Solving Vehicle Title Problems – Webinar

One of the most common types of issues we deal with clients involves difficult title problems for motor vehicles. The reason it’s difficult is the title is a legal government document that’s issued only by government agencies, and unless you have all your ducks in a row, they’re going to give you a hard time on issuing you a title. This is why a lot of people run into these types of problems getting a new title in their name for a motor vehicle.

Overview of the Presentation
We’re going to jump right in and talk about a few subjects. In the presentation, we will cover the requirements for getting a title, the difference between a duplicate title and a title recovery, abandoned vehicles and the misconceptions surrounding them, mechanics liens, the famous or infamous Vermont loophole, lien releases and lien holder issues, bonded titles, court order titles, and how all these relate to the new calendar year 2023. If you have questions during the presentation, type them into the chat. We’ll keep an eye on them, and if they’re things that will be covered in our regular content, we’ll address those when that subject comes up. We’ll also have some time at the end to answer other questions from the chat or from our live viewers that are emailing in. Expect about 25 minutes for the primary presentation and additional time for questions.

What is a Title and Why is it Needed?
The first topic to get into is what a title is and why it’s needed. A title is a legal government document, as you can see in the picture on the left. This is an example of a vehicle title. Notice it is a certificate, not just a blank piece of paper. It’s not something you can print off from the Internet; it’s an official form, kind of like money, with scroll work and watermarks on the back. It’s issued by an agency, usually the Department of Motor Vehicles, Secretary of State, or Bureau of Motor Vehicles, depending on the state. Remember, you can’t buy a title from a company or download one from the internet; it only comes from the government agency.

Getting a Title
If we look at an example from the state of Oregon, one of the requirements for getting a title is having the original title or ownership document from the last owner. In order to get a new title, you’re supposed to have the last title from the last owner signed over to you. But if you’re here watching this, it’s probably because you want to know how to get a title if you don’t have the old title. If you had the old title, you wouldn’t need much help; you could just bring it to the DMV, turn it in, and they would give you a new title.

Duplicate Title vs. Title Recovery
A duplicate title is a topic many people ask about. A lost title or duplicate title is when you had a title with your name on it printed from the DMV, and you just lost it and want to get a replacement. The only person who can apply for a replacement title certificate is the person whose name is on the title records. Nobody else can apply for a lost title duplicate replacement. If you try to get one as a replacement, they’re going to look it up and say, “No, this title is in the name of Joe Schmoe, and you’re not Joe Schmoe.” The alternative is to pursue other methods such as bonded titles, civil liens, or the Vermont loophole.

Bonded Titles and Alternatives
You could pursue a bonded title, a civil lien (court order title), the Vermont loophole, or a prior owner transfer. We will cover all these in more detail. It’s important to avoid mechanics liens or abandoned vehicles. Specifically, an abandoned vehicle is a status where everyone abandons it, and you have to surrender it to the state, which then auctions it off.

The Vermont Loophole
The Vermont loophole is infamous, often mentioned in various media. It involves applying by mail to the state of Vermont to get a registration ownership without a title. You only need a bill of sale. However, there are downsides, such as paying sales tax based on the vehicle’s full retail book value and the risk of your state not accepting the Vermont registration as a title.

Civil Lien (Court Order Title)
A civil lien or court order title is a powerful way to get a title. You file documents with the court in your county, including a petition, a letter of non-interest, and an affidavit. The court may require proof of possession and identity, and then they give you a judgment of ownership, which you can use to get your title from the DMV.

Bonded Titles
A bonded title involves getting a surety bond that backs up your ownership claims. It is like an insurance policy for the DMV, guaranteeing your statements. However, it’s a branded title, which can make it difficult to sell or finance. Some states don’t offer bonded titles, so you need to check if your state does.

Prior Owner Transfer
A prior owner transfer involves getting the last owner to get a duplicate title. You should send an official form by mail, filled out and typed up, to the last owner, making it easy for them to sign and return. Do not try contacting them by phone or email, as they might ignore you.

Lien Releases
If your vehicle has a lien on it, you need a lien release form signed to clear the title. Send the form to the lien holder, and if they don’t respond, you might need to get a court order title. Even if there’s money owed on the vehicle, many times the lien holder will release the lien if you contact them as an innocent third party.

Special Cases and Additional Resources
For vehicles with brands like salvage or rebuilt, you need to follow additional steps before getting a title. There are resources available on various websites, such as car titles, lien titles, auction titles, and more. For more complicated cases involving dealerships going out of business or needing investigative services, consult with a title agent or private investigator.

DMV Contact and Damaged Titles
Contacting the DMV can be challenging. If you need to get information, it’s best to go in person and get answers in writing. If you have a damaged title, get a new title with your name on it as soon as possible. Titles are very important documents, and getting them properly processed is crucial for ownership and future transactions.

Conclusion
In summary, dealing with title issues requires understanding the specific requirements and processes for obtaining a new title. Whether it’s through a duplicate title, bonded title, civil lien, or other methods, it’s important to follow the correct procedures and be aware of potential pitfalls. For further guidance, refer to the available resources and consult with experts if needed.

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Mechanics Liens For Vehicle Titles

So what happens with mechanics liens or storage liens? The question comes up quite a bit from our clients who are auctions, dealerships, repair shops that have vehicles that have been left there that they need to get off their lot or to get rid of or to get money to pay for the repairs that were done and never, um, paid for by the vehicle owner.

Mechanics Liens for Private Citizens
What about mechanics liens for private citizens? Can you do a mechanics lien to get a title for a car that maybe you purchased and didn’t get a title? Maybe you want to charge storage for a car that’s in your driveway. Can you do that? We’re going to take a look at mechanics liens in general and a few examples in some states to show what the rationale is behind these. What is the common logic behind it?

