The Vermont title loophole, also known as the Vermont registration process, is a method for non-residents to obtain a title for a vehicle that is 15 years old or older using a bill of sale as proof of ownership. Vermont residents are able to use this method as well, but Vermont is the only state to allow non-residents to apply for a title in their state.
In Vermont (a non-titling jurisdiction), vehicles 15 years old or older are eligible only to receive a registration. In most US states, an owner cannot apply for a title without having the original title signed over to them. A vehicle’s title and registration are two separate documents. If the prior owner is unable to be found or has lost the title, this can present serious problems in your application process in your state. By using the Vermont title loophole, you can apply for registration in Vermont and use that registration as proof of ownership equivalent to a vehicle title and transfer it to a title in your state.
To use the Vermont title loophole, you don’t have to ever take your vehicle physically to Vermont. However, this doesn’t mean that you can get a title for any vehicle or parts using this method. The vehicle must meet all of the qualifications of an operable on-road vehicle and cannot be in the NMVTIS database. The VIN verification process is used to assist this requirement as the verifier can check the VIN against the NMVTIS database upon inspection.
According to the Vermont Department of Motor Vehicles (DMV), applicants often make mistakes when filling out the VD-119 form for vehicle registration. Many applicants select “New Title” rather than “New Registration” in Section 4 of the form, which is incorrect. Vermont is a non-titling jurisdiction for vehicles 15 years or older, so the title is not required at that time. For vehicles using the Vermont title loophole, the registration is equivalent to a title. We recommend that this form be typed and double-checked for accuracy and completeness before submitting it to the Vermont DMV. Applications that are typed and complete are more likely to be approved and processed quicker than handwritten applications.
A VIN verification is a process whereby an authorized agent physically inspects the vehicle’s Vehicle Identification Number (VIN) to confirm that the VIN on the vehicle matches the VIN on the application. If your vehicle is a motorcycle, then a VIN verification will always be required. A VIN verification can be performed by any state agency such as the state police, a DMV investigator, or another authorized agency. For non-motorcycle applications, we recommend that you include a VIN verification if you are able to do so. Motorcycles will always require a VIN verification.
A bill of sale is a written agreement on the sale of a vehicle. This document proves that you purchased the vehicle from a private seller, third party, or dealership. Your bill of sale does not have to be typed or notarized for the Vermont title loophole. For more information, check out our article How to Write a Bill of Sale.
A vehicle lien release is a document that officially removes the lien on your vehicle title. This document declares that you are free to take action with your vehicle. If your vehicle has a lien, you’ll need to have it released before you are eligible for the Vermont title loophole. For more information, check out our article How to Get a Lien Release on a Vehicle.
The book value of your vehicle is an estimate of its current market value, which you can use to apply for the Vermont title loophole. The Vermont DMV first recommends using the NADA book value first in their statutes, but not all vehicles will be featured in this book. If your vehicle is not in the NADA book, there are some other comparable places you can find the book value such as Kelly Blue Book and Galves.
The book must be approved by the Vermont DMV and the value you assign your vehicle should be as close to its actual value as possible. The higher the value, the more you will pay in taxes. Attach a copy of the book value to your application. If the value is too high, the Vermont DMV will send you an invoice for the remaining balance. If it’s too low, they may simply agree with the value or may send you a refund depending on the difference in figures.
The amount of sales tax owed on most vehicles is calculated using the clean trade-in book value of your vehicle multiplied by 6%. This might not sound like a high percentage, but if your vehicle’s value is high, the sales tax you owe could be higher than expected. For trucks over 10,100 lbs and for certain vehicles, the taxes are capped at $2,075. Taxes cannot be avoided. Vermont state statutes indicate that the act of simply applying for registration is evidence that you owe them taxes. For more information, check out our article How To Calculate Sales Tax for Vermont Title Loophole.
Vermont state vehicle registration fees are $48 for motorcycles and $76 for most vehicles and trucks under 6,000 pounds. Heavier vehicles and some other types of vehicles may be subject to a higher registration fee that can be found here.
The Vermont title loophole, or Vermont registration, is a great way for vehicle owners to get a title for an older vehicle and a bill of sale. Every state recognizes this process as the equivalent to a certificate of title and should have no problem transferring the title to your state. If you own a car and want proof that it belongs to you, you should obtain a certificate of title.
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A vehicle lien release is a document that officially declares that the lien on your vehicle title has been removed and you will be free to take action with your vehicle. This document removes any restrictions on what you can do with your car. A person is typically eligible for a vehicle lien release when the loan on the vehicle has been paid back to the lender.
