicle title document to reflect that change.
In some states, the vehicle title will be issued to your lien holder until the lien is fully paid off. In other states, car titles are issued to the registered owner/operator regardless of the presence of a lien.
Registrations are essentially documentation by your state’s tax office validating that your vehicle has been cataloged in their system and determined as roadworthy. Though each state has different requirements, most states require all vehicles to pay a tax or other fees, pass an inspection, have car insurance, and have a licensed driver declare him or herself as the main owner, typically with a title. Registered vehicles are issued a license plate and other documentation, depending on the state.
Title, Registration, and Auto Refinancing
Both the vehicle title and registration are required documents for the auto refinance process, but RateGenius only facilitates title changes.
Though we love to help as much as possible, RateGenius only facilitates the update of your vehicle’s title. The title is the only document that must be updated when refinancing a car loan; registrations typically do not require updates unless they soon expire, you move out-of-state, or you no longer wish to have another driver connected to the vehicle. However, at the time of titling, it is important that your registration is current, as registration issues can delay the title process.
Before refinancing a car, make sure your vehicle registration is in good standing.
In order to complete any title process, registration must be in good standing. The most common reasons why a registration would not be in good standing are:
- Toll violations
- Parking tickets
- Unpaid taxes
Having registration issues can severely delay the title process, thus delaying the final completion of your auto refinance loan.
Refinancing your auto loan doesn’t have to be complicated. We do our best to ensure that saving money with us is quick and easy, and the titles phase is no exception. If you have any more questions about the titles phase or about auto refinance, contact us.