Federal and State Laws
Because in reality, even though mechanics liens for vehicles for cars and trucks are done differently in every state, the origin of the rules comes from federal law, so you have to kind of have the same process in most states even if it’s a little bit different for each jurisdiction.

Definition of Mechanics Liens
First of all, what is a mechanics lien? Well, technically a mechanics lien, sometimes called a garage holder’s lien or a repairman’s lien, is a process for a legitimate repair facility or automotive facility to get payment for a vehicle that was brought into their facility for repairs or service or storage and the person who owned the car never paid for it.

Practical Example
So somebody brings in a car, says, “Hey, fix my transmission.” You fix their transmission, and then they say, “I’m not paying for it,” and they leave the car there. This is a way for that repair facility to get compensated for their legitimate work on the vehicle and get the car off their lot so they don’t have to be stuck with a car and no money.

Authority and Misuse
Now, it gives some power and authority and privilege to a repair facility to get a title for a vehicle because, in fact, you’re taking away the ownership of that vehicle from the owner for your benefit. So you have some extra authority to do this. Because of that, sometimes this process is misused or abused by repair shops that say, “Hey, I’m going to use this to get titles for my buddy who bought a car on Craigslist that maybe didn’t get a title, right? I’m going to put in a fake mechanics lien.” We’ll talk about that later, but you have to be very careful using this because it’s very highly audited.

The Process: Example from Virginia
So what is the process? Well, here’s an example from Virginia. Mechanics lien storage application: You have to fill in this form. What else do you have to do? You have to attach an invoice that shows you have a mechanics lien under the code in the amount of whatever it is, and that invoice has to be a repair order from the owner of the vehicle authorizing you to do repairs, right? So if you don’t have authorization to do the repairs, you can’t just claim a lien on any vehicle.

Steps to Follow
First thing you have to do is send in a vehicle record request. You notice that’s the first thing. You have to put your name and address of your company and your FE number of your company, your tax ID number, your user agreement number, and street address where the vehicle is held. Then you have to put in a vehicle record request. Basically, you have to submit an inquiry to the Department of Motor Vehicles to get a printout of the ownership and lien holder of that vehicle. You have to do that first, and you’ll see all these other states have that as the first step.

Importance of Initial Steps
Why do you have to do that first? Because if you don’t do that first, the rest of your process will be voided by the government. If they don’t see that you ask the ownership records for that vehicle first thing before you send out certified letters or notices or auctions, they’re going to get your package, and they’re going to reject it because you didn’t ask for this first, right? And you have to have a reason for it. I understand it is unlawful to use this information for any other purpose. Ownership information is protected under federal law called the Driver’s Privacy Protection Act (DPPA), so if you ask for the government to give you the private name and address, of that vehicle owner, you have to have a good reason, and your reason of a mechanics lien is a good one. But if you use it for something else, you can get in trouble. I certify the information will be only used for the purpose.

Completing the Process
So you put in the VIN number, you put in the name of the person that’s asking for it, then the DMV will fill out this part. What do you have to do? Mechanic or storage lien requirements: What are the requirements? We’re going to take a look at this box right here. If the vehicle is worth between $12,000 and $25,000, first you have to ask for that vehicle transcript. That’s the first thing on the list, first bullet point. You have to notify all owners and lien holders by certified mail that you’re intending to sell the vehicle at least 10 days before the auction. Notice that that comes after the vehicle transcript. Here’s why: because if you send out that notice and it’s dated before you get the transcript, they’re going to say, “Where’d you get the information from?” Because it could be wrong. You have to have it dated afterwards.

Auction Requirements
You have to hold the vehicle for a minimum of 30 days. You have to advertise the date and time of the auction 10 days before the auction. So you have to offer this at auction. Now, you probably don’t have to sell it at auction. If somebody bids on the car $1,000, you can say, “I’ll bid $1,001,” and you can own the car. You have to petition the district court in the city or county to order the sale, so you have to get a court order for this. Then you have to be granted the petition, you have to hold the auction, and then you have to get an affidavit from the sheriff that said you complied with the auction and the other criteria. Sounds like a lot of hoops to jump through. You might think, “Well, this is Virginia. It’s a lot harder in Virginia.” Well, we’ll look at some other states.

Compliance and Qualifications
Affidavit of compliance must be completed by the lien holder and be submitted with the rest of it. Vehicle qualification: Does it qualify? Is it non-repairable? I have done all of these. I applied to the DMV to get the lien holder information. Well, guess what? That’s the first step. You have to hold the vehicle in possession for 30 days. I made notice of intent to sell the vehicle. I arranged for the vehicle to be sold. You have to check off you did these. I certify I have complied with these. I certify that all the information is true and correct. If it’s not, it’s under penalty of perjury. Make a false statement as criminal violation.

Audits and Fraud
This is because many times these are used for false purposes. Fake mechanics liens are ubiquitous, and they’ll check this out. They’re going to audit these and make sure that, first of all, you did it right. They’re also going to take a look at your mechanic shop to make sure you’re not doing too many. They’re going to compare the mechanics liens with your tax receipts to see how many dollars in taxes you’ve collected for all your customers that month, and if it’s x amount of dollars, they know there shouldn’t be 20 mechanics liens if you only collected $1,000 in taxes, right? Like, it just doesn’t add up. So they’re going to audit your individual mechanics lien packages and also audit you in general because they know there’s a lot of fraud going in.

Checklist
Here’s another checklist, right? Did you do these things? Did you get the transcript? Do you have the NADA screen value? Do you send the fees? Do you have a bill of sale? Do you have all these things? If you don’t have all these things, they’re just going to reject it. So there’s one example. Let’s look at another state here in a moment.

