Today we’re going to talk about the very popular Vermont registration title process that many people use in all parts of the country to get valid ownership documents for their vehicle. A lot of questions come up about this. Do you have to be a resident of Vermont? What paperwork do you need? What about taxes? These are very common questions, and we’re going to look at all those and we’re going to get the information directly from the Vermont DMV.
Getting Information from Vermont DMVSo, we’re going to get it from the horse’s mouth like they say. We’re not going to use any kind of urban legends or old wives’ tales or anything that you might hear online. We’re going to get it right from the Vermont DMV. First, we’re going to look at the FAQ page on the official Vermont Government website.
FAQ Page on Vermont Government WebsiteFAQs:Can someone else fill out the registration form for me? Yes, someone else can complete it but you have to sign it. Application must be signed by the owners of the applicant, that’s you.How long do I have to get inspected? Well, inspection is only for newer vehicles, so it doesn’t really count as far as older vehicles.Do I have to be a Vermont registered resident to register a vehicle in Vermont? No, anyone can register a vehicle in Vermont. That’s key.Do I need a Vermont license to register? No, anyone can register a vehicle. Notice the answer is the same. So don’t let anybody tell you otherwise. As of right now, you can register as a non-resident.
Required DocumentsNow, what paperwork are you going to need? Well, we’re going to use their required document wizard. What do you need to have? It also tells you completing your forms prior to coming to the DMV makes it easier. Now, if you’re from another state, you’re not going to go to DMV, you’re going to do it by mail.
Types of Vehicles and EligibilityFirst, it’s going to tell you what type of vehicle do you have? Auto, Truck, motorcycle. So we’re going to put in Auto. The answers are going to be pretty much the same. Next is most important question is your auto 15 years or newer? 15 years or newer? This Vermont process is for vehicles that are 15 years or older. So if you have right now a 2008 model or older, that’s what’s designed to be used for this process. So remember, 15 years and older is what this process is for. So this question asks you is your vehicle 15 years or newer?
Required DocumentationNo, what do you need? Well, there’s no other questions, required documentation. Please complete the forms, VD119, VT005, fill in these sections, and either bring or mail the form to the Department of Motor Vehicles. That’s it, end of story. There are no more questions, no more questionnaires, right? So it’s very simple, you have to fill out the forms properly because we talked to Vermont DMV very frequently, and they tell us all the time that there are common errors people make on these forms. So make sure you fill it in right, but that’s all you need, required documentation, complete the forms.
Bill of Sale and Required FeesNow, one of those sections is about a bill of sale. You need to have a bill of sale for this, so make sure you do that.
Taxes and FeesRequired fees:What fees will be due, taxes is what people ask about. How much tax do I have to pay? Well, let’s see what Vermont says about that. Here’s their page on taxes, official government website. Purchase and use tax is due at the time of registration. It’s a percentage of the purchase price or NADA clean trading value, whichever is greater, minus the value of a trade-in, which normally doesn’t apply because you’re not buying it from a dealer, you’re not trading in a vehicle. So, this is where people kind of get a little bit anxious.
Tax Rates and OptionsWell, NADA, it seems like it’s too much money. Well, maybe it is, maybe it’s not. However, you have a few options. It says NADA clean Book value is due and less exempt. We have a couple options. First of all, their website says NADA clean trade and Book value. However, the Vermont statutes, the actual laws on the books, tell you that you can use some other value guides if they’re accepted on some older vehicles, on some trucks, on some alternate vehicles. You can use other guides. Now, NADA still might be less, but you can look at the other guides if you believe the vehicle’s value is less than NADA value, you can submit an appraisal form. Well, that’s one of the things that we prepare a lot for our clients, is this appraisal form because they want to come in with a lower value. So be aware, you can do that.
Tax Credits and Special VehiclesThen you have some other options. If you are claiming a tax credit for a vehicle registered to you out of state, send a copy of the registration certificate. This normally doesn’t apply, but you may have already paid some taxes for this vehicle that you get a credit for. And here’s your tax rates. Tax rate basically is 6 percent across the board, except for short-term vehicle rental, which is 9 percent, but everything, ATV, auto, boat, motorcycle, motorhome, trucks, 10,000 pounds in over or under, all other vehicles, everything is 6 percent.
