Have you heard of the famous Vermont title loophole? 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.
Vermont is a non-titling jurisdiction, meaning that the state of Vermont does not produce titles for vehicles 15 years old or older. This means that vehicles 15 years old or older are only eligible to receive a registration, which in the state of Vermont would be the equivalent to a vehicle title. In most US states, you cannot apply for a title without having the old title signed over to you. If you’re unable to find the prior owner or they’ve lost the title, this could pose problems in your application process in your state. By using the Vermont title loophole, a vehicle owner can apply for registration in Vermont and if approved, use that registration document as proof of ownership, aka a vehicle title, and transfer it to a title in your state.
According to the Vermont DMV, one of the biggest mistakes that applicants make when applying is selecting “New Title” rather than “New Registration” in section 4 of the VD-119 form. Remember, Vermont is a non-titling jurisdiction for vehicles 15 years or older. In these situations, the registration is the equivalent to a title for that age of vehicle. We recommend that this form is 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 where an authorized agent physically inspects the vehicle’s VIN to confirm that the VIN on the vehicle matches the VIN on the application. If your vehicle is a motorcycle, a VIN verification is always required. Due to COVID, some cars, trucks, and other non-motorcycle vehicles have been able to apply without the extra VIN verification. However, in 2022 this is changing and the Vermont DMV will soon require this as a step for all applicants. A VIN verification can be conducted by an authorized state agency such as 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. Motorcycle applications will always require a VIN verification.
The book value of your vehicle is about how much your vehicle is worth in the market today. There are different values such as average value, clean trade-in, and so on. When using the Vermont title loophole, look for your vehicle’s clean trade-in value. 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. Make sure that the book you are using is approved by the Vermont DMV and that the value you assign to your vehicle is correct. Always choose the lowest possible value for your vehicle because the higher the value, the more you will pay in taxes. If you can, attach a copy of the book value to your application. If the value is too low, the Vermont DMV will send you an invoice for the remaining balance. If it’s too high, 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 is often a sore subject. 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 depending on your vehicle’s value, the amount owed in taxes may be higher or lower than anticipated. For trucks over 10,100 lbs and for certain vehicles, the taxes are capped at $2,075. There’s not a way to get around paying taxes. Vermont statutes state that by simply applying for a registration, that is evidence that you owe them taxes.
The Vermont registration fees are $48 for motorcycles and $76 for most vehicles and trucks under 6,000lbs. Heavier vehicles and some other types of vehicles may be subject to a higher registration fee that can be found here.
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.
The Vermont DMV doesn’t require proof of insurance, however, on the application, there is a section that certifies that at the time of application, you have current insurance for the vehicle. It is a crime and punishable by a $1,000 fine and up to two years in jail for providing a false statement on this application.
The Vermont title loophole is a great way for vehicle owners to get a title for an older vehicle and a bill of sale. Every state recognizes the Vermont registration as the equivalent to a certificate of title and should have no problem transferring the title to your state. We recommend that when applying to transfer the registration to a title in your state that you bring along the title informational bulletin to assist the DMV agent with the process if they are not familiar. Obtaining a vehicle title is an important step in keeping your assets safe. If it’s your car, you deserve a title with your name on it.
If you bought a car without a title, or you’re unsure if your vehicle has a title, it’s important to get this resolved immediately. In most states, like Texas, it is illegal to operate a motor vehicle without a certificate of title. Additionally, some vehicles that were repaired are not eligible for a title. Vehicles that have parts from a nonrepairable or floor damaged vehicle are not ever eligible for a title, even if the vehicle runs just fine. What is a vehicle title and why is it needed?
A vehicle title is a document produced by a government agency that assigned ownership of a motor vehicle. The certificate of title is only produced by a government agency and cannot be obtained from other sources. Obtaining a certificate of title in your name doesn’t just protect your vehicle, but it protects you from someone fraudulently applying for your vehicle’s title. If it’s your vehicle, your name should be on the title. When a vehicle is sold, the seller is responsible for signing over the title. If the seller cannot produce the title at the time of purchase, this should be a red flag. Sellers that are not willing to at least show you the physical title at the time of purchase may have something to hide about the vehicle. While this isn’t always the case, it’s possible that the seller is trying to sell you a vehicle that they know is ineligible for a title.
Some vehicles are simply ineligible for a title. Vehicles that are ineligible for a title are those that have been recorded in the National Motor Vehicle Title Information System (NMVTIS) as junk, parts-only, or non-repairable. This doesn’t just include whole vehicles, but parts that are from a junk or non-repairable vehicle have serial numbers that are also found in the NMVTIS. Each state has slightly different rules that dictate which vehicles are eligible for a title, here are some common scenarios where your vehicle may be ineligible for a title:
If your vehicle doesn’t have a title, the first step is to check your VIN against the NMVTIS database. If your VIN is found in the database, your vehicle is ineligible for a title. Depending on your situation and the vehicle condition, you may be eligible to reassign a VIN to the vehicle after inspection. Websites like JunkTitles.com specialize in helping vehicle owners reassign a VIN to ineligible vehicles.
If your vehicle is not found in the NMVTIS database and all of the parts are eligible for a title, the first step would be to contact the seller for them to transfer the title to your name. If the prior owner is not located or willing, there are additional methods to obtain a legal title. Your vehicle will likely require an inspection by a government agency like the DMV or state police, but it’s not impossible to get a title in this situation. Depending on the paperwork you have for your vehicle already, you may be able to obtain a bonded title with a surety bond or use an out-of-state title method like the Vermont title loophole. When purchasing a vehicle, a best practice is to always get the title signed over at the time of purchase. Make sure to do your due diligence when purchasing a vehicle to avoid being left with a pile of metal and no vehicle title.