Example from Utah
All right, so here we are back again looking at another example of a repairman’s lien. You can see that’s what they call it here in Utah. Certificate of sale: What do you have to go through in Utah? You have to have your company name for your repairman information, right? Your business information. You also have to put a statement saying after lawfully advertising the lien, I certify the vehicle was sold to the highest bidder. So you can’t just take it to yourself. You have to take bids on it. Now, normally people don’t come bid on it, but you have to at least offer it.

Utah’s Filing Rules
Here are the rules instructions for filing it: At least 30 days before you sell it, you have to send certified letters to the registered owner. How do you know the registered owner? Well, you have to put an inquiry to the DMV to get that name. You can’t go by what you have from the customer’s note that they gave you or what you found in the vehicle. You have to get a registered or certified printout from the DMV. The customer responsible for the work order also has to be notified. So if the owner and the person who brought in the car are two different people, you have to send to both. The certified letter has to have in it the VIN number of the vehicle, the location, the name and address of the owner as indicated on the work order, and any person claiming an interest. So if there’s a lien holder, you got to send it to them too.

Sale and Notice Requirements
The name and address of your place, your garage, the total amount owing for the services, any interest and storage fees. Remember, you can’t just make that up out of thin air. The interest and storage has to conform to the law, and you have to have the date and time of the sale. No property can be sold earlier than 45 days after you complete the repair, so you have to wait at least a month and a half. Explanation of the right to claim lien: So you have to print out the law that shows how you can do this and also let the owner know that they have the right to recover by posting a bond or paying for it before the sale takes place. You have to also put an advertisement in a newspaper saying you’re going to offer it for sale. That way you get interest in it.

Final Steps in Utah
When the sale is done, you have to fill out all the forms: the TC 839 R, the receipts for certified letters, the copy of the certified letters, proof of publication, copy of the signed work order. If you don’t have a signed work order, you’re out of luck, and then you send it to the DMV, but you also have to satisfy any registered lien, right? So it doesn’t make liens go away in Utah. So that’s another difference you have to look at.

Example from Wisconsin
Last but not least, what about Wisconsin? Wisconsin also has involuntary transfer mechanics lien, right? And you have certain rules you have to go by there. The rules are you have to say, “I am a mechanic who has prepared a written repair order that clearly describes the repairs. The repair was given notice, and they didn’t abide by it,” and you have to sign it under penalty of perjury. And then you go through the same process. You have to verify ownership by getting a vehicle driver record request. You have to wait for that to come back. You have to send out a certified letter. Most of the rules are the same in different states because it goes by federal law.

Conclusion
So here’s the bottom line. If you’re thinking about doing a mechanics lien, first of all, make sure you’re an actual mechanic and you have the right to do this. If you’re not, you’re wasting your time. Now, you might say, “Well, I’m a private person, I’m just a civilian, but I’m going to get my buddy who’s a mechanic to put through a fake mechanics lien.” Be very careful because, like we talked about earlier, the government is going to audit these, and if they contact the prior owner and they say, “No, I never brought my car into that shop. I sold that car on eBay or Craigslist a couple weeks ago,” now they’re going to pull your mechanics lien and your buddy’s license will be at risk. Lots of people get in trouble for doing fake mechanics liens, so don’t do that.

Alternatives
There’s other ways to get a title. In fact, many of our clients who are mechanics that could do a mechanics lien, they would rather do a court order title because it’s easier, it’s less hassle, less headache. You don’t have to wait 30 days, 45 days. You don’t have to have all this documentation. So consider other methods. Court order title: You can see the link below for more information about that. But if you are set on doing a mechanics lien, this will give you a couple of examples. Every state’s a little different. Our website will give you instructions on how to do it if you want to do it yourself. We also have a title service if you want to have us do the work for you. Mechanics liens are a valuable way to recover money as a mechanic, but by itself, it shouldn’t be a way to try to get a title only in particular scenarios.

Watch our YouTube video: https://youtu.be/NpxDQqz9QP4?si=wggl9SRx862_JGRp

Repo Vehicles Are Backing Up With No Titles

Suspicious Activity in the Towing Business
If you are in the towing or vehicle recovery business, you may be noticing something going on with lien holders and lenders that might be suspicious. What’s happening is you may be getting contracts to repo vehicles from borrowers that are delinquent or to store vehicles for vehicles that have been recovered. Then the lien holder either doesn’t pay for the tow or recovery or even really want you to send the vehicle to them or to an auction.

The Real Motive of Lenders
The reason why is because there are some vehicle lenders who are only looking to get the asset out of the hands of the borrower. They don’t necessarily want the asset back; they don’t necessarily want to have the car in their possession. And you might think, well, if they’re repossessing the vehicle, why don’t they want it back? Well, let’s look a little bit farther backwards at some history. There are many vehicle borrowers who have stopped paying for a vehicle, delinquent on their loan, who have contacted the lender and have told them, “Look, just come get the vehicle. I don’t want it taking up space in my driveway. I don’t want to have anything to do with it.” And the lien holder or the lender tells them, “We don’t want it. We don’t want the car, but we’re not giving you a title. We’re not clearing the loan. We just don’t want the car.”

Borrower’s Dilemma and the Impact on Recovery Firms
Well, now the borrower’s in a bad spot because they have a car that maybe is not running, maybe it’s inoperable, maybe it’s damaged, or maybe it’s just not really that desirable to have as a vehicle, and it’s taking up space. If you are an automotive recovery firm, a towing firm, a repossession company, you may be thinking, “Well, this sounds very familiar. I’ve repossessed ten vehicles for this bank, and they’re sitting on my lawn. I’ve asked the bank, where do you want me to bring them? Do you want me to bring them to an auction? Do you want me to send them to you? Do you want me to bring them back to the borrower?” No. “Okay, well then send me my fee for towing the vehicle while it’s still in repossession.” They’ll give you excuses. Maybe the company that actually brokered the recovery is out of business. Sometimes it wasn’t directly from the lender; it was from a freight brokerage company.