Special Vehicles and Maximum TaxNow, there’s a couple things from this table which are very, very helpful. First of all, on some larger vehicles, 10,000 pounds or more, or other vehicles which are, you know, kind of specialty vehicles, there’s a maximum tax of $2,000. So you might max out your taxes.
Conclusion and Additional InformationAlso, it tells you what type of vehicles you can register. People ask all the time, can I do an ATV? Yep, it’s right here on the classification. Motorboat? Yep, you can do that too. Now, you notice it says motorboat, it’s not kayak, canoe, gotta have a motor. Motorcycles? Yep. Motorhomes? Yep. Trucks, doesn’t matter if it’s above 10,000 pounds, 10,100 actually, you can register it. The taxes where people get tripped up, you may believe that your vehicle is not worth that much and you don’t want to pay that much tax. You have two options. You can fill out the Vermont appraisal form or you can look at another title method that’s not through Vermont that maybe doesn’t have tax. So if you want to use the Vermont method, you have to pay them their tax. Their law says you have to use book value. If you don’t think you feel like you want to pay book value, that’s fine. Look at another method. Maybe buy the title, maybe lean title, maybe magistrate title. There’s other methods. You’ll see them on our website that maybe don’t have taxes, but they may have something else you don’t like or use the Vermont appraisal form, which we provide when we do the order. Vermont can make it their determination. Maybe your vehicle is worth less than the book value.
Additional Instructions and LimitationsSo that’s an overview of the Vermont process as of December 2022. We’re doing this in advance of 2023. Remember that there’s other instructions you need to follow. You need to have a bill of sale. You need to have a proper vehicle. You can’t have one that’s salvage or parts only or junk or things like that. You have to have a legitimate vehicle. And there’s other limitations we’re going to talk about in another video about military vehicles, these former military surplus vehicles that are now something that could be a problem for some applicants. Hopefully, that helps. Check out our website, we’re glad to be of assistance.
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Look, we promised to try not to keep beating this dead horse with Carvana, but there are some interesting developments. Even though we’ve been touching on it every week or so and we think that’s the last you’re going to hear of it, there’s more.
Stock Performance and DeclineHere’s the thing: Carvana, even though it had fallen from 300 plus down to 50, then to 30, then hovered around 20 for a while, took an even bigger nosedive last week. It went down from the mid-teens (15, 16) down to eight point something. You can see their chart here. This is a one-year chart. It was up 300; now it’s down, you know, in the eights.
Reasons Behind the DeclineWhy is this? What’s going on with Carvana? We’ve talked about before what some of the risks might be. What’s the automotive industry component of this? What is the automotive structural documentation part of this? Well, every aspect of their business is in decline: their top-line sales, their net profit, their profit per vehicle, their expenses are up, and now they have some debt obligations to take into account. Their gross profit is off more than a third, and there are a few aspects in play.
Title and Registration IssuesWe’re going to talk mostly about the documentation part of it—the title and registration part of it. When you have a major automotive company like Carvana, or any large dealership, that has chronic documentation problems, that in itself is a canary in a coal mine. Look, every dealership can run into a title problem. We deal with this all the time with vehicle titles. We do titles for dealerships, auctions, lenders, financial institutions—all the time. Anybody can run into a title problem. It’s not that nobody’s immune to it, but normally it’s an exception to the rule. A dealership might have one or two title problems a year; a bank might have a few title problems a week if it’s a large financial institution. For a public company the size of Carvana to have ongoing title issues and chronic title problems, that means something.
Nature of Title ProblemsIt doesn’t necessarily have to be nefarious, like they’re selling stolen vehicles or they’re not getting titles from lien holders or they’re not paying off cars. It doesn’t necessarily have to be that, but it does mean that one area of their business—managing title paperwork—is not being executed properly. That’s just one small area. There is marketing, sales, finance, and then you have title paperwork. Title paperwork is not the most complicated part of a dealership. It’s not the hardest to do. It doesn’t require the most people. It’s actually pretty straightforward. The rules and the processes for doing car titles are established. You can read the requirements at the DMV checklist. You can get instruction from the titling division in the state. There’s no mystery to it.
