Are you looking to file a mechanic’s lien or storage lien? An abandoned vehicle can be troublesome for auto repair shops and storage facilities. Not only are they often left with an unpaid bill from the customer, but they’re also often left with the loss of a vehicle. It can be frustrating and seemingly impossible to track down the owner of an abandoned vehicle; so what can be done? If you’re a licensed automotive repair shop or a storage facility, you may be eligible to file for a mechanic’s lien or storage lien to recover the costs.
A mechanic’s lien is a legal process that allows licensed automotive facilities to recover costs for repairing a vehicle. An individual who is not a licensed automotive facility or similar entity cannot file for a mechanic’s lien. The mechanic’s lien process is complex and should only be used when absolutely necessary; it is not an easy way to title the vehicle. If you are an authorized entity and need to file a mechanic’s lien, your first step should be to check your state’s timeline of activities that must be completed in order to correctly file the lien.
For example, Texas mechanics or repair shops have only a thirty-day window from when the charge first accrues to file mechanic’s lien paperwork. On or after 31 days, the shop can hold a sale or auction of the vehicle. If all of the proper paperwork has not been submitted within that time period, the mechanic’s lien may be invalid.
Besides its mentioned time constraints, a mechanic’s lien that is not done properly can bring financial penalties to the mechanic or repair shop. For many years, mechanics and auto repair shops will sometimes abuse the mechanic’s lien filing system by overbilling for work done in order to take ownership of a vehicle. States’ Departments of Motor Vehicles are going out of their way to crack down on bogus and wrongful mechanic’s liens. For example in Oregon, HB4087 states that if liens are not placed properly, the vehicle owner can bring an action against the shop to recover without demand $2,000 or an amount equivalent to twice the value of the vehicle plus the owner’s reasonable cost up to $20,000. Similarly in Texas, vehicle owners can bring action against a shop and recover up to $10,000 if a lien is improperly placed on their vehicle.
The Department of Motor Vehicles is working to make the process for disputing bogus mechanic’s liens more streamlined for vehicle owners. Mechanics should ensure that the mechanic’s lien process is absolutely necessary for each situation. Always attempt to contact the vehicle owner or prior owner before taking further action and be sure that you are familiar with your state’s timeline for mechanic’s liens.
A storage lien is a process afforded to an automotive storage facility or similar entity in order to recover costs of vehicle storage or disposal. Similar to mechanic’s liens, not all parties are eligible to file a storage lien. A storage facility or similar entity is one that is involved with storing, repairing, or otherwise caring for automotive vehicles. Each state has its own process to file a storage lien and the timeline varies depending on the geographic location.
For example, in California, if a vehicle is valued at $4,001 or more at a storage or self-service storage facility, the storage company has 30 days from when the lien arose (when the registered owner was billed) to file a lien on that vehicle. Therefore, if they do not meet that filing deadline, they will not be eligible to file a lien on that vehicle.
The laws governing abandoned vehicles vary from state to state. Any licensed automotive repair facility or storage facility in possession of an abandoned vehicle may be eligible to file a mechanic’s lien or storage lien; however, the procedures for doing so can be tricky and are subject to strict timelines and requirements. If you are a licensed automotive repair facility or storage facility looking for assistance in filing a mechanic’s lien, learn more about our process and how we can help here. Don’t let someone else’s abandoned vehicle remain your problem.
A bonded title is a vehicle title that is obtained by purchasing a surety bond. The vehicle title is provided to the vehicle owner with all the legal documents required by state law. A bonded title is needed when a vehicle owner doesn’t have any of the proper documentation available to obtain a title, usually due to a change in ownership. Bonded titles are available in 34 out of 50 US states, as certain states do not allow this method. You may need a bonded title if you have lost the prior title, damaged the prior title, or never received it.
In some cases, a different method of title recovery may be easier than obtaining a bonded title. A bonded title is needed when there is a significant lack of evidence of ownership. If you have a bill of sale and your vehicle is 15 years old or older, you might qualify for the Vermont title loophole (also known as the Bill of Sale Title method). Look into similar methods of title recovery first before proceeding with a bonded title.