Lenders’ Business Strategy
Maybe you’re a storage location for automobiles that have had vehicles delivered to you by a towing company for a bank, and it’s taking up space, and you’ve got to make that space available for further vehicles. Well, here’s what’s going on behind the scenes, possibly, not every case, but possibly. The lien holder is not in the car business. They’re not looking to buy and sell cars; they don’t want cars back. They’re in the money business. They want to collect payments and money from the borrower. If the borrower has the vehicle taken away from them, there’s a very short window of time—15 to 20 days, sometimes 30 days—where that repossession is an incentive for the borrower to make good on the payments, to get caught up on the payments.

Economic Realities of Repossession
If the borrower doesn’t make good within 30 days, the lender knows from experience that the borrower doesn’t care about the car. The leverage of yanking the car away from the borrower is not going to make them pay more. Sometimes the borrower just doesn’t care about the car. They figure, “Well, once it’s gone, I’ll get something else,” or they just don’t want to deal with it. Lenders have learned over the years that a high percentage of vehicles that are repossessed are not worth in value the dollar amount it will take to process the recovery.

Costs Involved in Repossession
Meaning, pay the repo company their fee, pay the storage, pay the shipping to the auction, pay the fees for refurbishing the vehicle for the auction, cleaning it up, detailing it, making it run right, paying the auction fees, and then selling it at a discounted rate because auctions are wholesale transactions. So, for example, it may be a vehicle that has a book value of three thousand dollars, but at wholesale auction, it’s gonna sell for a thousand. Well, you might have a two hundred dollar fee for the repo company, a two hundred dollar fee for storage, 200 for shipping to the auction, 200 in auction fees, and 100 reconditioning. Well, now you have 11-1200 worth of fees, and you’re only going to get a thousand for the car. So, why not just pay no fees and let the car be somebody else’s problem? That’s the mentality of the lender.

The Condition of Repossessed Vehicles
Now, that’s assuming the car is even running or driving. Many of the vehicles that are delinquent on payments with a borrower, the reason for the payment being delinquent is because the vehicle is inoperable. It has a blown transmission, the engine’s no good, it was involved in an accident, and it’s crashed; it can’t be driven. Now, that’s not the case all of the time, but it might be 20-30 percent of the time the vehicle is inoperable. Well, how will the lender know? The lender doesn’t know that, but if you factor that into the percentages, they say, “Well, if thirty percent of the cars are going to be worth zero and seventy percent of the cars are going to be worth a thousand and it’s going to cost us a thousand dollars a car to pay the fees, then let’s not bother getting the cars back. Let’s just use the repossession as a lever, as a threat, to try to get money. If it doesn’t work, then we just won’t pay anything. The repo company, they’re out of luck. The towing company, they’re out of luck. We’ll just let them deal with it.”

Financial Impact on Recovery Companies
Now, where does that put you as a repossession company, a towing company, as far as your finances? Well, you’re not getting paid by the repo by the lending company. The borrower really has no obligation to pay you anything. If they’re not going to pay the payments on the car loan, they’re not going to pay you any fees. Well, what about you getting a title? Well, that’s tricky. In every state, there are certain requirements or certain procedures for automotive businesses to do a mechanics lien or a towing lien or other types of processes to get a title for the vehicle to sell it to recover your losses. The problem is that the towing lien process or mechanics lien process has a lot of hoops to jump through, and more importantly, it doesn’t work every time.

Challenges with Lien Processes
Even if you do all the paperwork right and you do all the processes as described by the state statutes, they can get rejected for many reasons. So you might be in the same boat as a lender. You try to do a towing lien and you spend all the time and effort and labor and cost to do that and then find out half of them don’t get approved because of a procedural error, timing error. Sometimes if it’s not done within 30 days of when the loan was delinquent, it doesn’t qualify. So they’re going to look at when the original repossession was issued. It might have been a year ago. Too bad, you’re out of luck. And every state’s different. There are some states that have actually eliminated towing liens from being qualified to get titles because of a high fraud rate of using these liens.

Possible Solutions
So, to make a long story short, if you are a towing company or a recovery company and you have vehicles that are backed up on your lot that the lien holder is saying, “We don’t want them back,” and you want to try to dispose of them, you have three options. One option is you can make the lender, they’re not going to pay you, they’ve already said they’re not paying you, don’t try to beat that dead horse. You can make the lender give you the proper repossession delinquent title transfer forms. It’s unlikely they’re going to do it voluntarily, but what you might be able to do is if you prepare all the forms that the lender would have to submit to the DMV to process a repossession title and just have them sign them, right? The lender is probably not going to go through the trouble to process all those forms, but if you prepare all the forms, you get all the documents’ i’s dotted and t’s crossed and just provide them to the lender just for one thing, their signature. That’s it. You might be able to do that.

Mechanics Lien and Towing Lien Processes
Number two is you could process a mechanics lien or a towing lien. Same thing, fill out a bunch of forms, go through all the steps. It takes about 90 days to six months, depending on your state, to do all the notices, all the newspaper publication requirements, the auction requirements, and 50 percent of the time you’ll end up with a title. Fifty percent of the time you will end up with nothing, but you could try and see, maybe you get half of them, that could be worth it.

Disposal Option
The third option is to simply dispose of the vehicle, to have a salvage yard, junkyard, towing company just come get the car and get rid of it. You’re not going to get any money, but you also are not going to be out any money for filing mechanics lien or your labor for trying to get a repossession title. Now, option number one might sound like a good option. Well, just have the lender give me paperwork, a lien release, or a foreclosure repossession notice.