Complexity of Other AreasSales, on the other hand, has some mystery to it. Marketing has a lot of gray area; in marketing, there’s a lot of art versus science. So, if a company is not doing well in sales and not doing well in marketing, you can kind of say, “Well, they’re at least trying. They may not be great at it, but there’s some gray area.” If the one part of retailing motor vehicles, which is car titles—something very specific and very etched in stone—is not being executed, that’s a management question. How do you not have the ability to execute something that is very clearly defined within a company, a small part of that company, and something that every dealership gets right for the most part? Even dealerships that fail financially usually get their titles right.
Speculations and HypothesesNow, there’s been a lot of speculation about why that’s the case. Maybe they didn’t hire enough people. Well, Carvana has a lot of employees. Maybe they’re just unorganized. Well, that’s a problem. If you’re unorganized in that area, that kind of indicates that you might not be organized somewhere else. Maybe it’s something more nefarious. Maybe there are problems with these titles. Maybe there are problems with liens. Maybe there are floor plan loans that are not being paid off fast enough. Again, we’re not accusing of anything, but we’re just speculating on what could be the reasons without conspicuous or transparent reasons from Carvana why these title paperwork problems are still happening. You can only speculate, right? You don’t have a reason to know what the actual fault is inside the company.
History of Title ProblemsAnd it’s not something that just started. This has been going on for several years. The first complaints about Carvana’s car title paperwork problems were at least as far back as 2020. Sometimes you can go back and find some in 2019. That’s two or three years ago. If you can’t solve a title problem in two or three years, maybe it’s not solvable. Maybe it’s something chronic within your business that you cannot solve. It’s probably not just a numbers game because bigger companies obviously have more problems, but it’s happening in all of their operating areas. All the states that they operate in have had some title problems—some minor, some major. Some of the states have shut them down. In fact, this week another state shut down Carvana’s license because they didn’t get titles out fast enough. There are some people still waiting more than a year for titles for vehicles.
Market SentimentsAgain, not to beat a dead horse or kick somebody when they’re down. We’re not trying to disparage Carvana. We don’t know if they’re a good company or bad company. We do know that a lot of people in the financial side are betting against them because their stock has gone down. People that put their money where their mouth is with their opinions say that their opinion is, “We don’t like Carvana. We’re selling the stock down to eight dollars and below.” One of the large financial research companies put a one-dollar stock estimate on the price of their shares. They say their stock could be worth a dollar. Basically, it’s nothing.
Concluding ThoughtsSome of it has to do with the headwinds in the economy: inflation, interest rates, car prices, many other things. But when you have a part of your operation that’s relatively straightforward—it’s not simple, you know, car titles is hard to do, but it’s straightforward, it’s easy to define and understand—you can put people in a room, tell them exactly what to do, there’s no question about it, and that’s not getting done, that might indicate that they’re not running a tight ship, right? That there are other parts of it that are loose. And in an environment like we’re in, with inflation and interest rates and vehicle market upheaval, if you’re not running a tight ship, you’re probably not going to survive. Even if you are running a tight ship, it’s going to be a struggle. If you’re not running a tight ship, it might make it even harder or impossible to dig yourself out of such a hole. Allegedly.
Here we are once again with another in our series about vehicle court order titles. This is a very popular subject for our Channel and for our title division where if you have a vehicle that was purchased without a title, what are your options? Well, in some states you can do a bonded title, but there’s a downside to that. You have to purchase a shitty bond which sometimes is one and a half times the value of the vehicle. You may be able to do some other types of contacting prior owners and getting lean releases, but in most cases, a court order title is the most direct, powerful way to go.
Lack of Set ProceduresNow the problem is, in most counties, they don’t have a set procedure for this. They don’t have a set set of forms. However, in about 15 counties in the country, there is a package of documents that are provided with instructions, and we like to show you those so even if you’re not in one of those counties, you can see how the process works.
