When financing a car in California, the title ownership can be a bit complicated. Depending on the type of financing you have and the specific circumstances, either you or your lender may possess the title.
1. Traditional Auto Loan: If you take out a traditional auto loan to finance your vehicle purchase, the lender typically holds the title until you’ve fully paid off the loan. In this case, the lender is listed as the lienholder on the title, and they retain possession of the physical title document. Once you make your final payment and the loan is satisfied, the lender will release the lien and transfer the title to your name.
2. Dealer Financing: If you finance your car through the dealership, they may handle the titling process on your behalf. In this scenario, the dealership will typically be listed as the lienholder until you pay off the loan. Once you’ve completed the loan payments, the dealership will release the lien and transfer the title to you.
3. Lease: If you lease a car rather than finance it, the lease company will usually hold the title throughout the lease term. Since you don’t actually own the vehicle while leasing, the title remains with the leasing company. At the end of the lease term, you have the option to purchase the vehicle, at which point the title will be transferred to you.
It’s important to note that regardless of who holds the physical title, you are still allowed to drive the vehicle and use it as your own as long as you continue to make the loan or lease payments. The possession of the title does not affect your ability to use and enjoy the car.
If you decide to sell the vehicle before paying off the loan, the process becomes a bit more complex. In this case, you would need to coordinate with your lender to pay off the remaining loan balance and obtain the title from them. Once you have the title in your possession, you can proceed with the sale of the vehicle.
When financing a car in California, the title ownership can vary depending on the type of financing you have. Whether you or your lender holds the title, you are still allowed to drive and use the vehicle. If you choose to sell the car before paying off the loan, you will need to work with your lender to obtain the title and complete the sale.