Legal Implications for Lenders
The problem is some lenders are very hesitant to do that because repossessing a vehicle is one legal threshold. It’s, well, you didn’t pay your bills, we are taking your vehicle. Okay, fair enough. Changing the ownership of that vehicle is a whole different story. Once you change the title from your borrower to somebody else, now you’re doing something that might have a higher legal threshold, and if a lender does that without the proper authorization or if it could be contested by the borrower, they can get sued. So sometimes they’re just as comfortable repossessing the vehicle, getting it out of the hands of the borrower, but not actually following through on the formal title transfer because that could put them in hot water. And letting it sit like that, they’re not letting the borrower get away with a free car, but they’re also not taking the car ownership away from the borrower, kind of like a legal limbo of a vehicle.

Towing Company’s Predicament
If you are a towing company or storage company with ten cars on your lot, the legal limbo is creating a problem for you because it’s taking up space, and more likely you are out money because you performed a service for the lender that’s not paid for and is never going to get paid for. You can try to do mechanics lien and towing lien, there’s no harm in trying, just understanding that they don’t all work. You would think that, well, it should work because I towed the vehicle and I have rights. Well, guess what, the statutes of your state may be a little bit more restrictive than that. Most states have statutes that protect the borrower and the owner from just having a vehicle title snatched away from them without proper paperwork and without the loan paperwork being certified as delinquent and going through the legal channels. Simply just towing it might not be sufficient. There may be a way to do it, but there’s also, like we said, many protections in the law about how long you have to do it. You can’t wait too long, but you can’t do it too soon. If you don’t send out the right notices, it’s void.

Legal Advice and Risks
If you are a towing company also, if you’re going to do a mechanics lien, get good legal advice. Because if you do a mechanics lien or a towing lien on a vehicle that is a repossession and you end up getting a title switched to you or your buyer, the borrower is going to get a notice of that title transfer, and they can contest it. They could say, “No, I never authorized a tow, I never brought it in for service or repairs.” And if you checked off the wrong box on that application for a mechanics lien and said, “We’re a mechanic and we fixed the vehicle,” or “We towed the vehicle on behalf of the owner,” technically that may not be the correct statement of facts. Your facts are you were hired by a repo company to repossess a vehicle. That may not fit under the standards of a mechanic’s lien. It might in your state, but make sure you get good legal advice because what you don’t want to do is take an old sled 500 dollar car you’re just trying to get your money back for and turn it into a 10,000 dollar lawsuit against your business and have the consumer protection agency or the attorney general of your state clamping down on you because you just checked off the wrong box trying to recover three or four hundred dollars for a towing fee.

Regulatory Complexities
There are many, many federal statutes for fair credit reporting and consumer protection on auto loans to protect people from losing their rights in a vehicle just because they didn’t pay a loan payment. You might be accidentally stepping your foot into the middle of a hornet’s nest of huge consumer protection lending laws just because you towed a vehicle and are trying to get a title. So before you get into all this, make sure you get good legal advice from an attorney that knows what they’re talking about. If you want to file paperwork and do mechanics liens, that’s great, that may be a good option to go. But also remember, mechanics lien isn’t as simple as just filing one form. It’s a process over the course of two to three months of notifications, publications, auctions. It’s very tricky. We do them all the time. We know how hard they are. So you want to make sure you know what you’re getting into also with the mechanics lien so that you know, first of all, how hard it is, but also if it is a repossession that you might be unintentionally wrapping yourself up into a large-scale federal consumer protection finance industry regulations, and there’s a lot of regulations that go into that. That’s why the bank may not want to be getting the car back and getting a title because they don’t really care about repossessing the car, taking it from somebody. But once they start messing around with title, now you might be opening up a can of worms for regulation, oversight, and enforcement.

Practical Recommendations
So think about if the bank is hesitant on getting the car back and doing a title, the bank might know something you don’t as a towing company. So be very careful about that. In the meantime, what do you do as a towing company? What we recommend if you are a towing company that’s doing recovery or repossession for a lender or for a broker of a lender, that you get paid in advance or get a retainer for your work. Because we talk to hundreds of automotive industries every week, and they’re telling us all the time that the lenders aren’t paying. And the way they’re hiding behind it is they’re hiring a third-party brokerage company or a management company or a recovery efficiency company who hires you. You’re not hired directly by the lender. You’re hired by some broker or middleman, and they make a fee no matter what, and then they leave you holding the bag with the vehicle without a title and without payment because they don’t pay you. That’s the way they make money.

Financial Health of Towing Companies
So just be aware of what’s going on in the recovery industry and how that might affect your profit, loss statement, your balance sheet, your bottom line. And if you’re a towing company, it might be, you know, might be scary to say, “Well, either pay in advance or we’re not towing anymore for you,” because a lot of lenders are just going to say, “Fine, we won’t send any more business.” But if you’re not getting paid anyway, you’re better off not doing free work than just doing no work. What’s cheaper, having your tow truck sit there and do nothing and get paid nothing or have it spend six gallons worth of diesel fuel and four hours of labor for your employee and get paid nothing, right? How many paid recoveries does it take to make up for one non-paid recovery? A lot. It probably takes five or six or eight paid recoveries to make up for one defaulted payment from one client. By the time you look at how much profit you actually make off of one paid recovery, it might take seven or eight of those to come up with the losses you take on one person that stiffs you on the payment. And that goes for every industry. Make sure you’re not doing business for people that are likely going to stick you on payment or default on their contract.

Conclusion
The recovery and towing industry has this going on with lenders. Be aware of it as an automotive recovery expert, towing expert, so that you don’t end up with 15 cars clogging up your lot, thousands of dollars in unpaid invoices, and nowhere to go to try to solve it other than the temptation to do something that might get you into legal hot water.

