The Importance of VIN VerificationHere’s another way that scammers can sell you a bad vehicle, even if you do your due diligence and check out the VIN number. But it’s also a reason why DMVs sometimes require Vin verifications or inspections—it’s to protect you, not just to give you a hard time.
A Case in TexasHere’s a case where a person in Texas purchased a vehicle. They checked out the VIN number, ran a background check, did a VIN search and VIN history report, and everything looked okay. But as they found out, the VIN number they were looking at wasn’t the real VIN number for the vehicle. There was a replacement VIN number that was improperly put over the real VIN number.
Multiple VIN locationsOn a vehicle, there are at least eight or nine VIN numbers. There’s one on the cow on the dashboard, many on the frame, some hidden, some on the doorpost, some on the inside of the B pillar, etc. They’re all supposed to match. Many times, people just look at the one on the cowl by the dash, but there’s other VIN numbers. A person trying to conceal a vehicle will normally only change the one on the dash because that’s what’s looked at. There’s even some that are hidden that nobody knows about except for police officers. If a car’s stolen and somebody hides all the visible ones, they know where to look to find the hidden ones.
Verifying the VIN numberThe OBD plugin for the diagnosis of a vehicle also shows the VIN number, so you want to check that to make sure the computer matches. Otherwise, you could buy a vehicle that you think has a certain VIN number, and really, it’s a stolen car, or even if it’s not stolen, it could be one that’s salvage or parts only or for export only, which means you can’t title it.
Legal Implications of VIN TamperingRemember, it’s illegal to move VIN numbers from one vehicle to another. So, if you have a vehicle for which, for some reason, the VIN number is no good because it’s salvage or parts only, don’t think you can just get another VIN number and slap it on there. There are very serious federal statutes about VIN tampering that make that a big no-no.
Using Consumer ResourcesIf you have questions about how to make sure your vehicle has a proper VIN or if the history of that vehicle is eligible for a title, make sure you use our website as a free consumer resource. We’d be glad to provide help and assistance to improve your odds of getting the right kind of vehicle.
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Car dealerships operate under a finance agreement called a floor plan or a floor line. This means that all the cars on a dealer’s lot are usually financed with a line of credit arranged by the dealer to hold their inventory.
Why Title Ownership MattersWhen you purchase a vehicle from a car dealer, receiving the title is crucial. However, sometimes dealerships don’t have the title to transfer to you immediately because it’s held by a finance company until the car is paid off.
Potential Issues with Title TransferIf a dealer doesn’t promptly pay off the car’s financing after selling it to you, the finance company retains the title. This situation can lead to complications, leaving you with a vehicle you paid for but can’t legally own.
Case Study: Dealer’s DefaultA recent case illustrates this problem. A dealership sold cars without paying off its line of credit with the lender. As a result, several customers couldn’t obtain titles for their purchased vehicles.
Legal Remedies for ConsumersConsumers facing this dilemma have options. They can negotiate with the finance company, file complaints with the dealer licensing board, or seek a court-ordered title.
Court-Ordered TitleIn some cases, courts can intervene to ensure consumers receive titles for vehicles they’ve paid for. By demonstrating proof of purchase and dealer licensing, consumers can compel lenders to release titles.
Case Study: CarMax as a LenderCarMax, a significant player in the used car market, also serves as a lender for dealers. Dealers can finance cars purchased from CarMax auctions, expanding their inventory without immediate payment.
Dealer Default on CarMax LoansHowever, some dealers fail to fulfill their financial obligations to CarMax, resulting in legal disputes and complications for both CarMax and consumers.
Risk of Multiple Floor PlansSome dealers exacerbate the issue by obtaining financing from multiple sources, further complicating the title transfer process.
Navigating Title Transfer IssuesConsumers facing title transfer issues should seek assistance from local authorities, such as magistrates, courts, or the DMV licensing board. Legal intervention can help resolve these complexities.
Seeking legal guidanceFor consumers grappling with title transfer problems, legal consultation can provide guidance on navigating these challenging situations effectively.
What Does “Export Only” Mean?One common inquiry our sales department receives revolves around vehicles labeled with an “export only” title. These vehicles often appear on platforms like Copart or IAA, sparking confusion among buyers. While they may bear the label “clean title export only,” it’s crucial to understand the implications behind this designation.
The Export Only ConundrumMany assume that a “clean title export only” vehicle is in good condition since it carries a clean title. However, the reality is quite different. The “export only” designation indicates that the vehicle can only be utilized for export purposes, not for domestic use. But why label it as “clean title export only”?
Deciphering the LabelThe distinction is necessary due to regulatory constraints. Customs regulations prohibit the export of salvage or junk vehicles in one piece. Attempting to export such vehicles would result in rejection during inspection. Hence, insurance companies use the “export only” label to facilitate the removal of vehicles from the country’s market.
Navigating the RestrictionsWhile these vehicles may have clean titles, they cannot be titled or registered within the US. Every state, including Guam, Puerto Rico, and Washington DC, prohibits their registration. Despite appearances, attempting to title such vehicles domestically will lead to rejection by the DMV or similar authorities.
The Pitfalls of Export Only TitlesBuyers must be wary of the implications of purchasing vehicles with “export only” titles. Despite aspirations to register them domestically, these vehicles are bound for export only. Attempting otherwise could lead to complications and legal hurdles.
