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When you buy a car with a loan, the bank holds the title while you retain ownership until the loan is paid off. For example, if Josh has a car loan, he does not possess the title, meaning the bank is technically the titleholder. However, he is the actual owner and can sell or refinance the car. The insurance covers Josh as the driver, not the bank. Once the loan is fully paid, the bank sends the title, and the agreement transitions from a sale agreement to full ownership. This structure applies broadly to car loans.