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Transfer Car Title With No Signature Of Seller On Title

So, when are there allowances to not have a requirement for a signature on a previous title in order to get a new title? Most of the time, when you go to the DMV to get a new title for a vehicle, you will be required to have the signatures on that title from the prior owners. We’re going to look at a couple of exceptions where there are loopholes that you can use to get a new title without having the signature of the prior owner. In this instance, we’re going to look at the state of California.

Basic Title Transfer Requirements
Basic title transfer requirements and what the loopholes are where you don’t have to have the signatures on the title. For example, California title properly endorsed for transfer must have the following: if it’s co-owners with “and” the signature of each owner, meaning both; if the co-owners have the word “or” or “and/or” next to it, you can have either one sign it; if it’s joint tenants, that’s each; also, business entity have the business entity and the authorized signature on it; DBA, same thing; sole owners, trustees. So, this talks about who has to sign it and they have to sign the transfer form and the title.

Exception: Form 262
But if you notice, there’s an exception: a vehicle/vessel transfer and reassignment is acceptable in lieu of a signature line on the title. So, if you don’t have the signature or can’t get the signature on the title, this reassignment form, REG 262, is acceptable in lieu of a signature on the title. So, what does that mean? Well, here is form 262. It’s a vehicle/vessel transfer and reassignment form. Now, it has to be original, original signatures; you can’t do a photocopy. It tells you this form is not the ownership certificate, is not a title. It must accompany the titling document or application. So, if you have this in an application, then you can get a new title.

Using Form 262
So, how do you do this? VIN number, year, make, model, if it has a license plate, bill of sales included, who’s selling it to, odometer statement. Now, buyer and seller must handprint his or her name, date, and sign. What does that mean? You can’t do it electronically; handprint means exactly what it sounds like: hand with a pen. Okay, I acknowledge your dominant reading and the facts of the transfer. I certify under penalty of perjury this is correct. So, even though it’s a loophole and it’s an allowance, they’re telling you you don’t have to have it on a title. They’re taking it pretty seriously. This is a very important form. Seller section: I declare that the foregoing is true and correct, seller’s name, signature, date, and an ID number, driver’s license ID number, or for your dealer, you put the dealer number, and you print the name, put the address. It’s a one-page form, right? So, there is an allowance for not having the signature on a title.

Power of Attorney
Let’s take a look at some other possible exceptions. Here’s another method: using a power of attorney. So, it says the undersigned, and you put the name of the owner, county, year, make, model, hereby make and appoint another person to be the true attorney in fact to sign the name in any documents, title application, and transfer ownership. So, if you have authority from the owner under this power of attorney and specific to a vehicle, the reason why this is important is if you are contacting or approaching a third party to have them give you a power of attorney, you want to make sure that they’re understanding it doesn’t give you the right to sign over their house or open a bank account. It’s specifically for a motor vehicle and it has the year, make, model, and VIN number of that vehicle. That way, it also limits you from transferring other vehicles the person may own, which probably is not what they want. And you have to have your full legal name, driver’s license number, physical address, mailing address, and it has to have a notary because they want to make sure that the person is actually doing this voluntarily and it’s not a forged signature, it’s not some type of scam or a fraud. So, that’s another method of not having to have a signature on the title.

Duplicate Title Application with Ownership Transfer
And here’s a third method, which is available in most states, more states than you might imagine. It’s a duplicate title application with ownership transfer. So, let’s suppose that the owner of the vehicle is not going to sign that prior title because they don’t have the title or they can’t find the title or the title is not available for them to sign. Maybe the title is in another location. What the owner can do is simultaneously get a duplicate with ownership transfer. The net effect of this form is to get a new title issued with your name on it as the buyer, as a new owner, without having the old title present. So, it’s not really even a duplicate title; it’s just a new title with your name on it. In reality, behind the scenes, it’s a duplicate title, but then right away getting a new title with your name. But the net effect is it’s just “get me a new title with my name on it.” Now, it’s pretty complicated, pretty important. In fact, the most important thing on it is a warning to the buyer. They’re warning the buyer that you have to do these things. Signature has to be notarized. You can’t have any liens on it, so you can’t use this to try to sneak a title out from a lien holder. It’s only for free and clear legit vehicles.

Filling Out the Form
So, what do you do to fill out this form? Well, first you put in the VIN number. We see hundreds and hundreds of DMV forms every day that we work on. We love forms like this where the VIN number is right at the top because in reality, the most important detail of a vehicle is the VIN number. Everything else is secondary. When we see the VIN number first, we know that that titling agency, titling authority is really paying attention and efficient about what’s important on a vehicle. Then, year, make, model, VIN number, most important. Okay, so now next is the owner of record, the seller. So, this is who’s on the title right now, whose name is on the title record in the DMV database; that goes here. Then, the purchaser. So, that would be you, Joe Schmoe, 12 Main Street, address, whatever it is. Now, the purchaser has to sign this too. You might think, well, the seller has to sign it; who cares if the purchaser signs it? They want to make sure they’re identifying the person who is the new owner properly because they don’t want somebody to put a vehicle in somebody else’s name arbitrarily when it’s not really what’s supposed to happen. So, that’s section number two. If there’s a lien holder, they would sign here to take off the lien. If you’re putting a new lien, that would go here. Dealers would put information on this section.