Challenges for ExportersEven for exporters, navigating the export of salvaged or junk vehicles can be arduous. Customs regulations often necessitate dismantling vehicles into component parts for export. This process can be time-consuming and financially burdensome.
Beware of Salvage TitlesEven salvage titles may pose challenges for exporters. Despite appearing salvageable, some vehicles may be designated as “parts only” in federal records. Exporters should exercise caution when considering salvage vehicles for export.
ConclusionUnderstanding the nuances of “export only” titles is essential for both domestic buyers and exporters. While these vehicles may seem appealing, their limitations can lead to significant complications. It’s crucial to thoroughly research and comprehend the implications before engaging in any transaction involving such vehicles.
Dealing with lean releases from banksOkay, we’ve said it a million times on our YouTube channel, but remember that lean releases from banks are very, very difficult if you have a vehicle that you’ve paid off and you need to get a title. Sometimes that process can be very overwhelming and bureaucratic. This is an article about a woman who had problems with a bank called Ally, and they also mentioned another bank called Santander. Again, it’s not necessarily about these banks; this extends to a lot of banks.
What happens is that when you have a vehicle that you have a loan on while you’re making payments, your vehicle title looks like it’s being held by the bank, and they don’t give it to you because they don’t want you to sell that vehicle while you’re still making payments on it. They want to make sure that you’re not going to sell it to somebody else and then walk away from your loan. So, they hold your title.
Now, when you make your last payment, they stamp it as paid, and they mail you your title. The problem is, with hundreds, thousands, and sometimes millions of vehicles on the road, banks don’t have a very clear way of keeping track of all those titles. Imagine all the file cabinets they have to keep with all these titles in them. So, it can become a little bit unwieldy.
What happens normally is that when they mail you that title at the end of your loan, they just stamp it paid, mail it to you, and they’re done. However, what they don’t do is remove it from your title record. So, at the DMV or Secretary of State, whatever agency in your state has title records, it’s still going to show a lien even if you paid it off. And this person ran into a lot of difficulty trying to get that from the lender.
One of the mistakes they made, and we’ve talked about it here, is trying to deal with them by phone or by email. You don’t want to do that; you want to do it in writing, by mail. Even if you have to get an envelope and a stamp and send it, you will have much better success.
Let’s see what happened to this woman. It starts out with her paying off their 2022 Jeep Compass, and they said that the bank said that they would have a title mailed to them within 10 business days. That deadline passed, and a request would be sent to the title company. The bank is supposed to do this, not a title company.
They called the title company, and the title company bounced them back to Ally. It was like ping pong back and forth, and Ally Bank said there’s nothing it could do other than place another request. So, they bounced it back to the title company. Remember, titles are a government document; they’re not anything a company can print or create on their own. It’s like money; it comes from the government.
After all that time, they still didn’t put the request in. But again, if you look at it, they talked about how they kept calling them, not in writing. Right, the way you want to do this is in writing. If you do it in writing, now there’s documentation. And the other part is that now they do some of the work for them.
Here’s another fail from this story. The bank told them that their title may be in her account documents online. Well, that’s false. The title is not online. A copy or printout of a title is not good. The only thing you can have is the original.
Ally Bank then told them there’s no further information when the title will be released, and sure, they complained to the Better Business Bureau, and they did some things, but you know, the Better Business Bureau really isn’t any official government agency. They’re just a company that charges members money to become members. That’s how they become accredited. So, there’s not much they can do.
Persistence pays off.
Transitioning to Electronic TitlesEvery year, we have discussions with directors, assistants, and commissioners from various Department of Motor Vehicles (DMV) offices across the country. They provide insights into the world of vehicle title and registrations in the public sector. Currently, the theme revolves around transitioning to electronic digital titles, although this shift may take a few years.
Ensuring Compliance and Combating FraudAnother prominent theme is ensuring that title and registration applicants comply with regulations. There has been a significant focus on combating fraud, addressing loopholes, and closing back doors that have been exploited over the past decade.
Impact of COVID-19 ExceptionsCOVID-19 brought exceptions to title regulations in 2020 and 2021, including adjustments to inspections and documentation requirements. However, these temporary measures are being revisited as the situation evolves.
Official Recommendations for Court Order and Bonded TitlesDMV offices are increasingly providing official recommendations for court order titles or bonded titles. This includes advising clerks at satellite branches to discuss these options with applicants.
Salvage and Partson TitlesThere’s a notable shift in handling salvage and partson titles, especially concerning cars sold by Copart or IAA. These vehicles are primarily intended for automotive businesses and auctions rather than the general public.
Safety Inspections and Coordination between StatesDMVs are now conducting more meticulous inspections to ensure salvaged vehicles meet safety standards. Additionally, there’s a growing trend of coordination between states to share data and streamline processes, aiming to prevent individuals from evading regulations by moving between states.
Importance of Proper Title ProceduresA title isn’t just a piece of paper; it’s a legal document confirming vehicle ownership and value. DMVs must ensure that titles are issued correctly to prevent disputes and uphold the integrity of the system.
Upcoming Conversations and UpdatesFurther conversations with DMV officials are planned for the end of summer or early fall. These discussions will provide further insights into evolving developments in the world of vehicle titles and registrations.
ConclusionNavigating the world of DMV procedures can be challenging, but it’s essential to understand the significance of proper title issuance. Stay tuned for more updates on DMV developments as they unfold in 2024.
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