In the United States, the certificate of title for a vehicle (also known as a car title or pink slip; or pinks in the plural) is a legal form, establishing a person or business as the legal owner of a vehicle. Vehicle titles in the U.S. are commonly issued by the state DMV.
While not standardized from state to state, the certificate of title normally specifies:
When a vehicle is financed, the certificate of title is normally held by the lender, who must release it to the purchaser once the balance is paid off. In some states, the transferred title is sent directly to that individual, but the name of the lender or lienholder appears on the title as well. In order to release the lien upon full payment, the lender sends a notarized release or other complementary document to the individual.
When a car is sold from one owner to another, the title must be transferred to the new owner. This is achieved by requesting approval by the state DMV.
The name "pink slip" is a reference to California certificates of titles before 1988, when they were pink; current California titles have broad vertical stripes of teal, yellow, and pink with a green border; while Illinois titles are blue, pink, and blue with a purple border; and Pennsylvania titles are blue with a blue border.[1]
Many illegal street races of the 1950's, glorified in movies, featured racing for vehicle titles, henceforth the popularity of the term "racing for pink slips," and the 2005-08 Speed series Pinks was developed from it.
In the United Kingdom, there is not an equivalent of a vehicle title. Instead, there is a document known as the 'vehicle registration document', and is issued by the Driver and Vehicle Licensing Agency (DVLA). The current version has the reference number V5C. Prior to computerisation, the title document was the 'log book', and this term is sometimes still used to describe the V5C. The V5 document records who the Registered Keeper of the vehicle is; it does not establish legal ownership of the vehicle.
Vehicle titles are also used for car title loans, where a lender will loan the car's owner money in return for keeping the car title until the debt is paid off. Car title loans are marked by high interest rates, a short time to repay the loan, and the loan amount is usually less than the car's monetary worth. Also the borrower risks losing the car to the lender if the loan is not paid back. These type of loans are marketed as small emergency loans.