Notarization
Here’s the most important part: the owner has to be notarized. I hereby make an application for duplicate title and bold letters. I also transfer to the party listed in that section. And the reason they put it in bold is because there were a few instances where people were just saying, well, I just want you to get a duplicate. You’re not transferring it over. And they didn’t know that they’re actually getting rid of their vehicle. They’re waiving their ownership. This does both. This transfers all interest in the vehicle to a third party, and it has to be notarized. And it gives you the instructions. Mostly, most of it’s what we already talked about. Fax copy is not acceptable. It’s got to be the original ink signature with a notary. You can bring it in person. We recommend mailing it because when you mail it, it goes to the headquarters rather than a branch office, and they know how to handle it better. No big capital letters, bold. In all cases, failure to complete any of the sections will result in the application being rejected. So, you can’t leave anything blank that’s required. You have to have the whole thing filled out. Enter the complete vehicle information. Enter the owner information. We already went through this. Fax copy is not acceptable.

Costs and Fees
Well, how much does this cost? Not that much. The duplicate title fee in this state is $14. Most states are $5, $10, $15, $20. There’s a few states that are $40 or $50. There’s only two states that are much higher than that. The state of Florida is $79.50. The state of Illinois is $95. Those are the two most expensive. Pennsylvania is $53, which is in the middle of the high range. But most states are $5, $10, $15. Texas is $2 for a duplicate title. Now, if there’s a transfer of the vehicle, if there’s a transfer of the vehicle, then you may have to pay sales tax. Most states have sales tax on a purchase, just like if you buy something at Walmart, you pay sales tax. Many states have sales tax on a vehicle. Now, some states do not require sales tax on a private seller transaction, only on a dealer transaction. Some states have no sales tax at all. Washington State, Florida are examples of non-sales tax states. Actually, that’s not true. Those are non-income tax states. Oregon has no sales tax. Wyoming has no sales tax. Other states have sales tax. You may have to pay a title search fee of $7 if you don’t have all the title information. You may be exempt from taxes. Certain instances let you not pay tax depending on what that state allows for exemptions. But the most important thing is here’s another option of not having a signature on the title.

Notice of Transfer of Ownership
And here’s one other trick or loophole that sometimes will help transfer a title. This is a notice of transfer of ownership of a motor vehicle. So, this is mostly designed, and many states have this, to remove liability from the old owner to the new owner. Meaning that, let’s say if you sell a car to somebody in a Walmart parking lot and you give them the keys, you give them the car, give them a bill of sale, even if you give them a title, what happens if before they put it into their name, they go out and rob a bank or do a drive-by or get in an accident and they just run away from the car? Well, I guarantee you the cops are going to look up who that car is owned by and they’re going to come knocking on your door. And if the vehicle caused damage or racked up towing fees or parking tickets or went through toll booths and didn’t pay the fee, you might be liable for that. So, most states have a form that you as a seller can report a sale so that you’re not liable if the person doesn’t put it in their name fast enough. What a lot of people don’t know is, in many states, if you report that sale and the buyer never applies for a new title, in the system they’re going to put a memo of ownership for that person. Once that memo of ownership is recorded, the buyer can then go apply for a new title even if they don’t have the old title.

Alternative Method
It doesn’t always work, but here’s what you can try to do if you are a buyer of a vehicle and the seller didn’t give you a title for whatever reason and they lost it, they’re not willing to help you out. If you can ask them to sign a form like this notice of transfer, a lot of times a seller will be willing to sign this but not be willing to go through the hassle of getting a duplicate title. They’ll sign this one form but they’re not going to jump through hoops to get you your title. So, you get them to sign this form and you mail it in to the Department of Motor Vehicle Title Division, wait a couple of weeks for them to put it in their system with you as the buyer, then go down to that Department of Motor Vehicles with a new title application to apply for a title. Once the DMV looks up and sees that this seller put in a notice that you’re the new owner, they sometimes will accept your title application. It doesn’t always work, but sometimes if that memo name is already in their system, your name, they’ll let it slide. So, if all else fails, try that method of getting a title with your name on it without having the prior title signed by the last owner. It’s a little bit of a trick and it’s always much easier to get the last owner to sign something like this than to sign an actual title. If they don’t have it, they’re not going to wait in line at DMV, they’re not going to pay the fees for a duplicate title, but they might just sign this one form for you because it kind of looks like a bill of sale. And every state has a version of it. So, have them sign it, submit it to the DMV. Technically, it’s for making them not liable for damages after transfer, but in many cases, the DMV will enter your name as a memo owner or a subsequent owner or a contingent owner. Some states call it different things. And once that memo name is put into the system, you might be able to use that record to have your application for a new title be approved without having the prior title attached to it.

Conclusion
Those are four methods that very commonly will work without having to do a court order title or a bonded title or anything much more complicated to get a new legal vehicle title issued with your name on it in the absence of the prior title with the last owner’s signature.

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Why Are Vehicle Title Export Documents So Difficult?

Have you ever tried to export a vehicle and wondered why the Customs and Border Protection (CBP) needs all of those documents and forms? Did it seem like a very complex and bureaucratic process? Well, in the moment of trying to export a vehicle, you may not have thought that that process was beneficial to you, thought it was just a pain in the neck or something that really didn’t have any purpose. However, after seeing this article and seeing this reason for having these documents, you’ll probably see that it’s a good thing to have this customs process be as complicated as it is. Leave your comments below and let us know what experience you’ve had with exporting a vehicle and what questions you have about the process.

The HS7 Form
Well, here’s one of the forms: the HS7 form. It’s the infamous document that all exporters hate to see, hate to have to face. It’s one of many that are needed to export a motor vehicle, and motor vehicles are defined very clearly by CBP. You know what all the definitions are. Exporting a motor vehicle: the 19 CFR is the section that’s jurisdiction over all of this. Basic requirements of pursing and attempting to export a used self-propelled vehicle shall present to customs at the port of exportation both the vehicle and required documentation describing the vehicle to include the VIN. The required documentation normally is going to be the title, and it must be presented 72 hours prior to export because they’re going to do a background check on the vehicle, and that’s going to be important here in a minute. You’ll see why that’s an important part of it.