The requirements to obtain a bonded title vary by state. The bonded title application form can be found online on the state’s Department of Motor Vehicles (DMV) website. Some states also require an inspection of your vehicle before you apply for a bonded title. This can include an emissions inspection, VIN verification, or other general inspection. Inspections will vary by state but are generally completed by licensed garages or other mechanics in your area.
In some cases, residents of non-bonded title states may be able to obtain a bonded title through Vermont. Bonded titles are a valid method of title recovery only in the following states:
A surety bond is basically an agreement between you, the surety company, and the state DMV that says you are the legal owner of the vehicle. The bond also states that if the DMV finds out that there is a discrepancy regarding the ownership of this vehicle, they will not be held liable. In other words, if someone comes forward stating that they own this car and you falsely applied for a bonded title, you will be responsible for reimbursing the DMV for any costs incurred in correcting this situation. The surety bond amount is typically required to be 1.5 times the book value of the vehicle. Most surety bonds cost around $100-$150 to obtain for average valued vehicles. You are not required to pay 1.5x the value of your vehicle, only a small fraction to secure the surety bond.
Once you’ve purchased your surety bond, you can submit your completed application to the DMV. Make sure to review all state regulations and have all inspections done prior to submitting your application. Applications that are incomplete will most likely be rejected.
The good news is you do have options to get a vehicle titled without the proper paperwork. You can apply for a bonded title on your car, which may or may not be successful depending on your state’s laws. To be successful using this method of title recovery, ensure that you learn about all applicable laws in your jurisdiction and abide by all inspection regulations. Even if you’re missing the proper paperwork, if it’s your car, you deserve a title.
If you’re thinking about buying a kit car or an assembled vehicle, you’ll want to learn how to title it as well. Understanding the process of titling a kit car or an assembled vehicle is important before you commit to building a new ride. The laws for titling these vehicles vary from state to state and there may be special processes that need to be followed. Knowing about these processes will help you to complete the steps needed and avoid any potential delays.
Before registering your vehicle, however, it is important to know whether your vehicle is considered a kit car or an assembled vehicle as this will determine what documents are needed for registration.
A kit car is built by the owner or someone else. Kit cars are replicas of certain models of vehicles and are made in small numbers. The pieces are usually shipped to the buyer who assembles the vehicle or they can be purchased pre-assembled from the manufacturer. Vehicles that are made from kits, whether they are assembled by the owner or not, must be titled as a kit car or replica car.
An assembled vehicle is made when someone takes two or more separate vehicles and combines them into one using parts from each vehicle. Assembled vehicles also include rebuilt salvage vehicles where parts from other vehicles have been used to repair the original damaged vehicle after an accident.
The most important factor to consider when titling an assembled vehicle or a kit car is the VIN. Having a VIN is a prerequisite to getting a title. Before you apply for title and registration, you must have a VIN.
If the VIN is on one of the major components of the assembled vehicle such as the body or frame, you can use that VIN for your vehicle as long as it’s not logged in the NMVTIS database as junk or nonrepairable. If you don’t have the VIN from the body and frame or you have a kit car, you will have to apply for a new VIN from the DMV.
When you apply for a new VIN, this automatically triggers an inspection of your vehicle. Each state has specific requirements for kit cars and assembled vehicles. If your vehicle meets any of the general criteria, your vehicle may be denied a new VIN.
Kit cars are different from the conventional vehicles you drive every day. They are not regulated by the same standards as normal vehicles and have specific emission requirements. If you are rebuilding a kit car that is a replica, you only need to meet the safety and emissions standards of that model year. For example, if you purchase a 1956 ford model car kit, you only have to abide by the safety and emissions standards of that model year.
If your kit car is not similar to an existing vehicle model, then it needs to be inspected for emissions compliance at an approved smog check station after it is assembled and registered by the Department of Motor Vehicles (DMV).
If you are looking to get a kit car titled or even an assembled vehicle titled, the best advice is to do your research. Before you take any action, make sure to get your vehicle plans approved by your local DMV. Whether you bought the car from someone, built it yourself, or rebuilt it, if it’s your car, you deserve a title.