Example from KansasSo here is a perfect example of a set of documents. It happens to be in a county in the state of Kansas about what they call a quiet title. That’s what they call their court order title. They call it quiet title, and The Quiet Title statute talks about determining title or interest in property and they’re talking about title with the Department of Motor Vehicles, so there you go, title to a motor vehicle. How does it work if you are a person who purchased a vehicle without a title and the last owner isn’t available? That is a reason. So it says often because the initial owner of the vehicle did not sign the title when handing it over, and the new owner can’t find the title to fix the problem. From time to time, it’s because the vehicle is wrecked or abandoned.
Abandoned Vehicles and Other IssuesHere’s an example of abandoned vehicles, just possible reasons. So anything that has a title problem, and here’s where they talk about the basics of it. A quiet title action can be used to clear up ownership on any vehicle which title is given by the state of Kansas. It can include a car, motorcycle, travel trailer, manufactured home, so it’s important to see that it could also be a mobile home.
Steps Before FilingThe first step before filing any action is to make sure the vehicle is not stolen. This is very important. You want to make sure it’s not a stolen vehicle. This is another example of something we’ve talked about before. You can check if it’s stolen on NICB, gives you the link right there. For NICB, it tells you a very important disclaimer. It says you can do this by checking on this free website provided by the National Insurance Crime Bureau and NICB VIN. This doesn’t guarantee the car isn’t stolen, but it’s a good start. We talk about this all the time. If you are looking on any of these online VIN checks, Carfax, NICB VIN Checker, VIN audit, whatever it is, they have some information, but it’s not 100%, especially when it comes to liens. If the vehicle is reported stolen, you won’t be able to file a quiet title action and obtain ownership. That’s obvious. It’s one of the reasons we tell you to do this because, Norm, if you file for a court order title, in this case called Quiet Title, you’ll get a title as long as the vehicle is not stolen.
Checking for TitleIf you don’t have a current title, you should look up whether a Kansas title has been issued. That helps you know which direction to go. It’ll also tell you who other parties are. The person filing the case is the plaintiff, that’s you, that’s the person who ultimately wants to have their name on the card. That’s the plaintiff. Here is the Civil Information Sheet that you fill out for this process, a bunch of check boxes. You put in the plaintiff’s name, defendant’s name, and they already have this filled in for you. The defendant is the Kansas Department of Revenue. That’s who issues titles. They already have it filled in, so that’s helpful. If there are any other defendants like lien holders or prior owners, you put them here. I have a lot of places for that, and it tells you what you’re trying to do here is the Civil Petition. The plaintiff is you, plaintiff blank, claims against defendants involving a car motorcycle VIN number. Plaintiff U. Joe is a resident of County Kansas residing at it tells you the wording for the court order title. Plaintiff requests judgment as follows: to issue a new certificate of title for property in the name of the plaintiff. That’s what you’re asking for.
Documentation RequirementsNormally they’re going to require you to provide some documentation about how you purchased the vehicle, also some documentation that you tried to contact the prior owner. You put an ad in the newspaper, you did an Affidavit of Service that you did these certain things. This is the affidavit to obtain service. The reason for showing you this is because most counties don’t have these pre-made documents. There are 3,611 counties in the country. There’s only about 15 that have any kind of pre-done paperwork for a court order title. In fact, most counties, if you walk in and say, “I want to do a court order title or a Quiet Title,” they’re not going to know what you’re talking about because it’s not a predefined type of case for them like a small claims case or a divorce case. So you have to do all the work. However, you can use these templates. You can cut and paste from this to make up your own documents.
County Variations and AssistanceNow every County’s a little different. Some counties might want the wording different, some counties might want the plaintiff different, but at least if you have something you can file, they can tell you what to fix. If you go in empty-handed with nothing and say, “Hey, what do I fill out?” they can’t help you. They’re not allowed to do this because they consider it legal advice by a government agency. But if you go in at least with some paperwork filled out, prepared, and it’s wrong, they can tell you, “No, this is wrong. You have to fix it.” And a lot of times it’s trial and error anyway because the clerk or the magistrate might want it different every month to month as they develop their procedures.