Documentation Requirements
And as you can see in the second section, the owner must provide to customs the original certificate of title or certified copy and two complete copies of the original. So, you need the original title and two photocopies. If there are any third-party ownership claims, like a lien or another second owner, you have to have it in writing the description of the vehicle and a release of that lien holder or leased vehicle. So, it’s pretty clear what you need. You need the HS7 form and a couple of other documents.

Importance of Proper Documentation
The reason why is, and a lot of times exporters or clients will say, “Well, look, this vehicle has no title. It’s never been titled, hasn’t been titled in a long time.” Well, that’s the trick. Here’s the reason why this is important: a stolen 1968 Chevrolet Corvette was found 37 years later, right before being shipped to Sweden. So this 1968 C3, they used to call it a Stingray, had the little four louvers in the front quarter or the front fender. It says here nearly everyone wants to get their hands on one of these. It was a great car. 1968 was one of the probably the pinnacle of the Corvette model line.

Case Study: 1968 Chevrolet Corvette
So, here’s the car. In 1969, the owner had their worst nightmare. He lived in New York. The car was stolen. He had just gone through a divorce and paid $6,000 to keep the car in his name. He went years without knowing what happened to the car. After years of unknowns, luck finally turned up. The Corvette had been stolen, and the owner tried to ship the vehicle from California to Sweden. U.S. Customs had to complete a routine car check for the car to be shipped to Sweden. As it turns out, the 1968 Chevrolet Corvette had never been retitled. This is important. A lot of times, if you say, “Well, this car has been off the road, it hasn’t been titled, it’s a barn find, it’s in a field,” it doesn’t mean that it’s a legitimate vehicle. That’s the reason you want to get a title.

Importance of a Title
This owner who’s trying to export it, who knows what their knowledge is. They may have just bought it off of Craigslist or eBay or Facebook. Maybe they didn’t know the car was stolen. It doesn’t matter that it was stolen 37 years ago. These records persist for these vehicles. So the fact that this is a very difficult process is actually to your benefit because if it was easy just to ship or next board a vehicle or to get a title, then your vehicle wouldn’t be protected. Think about this guy who had his car stolen in 1969. It was only a year-old vehicle, barely, and now he has the car back. Think how much more that car’s worth. He may have paid $6,000 for it in 1968. Those cars are worth tens of thousands, sometimes six figures, and this paperwork protects you. So, if you’re purchasing a vehicle without a title, just remember that until you have a legal title document printed by the government with your name imprinted on the certificate, you’re at risk because you don’t know what other claims are going to pop up out of the woodwork. So, you want to make sure that you perform your proper due diligence on any vehicle before you take any action.

Due Diligence and Legal Protection
Look, this exporter may have been an innocent bystander. Who knows if he had any awareness that the vehicle was stolen? Probably didn’t. If he’s trying to export it, he knows the government’s involved. If he knew it was stolen, he probably wouldn’t be presenting it to the government to check out 72 hours in advance. The 37 years it was missing, who knows where it was? Maybe it was in a garage. Maybe the person who stole it figured, well, if I hide it for 10, 15 years, it’ll be forgotten about. Maybe it went through two or three owners. Maybe it was never put on the road. I’m sure they’ll be doing an investigation now to see how far removed the current owner is or the exporter is from the thief. Did they live near New York when that happened? It’s being exported from California. But if they can do a background check on that person and find out, well, they lived in New York near where it was stolen, that guy’s probably got some problems. But if there’s a lot of owners in between and kind of a murky history, then it may not come to that.

The Importance of Stories and Procedures
Think about your story as a vehicle buyer. Well, I bought it from a guy. He didn’t have a title. He got it from a guy. It was in a barn. Think about all the stories that you hear from sellers. The old man had it, and he died, and his kids didn’t want it. He sold it to me. That’s the reason for having all these forms and having to follow all these procedures from Customs and Border Protection. So, vehicles issued an original certificate of title, you have to have the title. If there is no title, you have to have a full background check, authentication of documentation. And as you can see, the USCBP is going to do all this. They did it for this guy’s car, and he got it back.

Conclusion
So, consider this due diligence performed by the government, whether it’s a VIN inspection by your police, whether it’s a customs background check, protecting your interest on a vehicle so you don’t end up with something that’s stolen. Or if you do have something stolen, it gets returned to you, the rightful owner. And if you’re a lien holder and you lent money on a vehicle, you also don’t have somebody who’s selling it or shipping it, because as it says right here, if there are third parties, they have to sign off. So, if you lent somebody money on a vehicle, we had a case a couple of years ago where an owner sold a motorcycle to somebody, and they let him pay half of it up front and then $100 a month to pay off the rest. And they rode it for a couple of months and stopped paying. Well, that evidence, that ownership was reflected on the title, and they were able to retrieve it before it was sold or dismantled or taken apart. So these title documents are very important to protect your ownership on a vehicle. Make sure that you get originals, not photocopies, and you verify the originals. We’ve had cases of forgeries of these documents. If you’re going to export the vehicle, you probably want to check it out before you bring it to CBP. Have your state patrol, state police, whoever it is in your jurisdiction double-check the documents to make sure your VIN number is clear. Just because the seller told you it’s clear or you ran a Carfax, which is a worthless consumer-grade background check, you’re not going to know if there’s liens, claims, back taxes, past due registrations, prior owners, or even stolen, for that matter. Sometimes these vehicles are registered as parts only or junk. Can’t do anything with them. So, you want to do a full background check on your own before you start submitting it to DMVs or even selling it to a third party, because if you do, now you’re passing along an ineligible vehicle. In some states, it’s actually a crime to sell a vehicle without a clean legal title. Check out our website for more. You can get all these documents for free to download. And let us know in the comments what your thoughts are on exporting a vehicle and these document requirements.

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