A lost car title can be a nightmare, especially if the incident that caused you to lose the title was a little bit more serious than dropping it in a puddle. If you previously had a car title in your name but that document is lost, stolen, or damaged, you may be eligible to file for a lost title. A lost title can be a headache and limits what you can do with your vehicle. Losing your title can be an anxiety-inducing situation, but don’t hit the panic button, this article will teach you the basics of how to file for a lost title.
If you were the last titled owner, you can apply for a duplicate title with your local DMV. To qualify for this process, you must submit a duplicate title application and you must have been the last titled owner of the vehicle. If you were not the last titled owner, you cannot receive a duplicate title and must obtain a title using a different method. The DMV keeps records of all titled owners and upon submission of your application, your local DMV will review their title records to validate your claim of ownership. Once this is verified, the DMV will send you your duplicate title.
The process and fees associated with filing for a duplicate title vary from state to state. However, it’s important to note that duplicate titles can only be issued in the states where they were last titled. For example, if you live in Louisiana but your car was last titled in Illinois, you can only get a duplicate title from Illinois, you won’t be eligible for a duplicate title in Louisiana. Most state DMVs allow for duplicate titles to be processed in person and via mail. Always refer to your local DMV website or call them if you have specific questions regarding the process in your state.
If you were not the last titled owner, you can file for a new title but you won’t be eligible to receive a duplicate title if the original was lost or stolen. The DMV will not issue a duplicate title to anyone other than the last titled owner. However, there are over 20 different methods to obtain a vehicle title depending on the situation and supporting documentation. Here are the top 3 ways to get a title when you were not the last titled owner:
This method involves contacting the prior owner of the vehicle and asking them if they will obtain a duplicate title and transfer it into your name. Prior owner transfer is one of the easiest ways to get a title, but only if the prior owner is willing to cooperate and you’re able to find them. If you don’t know the prior owner, you can submit a DPPA request to your state’s DMV for the motor vehicle record. The DMV may take up to a few months to process your request due to the legal nature of providing protected driver information. Not all states, such as Arkansas, allow for this type of request.
A bonded title is obtained by buying a bond, also known as a surety bond, from an insurance company. You take the bond to your local DMV along with all required documents. A surety bond secures the title and backs up your claim of ownership; it protects the state DMV from liability if there were to be a discrepancy of ownership.
The amount of the surety bond must be 1.5x the value of the vehicle. Each state may require a different book value for the surety bond amount to be based on, some states require the average trade-in value while others require the clean trade-in value. You don’t have to pay 1.5x the value of your vehicle, just a fraction of that cost. Most surety bonds for motor vehicle titles cost around $100-$150 but may be more with higher-valued vehicles.
If you have a vehicle that is 15 years old or older, you may be eligible for the Vermont title loophole. Vermont is a non-titling district, meaning they do not produce titles for vehicles over 15 years old. When a vehicle over 15 years old is registered in Vermont, the registration is equivalent to a title. Vehicle owners can then use that registration document as their proof of ownership and transfer it to a title in their state.
The best part about the Vermont loophole is that you don’t have to be a resident of Vermont or go to Vermont to use this method. Vermont is the only state that allows this process for out-of-state residents.
The best method for filing a car title depends on your circumstances. If you were the last titled owner in the DMV records, you can apply for a duplicate title. If you were not the last titled owner but lost the title before you could transfer it, you will need to pursue another method of title recovery. Regardless of the title recovery method, if it’s your car, you deserve to have your name on the title.
When using the Vermont title loophole, one common mistake applicants make is incorrectly calculating their sales tax amount. The reason for this error often lies in simple misreading and misunderstanding of NADA book values – which can lead to overpaying or underpaying on taxes.