Your lender, who has loaned you money to purchase a vehicle, places a lien on your title until the loan is paid off in its entirety. A lien is a claim on the property for the security of payment. When a lender loans a borrower (you) money to purchase a vehicle, they want to make sure that they are paid back plus interest. Your lender, also known as your lienholder, will remain printed on the front of your vehicle title until the loan is paid off. A lien on a vehicle title is a cloud on the title that places a hold on ownership; once it’s paid off, you can get a title for your car or you can sell it or trade it in.
The process of filing for a vehicle lien release will vary depending on your state, your situation, and your lender. However, the lien release process typically consists of the following four steps:
Step 1: Locate your lienholder
Step 2: Compile your lien release request letter and non-interest letter
Step 3: Mail your lien release request letter through certified mail
Step 4: Obtain the signed lien release letter and apply for a clear title
Your vehicle title lienholder is the lender of your auto loan. To determine who this is, check your bank records and identify the business entity that received your monthly car payments. Once this entity has been identified, make note of the mailing address, physical address, registered agent address, corporate address, and any other address listed for this entity. This information can be pulled from the lienholder’s website or through your state’s Secretary of State business entity database.
To officially request your lien be released from the title of your vehicle, you must send the lienholder a lien release request letter. In this letter, you must include the following information:
If your lienholder has no further interest in collecting on the lien and would like to legally sign off on their interests, ask them to complete a letter of non-interest. The letter of non-interest should include all of the contents of the lien release request letter and should also provide a section where the lienholder can sign away their interests.
Make copies of your lien release documents to be mailed to each one of the addresses listed for your lienholder.
Using the addresses pulled from the Secretary of State or the lienholder’s website, mail a copy of your documents to each address via certified mail. Each envelope should include:
Although mailing identical copies to multiple locations may seem redundant, it is the best way to ensure that your lien release request is received by the appropriate party. As many lienholders do not have a lien release department with staff standing by to release liens as they come in, it is important to attempt to reach as many locations as possible to reach the correct recipient or at least the recipient that has the ability to help.
When you release your lien on a vehicle title by mail, send the document via certified mail. A paper trail will thus be created demonstrating your attempt to release the lien. This evidence will prove useful if your lender cannot be located later. Most DMVs require that you send documents related to motor vehicle transactions by certified mail.
When your lienholder has released the lien on your vehicle, you can take the lien release letter and the letter of non-interest to your state DMV for processing. Before you can receive a clear title for your vehicle, however, you will need to pay all registration and tax fees as well as any title transfer fees.
Typically, your lienholder is required to release your title once the loan has been paid. Unfortunately, that doesn’t always happen. Just because your loan is paid doesn’t mean that the lien has been released; you may still have to go through the vehicle lien release process and notify the DMV of the satisfied loan.
For more information and assistance, learn more about our vehicle lien release process.
It’s the end of your lease, and you want to buy out the car. How do you get a title for a leased car? A leased car is similar to a long-term rental, think of renting a home or office space. At the end of the lease, you can choose to buy out the vehicle from the leasing company or return it.
When you lease a car, the leasing company is the “owner” of the vehicle during the term of the lease. A car lease is an agreement for use of the vehicle between you (the lessee) and the leasing company (the lessor). It’s possible that the leasing company will not hold the title — some leasing companies assign leases to banks or other financial institutions. However, whether it holds the title or assigns it when you lease a car, you’re renting it from someone else, and they’re listed as the owner on the title.
When you make the last payment of your lease, you’ll have the option for a lease buyout. This means you can purchase the vehicle from the leasing company after your lease ends instead of returning it. If you select to buy out the vehicle, the leasing company is supposed to gather all of the necessary lease buyout paperwork, odometer statement, bill of sale, and prior title and file it with the state department of motor vehicles. Unfortunately, the lease buyout title transfer process doesn’t always work smoothly.
The problem happens when the leasing company doesn’t give all of the documents, they may only sign over the title and provide a bill of sale. Sometimes the leasing company is located in a different state than where you reside and they don’t have the correct paperwork for your state process. Waiting for new paperwork to arrive can be frustrating since you will want to get your title as quickly as possible so you can start registering your car with your state DMV.
Consider the vehicle titling process to be the same as buying from a private party or third party. For all intents and purposes, the titling office will see it that way. The leasing company is just the third party in the transaction. Because of this, you have to complete the same requirements that you would for a third-party purchase. You may have already paid sales tax on your lease payments, but you may have to pay a portion of sales tax for the value of the vehicle. In many states, an out-of-state title transfer automatically triggers an inspection requirement. Possibly a new registration and new license plates are required – the license plate was likely in the name of the leasing company. Verify with the leasing company exactly what their lease-end buyout procedure is prior to sending off your final payment.