Conclusion and TakeawaysThis is a good example of a court order title. They call it quiet title. A couple of takeaways from this video is, in most cases, your county is not going to have this. They’re not going to have these paperwork examples for you to use. You’re going to have to fill it out on your own. Now our website will have some examples you can use. The other takeaway from it is that it’s enough of a process that some counties are creating this. They give you instructions. We’re on page four right here, four of 16. The instructions are the first five pages. What to do for service, what to do for submitting a case, what the filing fees are, hearing date finalized, it gives you all the details. So the instructions are important. Just having these forms by itself isn’t enough. If you had these forms but didn’t know the instructions, you’d be out of luck. So make sure that you read through some example instructions from some County. This particular County in Kansas has it. There are a few counties in Ohio that have it. Get an idea of what the instructions are. We have videos that will give you some instructions as well. We also have a title service if you want assistance with this. We could do that, but keep in mind that not every County calls it the same thing. Some call it court order title, some call it magistrate title, some call it quiet title, some just call it a petition of ownership, some call it a writ of mandamus. Forget about the language, the wording, just do the process that matches for what your county is. If you have any questions, you can reach us on our website. We’re glad to be of assistance.
Title Jumping ExplainedWhat is title jumping and how is it a problem for you if you’ve purchased a vehicle or you’re trying to sell a vehicle? Well, a title jump is when a vehicle title is signed over and left blank on the back of the title or flip from one person to another without the first buyer getting a new title in their name.
Legal ConsequencesThere’s a really good article from hot cars about how it can be a serious criminal problem—fines, penalties, and imprisonment. There’s actually people that are in jail for doing title jumping. It’s called the jump title or float title, sometimes called a skip title.
The Illegality of Title JumpingYou buy the car and then sell it without putting it into your name. So first you get an open title, meaning that somebody signs the back it doesn’t fill in the buyer in almost every state. It’s actually a crime to sign a title without writing in the buyer’s name and it’s illegal highly legal in all 50 states according to this article.
Exceptions and Legal FrameworkThere’s a couple states that allow exceptions for it if there are certain conditions met, talks about here extenuating circumstances somebody’s died or there’s some other scenario but in most cases it’s illegal.
Reasons for ProhibitionThe reason for it is because the paper trail looks like the original owner just sold it to the last owner and all the people in between didn’t have any documentation the intermediate buyers were not recorded and that’s a problem because it doesn’t keep track of who owned the vehicle and it also evades taxes and fees.
Curb Stoning and Dealer’s LicensesAnother reason is that there’s some people that try to do what’s called curb stoning where they buy and sell vehicles without getting a dealer’s license so if you’re some person who wants to buy cars from auctions and um flip the car real quick before you put in your name that’s a way to be in a legal dealer.
How Titles WorkLet’s take a look how a title works and what a jump title would look like. Here is the back side of a typical vehicle title and how you would fill that in. First of all as a seller you put your name printed here you sign it there and have it notarized as the buyer you sign it saying you’re acknowledging that the vehicle is transferred to you.
Open Titles and RisksIf you do not sign it or put your name as a buyer this now becomes an open title so anybody could put their name there first of all there’s a risk that if somebody finds this title they can just write their name in and now the owner.
Confiscation and Legal ConsequencesHowever if a person wants to just flip a vehicle and have it signed over to them maybe they’re gonna resell it right away and they don’t have anything written here then they could jump the title or skip the title that creates an illegal act that could create title problems later we talked to a client earlier today actually who went to the dmv with a title that was an open title and the dmv confiscated the title and put a flag on the system that means now the owner who was listed on the front of the title has to come forward and sign some forms before the title be transferred and good luck with that if you’re the buyer getting that owner to come forward because they already have your money so let’s take a look at another example of a title reassignment to see how that might work here’s another example of a reverse side of a title that shows places for reassignment so first it says any.
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