Who Holds The Title On A Financed Vehicle?

So when a vehicle is financed, where is the title? Who’s holding the title? This question comes up very frequently from clients in our car title division. What happens when a vehicle is financed is the owner of the vehicle, the driver, the borrower, they are listed as the owner on the physical title. The owner’s name is showing as the owner of the vehicle. However, there is a section on the title certificate that references the lien holder. So if you borrowed money, let’s say from Chase Bank to buy your vehicle, or Ford Motor Credit, the lien holder section will say the name of that lien holder printed on the title.

Role of the DMV in Title Issuance
So when the DMV or titling division in your state prints that title, they’re going to put that name in the title record and print it on the title certificate. Now, in most states, when that title certificate is printed by the DMV, it’s mailed to the lien holder. The bank actually gets that physical paper document, that certificate, and they hold it in their files while the loan is being paid. The name of the owner will still show as the owner. Technically, if you are, you know, the owner of the car, driving the car, you are the vehicle owner. You have insurance on it, you have it registered in your name, it’s owned by you. But the lien holder has what’s called a security interest or a chattel interest in that vehicle, and that chattel interest is what is their collateral to make sure you pay the mortgage or the car loan. If you don’t pay it, they can come get the car. Now they own it.

Selling a Financed Vehicle
But the record of that lien holder on the title also prevents you from doing something else, and that means selling it. You can’t sell the vehicle to another person with a lien on it because they are holding the title certificate with their name on it. Once you have paid the final payment on that loan, they then take that title from their records, sign it, stamp it paid, and they mail it to you. Now you’re holding it.

Owner Holding Title in Certain States
Now, there are a few states which allow the driver, the owner, to hold on to that title certificate even so. It still has the name of the lien holder imprinted on the title, so you still can’t sell it because it shows that there’s a lien against that vehicle ownership. So the title in most cases is held by the actual financial institution.

Paperless Titles
There’s a third scenario. Some states on later model vehicles, newer vehicles, are going to paperless titles. And what that means is there is no physical paper document issued and printed by the title division. There’s just an electronic record of that title. If you go to sell the vehicle, you can have a paper document printed if you want, but initially, they do not create that paper document. When that happens, then nobody’s holding the title. The lien is still recorded on the title record, the owner is still showing as you on the title record, but the paper document is not actually created.

Example of Electronic Titles
This is an example of a title. This is how a title looks for a vehicle when a vehicle is held under a non-paper title, electronic title state. That record is simply held by the DMV. Nobody gets a title. Once the lien is paid off, the financial institution will electronically clear that record from the title records at the DMV. At that point, you as the owner can print a paper title if you want. You can continue just to own it with a registration or transfer it to somebody else, or even if you trade it into a dealership, the dealership can look up that electronic title record and know that you’re the owner with no lien.

Leasing a Vehicle
There’s actually another scenario for the title of a vehicle if it’s leased. If you lease a vehicle, there’s another option. Now, we’re going to get back in a minute to lien holders and charge-offs and write-offs, how that works if the lien goes into default and if the lender doesn’t pick up the vehicle, what happens. But first, on a lease, you’ll find that on a vehicle that’s not financed by a bank but leased to you, now it’s going to be different. The owner is going to show the lease company as the owner. You’re not listed as the owner. You’ll be listed as a registrant. The license plate and registration will be in your name, but the title owner is the name of the leasing company, Taylor Motor Credit, whoever. In that case, the lease company will hold the title, or if it’s electronic, it won’t be issued at all. And once you pay the end of the lease, the car goes back to the leaseholder and you will never see the title. If you decide at the end of the lease to exercise your purchase option to buy the vehicle at the end of the lease, now the title is transferred from the lease company to you as the owner, and it will be like any other title transfer. Just like you bought a car from Facebook, it’ll have a signed transfer from the lease company to you.

Charge-Offs and Write-Offs
Well, if any type of loan goes into default and it’s not paid, many times the lien holder, the financial institution, the bank, whoever it is, will put it into collections. And after some period of time, they’ll stop really trying to collect it. They won’t spend any money trying to chase you around anymore, and they’ll do what’s called a charge-off or write-off. A charge-off of a loan, an auto loan, or any other type of loan is simply a designation from the lender financial institution that they no longer expect to get any money from this loan. It’s strictly a financial record, has nothing to do with the title. It’s a charge-off. And what that means is that when they do their balance sheet and asset disclosures to the federal government or for the taxes, they have to say that this loan is no longer an asset. We can’t count this loan on our books as something valuable to us. It doesn’t mean anything. Somebody owes us $7,500 on this car loan. We used to be able to put that $7,500 as an asset on our books like this money’s coming to us. As soon as it’s a charge-off, they have to say, no, we’re never going to get this money. So they can’t use it as an asset for financing, for their balance sheet, for any other purpose.