Ask your leasing company if they have the title on hand. Leasing companies often do not retain vehicle titles in their possession; a company can have an electronic title. This results in the leasing company needing to obtain a duplicate title prior to signing it over to you, which then disrupts the title transfer process. Until you have a new title issued in your name, the vehicle still belongs to the leasing company. Type your application for a new title and any other documents that will be sent to the DMV. Your application is more likely to be read quickly by artificial intelligence and accepted without issues.
All in all, a lease buyout title transfer is a great option if you want to keep the vehicle after your lease ends. Make sure that you thoroughly read and understand your lease agreement so you can decide whether it will be a good option for you. We also recommend taking the steps necessary to initiate the process at least two months before your lease expires. Remember, if the title is not in your name, you are not yet the owner of the vehicle.
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The certificate of vehicle title is a legal document that proves ownership of a vehicle. You can’t just assume ownership by buying a title or even printing yourself a new one — it’s been legally issued by the state’s governing title agency, and can be considered invalid if it has any marks, changes, or otherwise has been tampered with. So what happens if there is an error on your vehicle title?
A vehicle title or certificate of title is a legal document that establishes ownership of a vehicle. Vehicle titles are only printed by the DMV or another authorized state agency. The vehicle title is given to the buyer typically at the time of purchase when ownership is signed over by the seller or dealership.
If you notice an error on your vehicle title, it’s important to address it with your state DMV as soon as possible. An error on a vehicle title can be a misspelling of names, an inaccurate odometer statement, an incorrect sale date, or other miscellaneous errors. An error is not considered to be title document damage, mutilation, or loss of the vehicle title. Do not attempt to make any changes yourself or it may invalidate your title and put your legal ownership status at risk.
Most states actually have a process to fix errors on vehicle titles. In Indiana, it’s called an Affidavit for Certificate of Title Correction. To fix errors on your vehicle title in Indiana, simply complete the Bureau of Motor Vehicles (BMV) form 55582 and submit the completed form to the BMV office. This process is for titles completed in error only and will not work for title transfers.
If your vehicle title is lost, damaged, or stolen, it’s not considered to be a vehicle title error. In this case, if you were the last titled owner, you may be eligible to simply apply for a duplicate title in your state. Be advised that a duplicate title can only be produced from the state DMV where the vehicle was last titled. Additionally, only the registered titleholder in the state DMV records is able to apply and receive a duplicate title. Most states charge a duplicate title fee ranging from $2-$25 per application.
When buying a car, make sure to check the title and the ID of the seller before buying and transferring the title. Once you have received your title, keep it in a safe space. If you know there are issues on your title, get them fixed as quickly as possible to avoid delays further down the line.
A bonded title is a type of vehicle title that is issued using a surety bond when the vehicle owner does not have valid prior title documents or those documents have been damaged. Typically, a vehicle title is signed over to the new owner by the prior titleholder when purchasing the vehicle. If you live in California and you are trying to obtain a new vehicle title without valid prior title documents, you may be able to obtain a bonded title. How do you obtain a bonded title in California?
When the required supporting evidence of ownership is not available and at least one of the following conditions exists, a Motor Vehicle Ownership Surety Bond (REG 5057) or a bond alternative must be submitted:
Registration issued to out-of-state vehicles when their owners are unable to show proof of ownership is called non-transferable registration. Until those conditions are met, the vehicle cannot be sold, transferred, or issued a California Certificate of Title.
Simply completing a Motor Vehicle Ownership Surety Bond (REG 5057) form is acceptable under the following circumstances:
If your vehicle meets the eligibility of a bonded title in California, a surety bond must be obtained to secure the assignment of title.
A bond is required for the fair market value of the vehicle or vessel, as determined by one of the following methods:
If you are applying for a bonded title in California, it’s imperative to note that the bond must be signed by the surety and the signature must be notarized. Some surety companies may preprint a bond with the surety’s signature and notary acknowledgment. This is not accepted in California. The bond cannot be preprinted with signatures, the surety must have their signature notarized.
In California, titles are recorded in the Department of Motor Vehicles (DMV). Missing ownership documents can complicate the title application process. In order to avoid delays and other legal issues, consider applying for a bonded title. This type of title designation is not permanent; after a few years, the bonded title designation will be removed from your California title. Remember to carefully review your state’s laws and regulations regarding vehicle titles before proceeding with any method of title recovery.
CarTitles.com takes the hassle out of applying for a title for your vehicle. Our team of title experts can help prepare your paperwork for your California bonded title or any other title recovery method provided.
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