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When you buy a car with a loan, the bank holds the title until you fully pay off the loan. Although the bank technically owns the title, you are the actual owner of the vehicle. This means that your insurance covers you as the driver, not the bank. You have the right to sell or refinance the car while the loan is active. The arrangement with the lender allows you to maintain ownership rights despite the bank holding the title. Once the loan is paid off, the bank sends you the title, confirming that you are now the full owner of the vehicle.