The National Automobile Dealer’s Association (NADA) is the largest publisher of auto market information and provides value references to dealers across the country. The Vermont DMV statutes state that to determine the taxable cost of the vehicle, the applicant must use the NADA clean-trade in value of the vehicle. Other than the clean trade-in value, the NADA also references other values:
Reflects the value of a vehicle in rough condition such as significant mechanical defects, significant repairs required to restore reasonable operable condition, cosmetic damage that has considerable damage, or the vehicle will need significant repairs before resale.
Reflects the value of a vehicle in average condition. The vehicle is mechanically sound but has imperfections that need to be repaired before passing all necessary inspections. The vehicle has a clean title history but will need some repair/servicing before resale.
Reflects the value of the vehicle in clean condition. The vehicle has no mechanical defects and would easily pass all necessary inspections. The vehicle may have minor surface scratches and the interior has minimal soiling with all internal parks working. The vehicle has a clean title history and has minimal adjustments needed before resale.
Reflects the value of the vehicle in clean condition. The vehicle has no mechanical defects and would easily pass all necessary inspections. The vehicle may have minor surface scratches and the interior has minimal soiling with all internal parks working. The vehicle has a clean title history and no additional repairs or adjustments are needed before sale.
The NADA also states regarding each value definition, “Because individual vehicle condition varies greatly, users of NADAguides.com may need to make independent adjustments for actual vehicle condition”. Reference to valuation definitions as defined by the NADA found here
Once you’ve determined your NADA book value, you will use that figure to calculate the sales tax owed. Sales tax is always due at the time of registration. Calculating the amount of sales tax for using the Vermont title loophole can be done using this formula:
Formula: (NADA value) x (6%) = Sales Tax Due
Example: $5,000 value x 6% sales tax = $300 sales tax owed
If your sales tax is calculated incorrectly, it’s very likely that your application will be rejected. If it’s not rejected, but the sales tax amount is too low, you’ll receive a revised invoice for the remaining balance within 15 days. Your application will be refused by the Vermont DMV if you send in your application without the proper sales tax and registration fee. By submitting the application for title, you are providing evidence that you are liable for paying sales tax.
If your car’s value is significantly different from the book value due to damages or other conditions, an appraisal may be to your benefit. However, it’s important to consider the costs that will be incurred by the appraisal process. If the appraiser charges $400 but saves you $400 in taxes, you didn’t really save any money on the transaction. You won’t know how much you’ll save until the appraisal is complete and the appraiser still charges even if they bring down the value of the vehicle. We only recommend using the appraisal process if you have a very high-value vehicle or you have reason to believe that there is a significant difference between the book value and your vehicle’s value. Remember, you cannot register a parts-only vehicle using the Vermont title loophole. If the vehicle’s value is low due to it being mechanically inoperable, it is ineligible for this process.
An appraisal must be done by an approved Vermont licensed dealer and accompanied by the Vermont Dealer Appraisal Form. If you paid taxes and want to request a refund, you can send in a referral within 30 days of your payment. If you reside outside of Vermont, finding a licensed Vermont dealer could be a problem. However, there are many appraisers in other states who have nationwide appraisers licenses. Appraisers often travel to various states to appraise vehicles in specific situations so many are licensed nationally. Some states also have appraisal licenses that have reciprocity in Vermont.
The Vermont statutes are clear to use the NADA or comparable publication to determine the book value. If you can show that a particular book has more sales data that goes into a particular value than NADA, you may be able to use this alternate book value instead. If you want to make sure that your application gets processed the first time, use the NADA value. Don’t arbitrarily pick a low book or low value, your application will be rejected and you could face issues with the Vermont DMV. When submitting your application, always include a copy of the page of the book used for your valuation. If you feel that your book value is incorrect, contact an appraiser to discuss your options. Don’t write a letter to the Vermont DMV or call them to discuss the value, the Vermont DMV will only take the appraiser’s opinion of value as valid.
The Vermont title loophole is a great way for drivers to title their vehicle that is 15 years old or older. When pursuing this method to obtain a title, make sure to properly calculate your sales tax. Looking for more tips on using the Vermont title loophole? Check out this article listing the Top 5 Tips for Success Using the Vermont Title Loophole. For assistance with your paperwork, and to get started with this process, click here!
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