Congratulations on paying off your car loan – it’s a significant milestone. Yes, it’s owning your vehicle outright—it’s also proof of your financial responsibility and capability.
Managing a car loan and paying it off is a big deal, and it shows that you’re responsible and capable enough to handle financial commitments.
Don’t take that lightly; not everyone can achieve this!
What Happens After Paying Off Your Car Loan?
When your car loan is paid off, a few things happen automatically:
- Lien Release: Your lender, (the lienholder) will electronically notify the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) that the loan has been satisfied. This removes their lien from your vehicle. If you live outside of Florida, and your vehicle is registered in that state, reach out to your local Department of Motor Vehicles for more information on how lien releases work in your state.
- Electronic Title: By default, your vehicle’s title remains in electronic form, stored securely in the FLHSMV’s digital database.
- Paper Title Requests: Would you prefer a physical copy of your title? You can request one through FLHSMV’s online services via the MyDMV Portal or by visiting a local tax collector’s office. Keep in mind, there is a small fee associated with printing a paper title.
Why Keep Your Title Digital?
You might wonder why you’d want to leave your title in its electronic form. Here are a few reasons:
- Security: Electronic titles are safe from being lost, stolen, or damaged, unlike paper titles.
- Easy Transactions: Selling or transferring your vehicle is straightforward with an electronic title since all necessary documentation is accessible online.
- Reduced Title Fraud: It’s much harder for criminals to commit fraud if the title is digital, which protects you in case your vehicle is stolen.
When Do You Need a Paper Title?
Electronic titles are the most convenient option for most people. But there are a few scenarios where you might need a physical title:
Selling or Transferring Ownership Out of State
If you’re selling your car to someone out of state, you'll need a paper title. Or if the buyer and seller can’t visit the DMV together in Florida, a paper title may be required.
Registering Your Vehicle in Another State
If you’re moving and need to register your car in a different state, they may require a paper title.
Personal Preference
Some people simply prefer to have a physical copy of their title for their records.
What Should You Do Now?
Now that your car loan is paid off and your title is in order, you have a few options for what to do next:
Consider Trading In.
Right after you pay off your car loan is often the best time to trade in your vehicle if you’re looking to upgrade. Why? Because your car is likely at its greatest trade-in value right then. So if you’ve had your eye on something newer or better, this might be the perfect time to make a move. You’ve already proven that you can manage and pay off a car loan—why not prove it again with a vehicle that better suits your current wants and needs?
Enjoy Your Paid-Off Car.
On the other hand, you might want to enjoy the financial freedom that comes with not having a car payment. Driving your car for another year or so can give you time to save up for your next vehicle or divert that extra money into an interest-bearing account.
Whether you trade in your vehicle or keep driving it, you’ve got some great options. You’ve proven you can handle financial responsibility, so whatever you decide, you’re ready to make the best choice for your future. And whatever you decide, we're here (and happy) to help.
Congrats on this huge milestone – it’s an amazing feeling to own your vehicle outright!