Financial Planning for Generation X & Y Women
 
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Expert Q&A Archive

10/31/2007
Do I need a new title when I pay off an automobile loan?
Several months ago I paid off my truck loan. The bank mailed me the title on which they signed off on the loan, with a letter stating that I could apply for a new title to the vehicle which would remove the name of the bank altogether. Do I need to get a new title before selling this vehicle? Location is Texas.
Harriet Smartt:
expert info »
If you are residing in TX, and the loan was made and cleared in TX, then you do not need to reapply for another title. If moving to another state, then yes, you would need to apply for a new title in that state. Hope this answers your inquiry.
Bettye J. Banks:
expert info »
You should get a clear title on the vehicle. Go to your county records office and show them the information from the bank. This removes the bank's name and makes your life a lot easier should you decide to sell.
I personally live in Texas and paid off a truck loan, but since I have no intention of selling my 1995 Dodge RAM (with under 75,000 miles), while I do retain the title (it serves as proof of pay off), I did not bother to change it. It depends on whether or not you intend to keep or sell the vehicle. I plan to drive mine until it falls apart.