Hey I am using Adobe Premiere Elements and I want to add an image without it having a square border like most photos have.

For instance, say you have a normal image of a car, I want to put the car on top of the video but I only want the outline of the car and not the square 'rest' of it.

Its like say I want to make a circular watermark in the corner? How can I create an image that isnt a square?

I believe the term "mask" may describe what you want. You want a mask to hide everything except the car. The rest of the image becomes transparent.

I am not sure about Adobe PE, but there are 2 common ways used by software.

a) Some programs let the User draw the outline of the mask by freehand.
b) Some programs can import Images where the mask information is contained within the Image file. Of course, this requires a separate Graphics program to create these.