A salvage title is a permanent title designation that is assigned when a vehicle has sustained a high amount of damage. Some states allow for these titles to be converted into rebuilt titles, but they will always have a salvage designation.
Once a vehicle has received a salvage title, it cannot be returned to its previous status. It can only be sold to a dealer or another individual as salvage. A rebuilt title is often issued when the car has been restored and found to be road-worthy.
A salvage title is almost always issued by an insurance company. Each state has its own threshold of damages that must take place to designate a salvage title. Some states require 50% of the total book value in repairs, but some up to 100%. If a vehicle has repairs that accumulate to more than this threshold, it can be issued a salvage title. If the insurance company has paid a total loss claim, more than likely it’s because the vehicle crossed the percent of damage threshold.
In other words, if you were in an accident and your vehicle was totaled out because it would cost more than 80% of its value to repair it, you may have received a salvage title from your insurance company. It’s also possible that you had no collision coverage and could not afford to repair the vehicle, so you received a salvage title from the Department of Motor Vehicles (DMV) instead.
Many insurance companies are beginning to issue nonrepairable, junk, and parts-only titles to vehicles they used to deem as salvage. The DMV and insurance companies are cracking down on curbstoning. Curbstoning is an illegal scheme where an unlicensed dealer will buy cars from auction, say they were a personal vehicle, poorly repair the vehicle, then resell it to a new owner who has no idea of the title history. It’s not illegal to repair a salvage vehicle, but it is illegal to claim the proper repairs were made to meet state requirements when this is not true.
In order for the title on a salvage or rebuilt car to be road-safe, all states require a professional inspection of the vehicle. This can be done by certified mechanics or through the DMV. The mechanic will go through every part of the vehicle, make sure it meets state requirements and road safety standards, and note any problems that need fixing.
If you have a salvage vehicle, first check the NMVTIS database to make sure it’s salvage and not nonrepairable, junk, or parts-only. Check the requirements in your state to learn about the repair process. If you’re an auto repair or rebuilding shop, make sure to follow all state regulations for repairing salvage title vehicles. In many cases these vehicles can be repaired and put back on the road with no problems; however, if improperly repaired and put back on the road they may present significant safety issues.
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Did you know that you can put a hold on your vehicle title to prevent it from being transferred without your knowledge? If you’re in a situation where your vehicle is in the hands of someone else and you are concerned about the vulnerability of your vehicle title, you can use this method to secure your asset. All states have a method to block car title transfers. But if a title is so difficult to get, why would a vehicle owner want to consider blocking a title transfer?
The vehicle title assigns the legal ownership of a vehicle and therefore is an extremely valuable document for a vehicle. To block the transfer of title, there must be a significant threat to the security of the vehicle. Here are some examples of when a vehicle owner may place a hold on their title:
Every state has a process to place a hold on a vehicle title. In California, it’s known as a Courtesy Stop Request. To file a courtesy stop request, first, you’ll want to get good legal advice and sue the person or people who are threatening your title and vehicle. After filing, you’ll complete the Courtesy Stop Request form (Reg 500) and write your motion for a preliminary injunction. Next, the complaint, motion, and all related papers must be served personally to all parties. The submission of this form automatically stops the DMV from transferring the title for 60 days. After that 60 day period, if a court date has not yet been set, the applicant can apply for an extension or remove the hold.
If you are concerned about the safety of your vehicle title, don’t wait to take the necessary steps to keep it secure. Contact your state DMV and place a hold on your title until the situation has been resolved.
A VIN (vehicle identification number) is a specific 17-character string of numbers and letters that uniquely identifies a specific vehicle. Every car has its own VIN, no two cars are exactly alike. The VIN is assigned to the vehicle when it’s manufactured. Checking the VIN can reveal information about the vehicle dating back to when it was first manufactured, such as accident reports, salvage reports, stolen reports, and much more information. The VIN is typically stamped on a metal tag and is often located on the driver’s side of the dash, the door jamb, or under the hood.
Most VINs are 17-characters, but this only began in 1981. Some vehicles manufactured before 1981 have a shorter 11-character VIN. This change in regulation grandfathered in vehicles pre-1981 and allows for those vehicles to still be titled, along with certain other vehicles with varying VIN length such as certain import vehicles.
The first three characters of your VIN will tell you where the vehicle is from and where it was manufactured. The next five digits describe the vehicle, the engine, transmission, and other technical features. The next three digits contain the vehicle’s security digit, model year, and the assembly plant. Finally, the last six digits are your vehicle’s serial number. The serial number identifies your specific vehicle, trim, and other specifications.
A VIN check is the process of checking your VIN against the National Motor Vehicle Title Information System (NMVTIS) database. There are many websites that offer this service for free and will pull information directly from this database. It’s crucial to check your VIN before buying because if your VIN shows up in the NMVTIS database, you can not get a title for that vehicle.
The NMVTIS is a database that contains information about salvage, junk, and other damage-titled vehicles. Vehicles in this database are not eligible for a title because they have received a title brand such as salvage or junk which deems them inoperable for use. The database is designed to protect consumers by allowing them to check whether their vehicle has a salvaged title or not. This information is usually included in the VIN check results from websites like VINAudit and CarFax.
The VIN is a useful way to decode and understand more about individual components of your car. If you’re considering purchasing a new or used vehicle, you should be familiar with what the different components represent. By decoding the VIN, you can get a good idea of which parts will be in your car. Conducting a VIN check before purchasing a vehicle can bring you the peace of mind that you are receiving the full value of your purchase.
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