An open car title describes a title that is signed by the listed owner, but not the purchaser. This is known as "title jumping" and is illegal in most states. Many states even require that buyers re-title a purchased vehicle within a certain number of days. Follow your state's rules when it comes to transferring vehicle ownership.
Determine your state's requirements and learn which paperwork you need from your seller before purchasing a vehicle. Go to your state's motor vehicle website to review the title transfer process and print any necessary forms. Visit or call the DMV, if you prefer. You may find that you need the titled owner's signature notarized, or that the seller must sign additional forms. If the title of the vehicle you want to purchase is in someone else's name, you won't be able to transfer the title without locating the properly titled owner.
Open Title from Dealers
Do not purchase a vehicle with an open title from a dealership. Dealerships must follow specific state rules and requirements, which protect buyers from problems like odometer fraud and the lemon law. Different rules apply to dealers, however. If you do accept an open title from a dealer, you won't have any recourse if the vehicle has problems. Most states offer some form of protection or recourse for used car buyers, so don’t allow a dealership to eliminate its responsibility.
Review the car's title. Some states require that the vehicle's sales price be documented on the title, so make sure that the selling price is correct for tax purposes. Ask the seller to sign his name in front of you or at a state DMV where you can complete the ownership transfer. Obtain a bill of sale from the seller, which should list the owner's name, driver's license number, vehicle information and sales information. This can protect you from any problems that might occur when you try to title and register your newly acquired vehicle.
If the vehicle you're purchasing is actually listed as a salvage, flood or fire vehicle, you won't know until you attempt to re-title the car. The original owner may have passed on the title to avoid letting a buyer know that the vehicle's title is unsatisfactory. If the new owner didn't transfer the title, you may find out when trying to register or insure your car. If you find out the vehicle has a mechanic's lien or other documented lien holder, you'll likely face problems when trying to get your seller to pay for the vehicle's lien.