Impact of Charge-Off on Title
However, that charge-off event does not remove the loan record from the title. It does not take the lien out of the DMV records. If there’s a lien on the title document, if there’s a lien in the DMV records, it’s still going to be there after a charge-off. Now, if a vehicle is charged off, there may be an easier way to have it removed by requesting a lien release from the lender. That’s a different story. But up until that point, the lender or lien holder is still holding the title and have possession of that title certificate. Even if somehow you got your hands on it, it would still show that lien holder as having a beneficial interest or a security interest in that vehicle, which means you can’t sell it. Sometimes you can’t even renew the registration if you don’t have the title. So the lien and the title are two different things. The lien being charged off or write off does not remove it from the title record. In the meantime, the title certificate, that paper document, will be held by the financial institution until such time as that last payment is made.

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Vermont Title Loophole Pros & Cons

So what are the pros and cons of the Vermont loophole for car titles and how does it compare with other methods like a bonded title or court order title or prior owner contact?

Vermont Loophole Process
Let’s start with the Vermont loophole process. This is something that you’ve seen in hundreds of videos, hundreds of articles. Jalopnik, Hagerty Insurance—they’ve all featured it, and basically this is how it goes: If you have a vehicle you’ve purchased and didn’t get a title when you bought it and you went to your state DMV with a bill of sale or receipt or with no paperwork and said, “I want a title,” they basically threw you out and said, “We don’t give titles unless you have the old title.” That’s what you’re supposed to have—the last title for the vehicle. If you don’t have it, they’re not going to give you a new title. So you go back home, try to figure out what you’re going to do next, and you come across this Vermont loophole that you see or read about.

How the Vermont Loophole Works
The way it works is you apply through the mail to the state of Vermont with your bill of sale to get a registration for your vehicle. You’re not getting a title; you’re getting a registration. Once you get that registration, you can then use it as your proof of ownership, similar to a title, to apply to your state to get a title. Because what you want to end up with is one of these—you don’t want just a receipt or bill of sale because without an actual legal title certificate, you can’t do anything with that car or truck or motorcycle. You can’t sell it, you can’t register it, sometimes you can’t even get insurance on it, although some insurance agents will sell you insurance on anything if you give them enough money. So the Vermont loophole comes in handy.

Downsides of the Vermont Loophole
What are the downsides? Well, the biggest one that most people find out quickly is the cost. You will have to pay sales tax on your vehicle based on the full book value of the vehicle—not what you paid for it, not what your bill of sale says, not what you think it’s worth, what the book value is. Now, there are some different little tricks you can use with different book values to maybe mitigate that a little bit and lower the cost, but it’s not going to be based on a hundred dollars like your bill of sale says. How much is the sales tax going to be? Well, if the book value says your car is worth seven thousand dollars, the Vermont DMV is gonna charge you six percent sales tax on seven thousand. That’s gonna be four hundred something dollars in tax, plus their registration fee is another $76 for a car, $48 for motorcycles. Now you’re almost 500 bucks for fees. It might be worth it in some cases; many people want to do that, but you have to factor that in as a negative.

State Acceptance Issues
Another factor is when you go to take that Vermont registration and bring it to your state. Look, it’s a valid ownership document, just like a title from another state is, and the statutes in almost every state say they have to accept that as an ownership document. But just because a DMV regulation says they’re supposed to, it doesn’t mean that the person at the window you happen to talk to is going to know that. They don’t see a piece of paper that says the word “title” on it; they see a registration, so they might say, “Well, you can’t get a title with this,” and you might have to go back and forth and get a run-around and show them their own laws. There’s a bulletin you can get from the state of Vermont that’ll give your state DMV some information about that this is valid like a title, but that might be a hassle for you.

State-Specific Rejections
Some states have even declared, “Well, we’re not going to accept this.” We heard last year that the state of Indiana put signs on their window of their DMV saying, “We’re not accepting Vermont DMV.” Well, when pressured on that and when they were confronted about it, they found they can’t just say that. The Vermont registration is a valid ownership, so they can’t say that even if they want to. But for hundreds of applicants, probably, they ran into problems, and any state can do that at any time. They could give you a hassle about that. You can probably fix the hassle, and there’s a lot of tricks that you can use to make it less likely. We covered those in prior videos. Prepare the paperwork the right way, include some documents with your application to your state, some certain special documents that’ll make them pass through. Also, do it by mail; don’t go in person. There are some things you can do to minimize that happening, and it’s pretty rare, but that’s another potential negative.

Vehicle Eligibility Restrictions
What’s another negative? Well, it only works on certain vehicles. Your vehicle has to be 15 years old or older. So, whatever year it is now, 2022 minus 15, 2007. So, if your vehicle is 2007 and older, this will work. If it’s 2008 and newer, you can’t do it; you can’t use the Vermont loophole. You have to do something else.

Excluded Vehicle Types
What about alternate vehicles? There are certain vehicles that aren’t even eligible to register in Vermont. Certain military vehicles, old Humvees, Japanese mini trucks—you can’t register in Vermont, so it won’t work. Also, a vehicle that’s not roadworthy. Now, they don’t require that you do an inspection; they’ll take your word for it. They’re on the honor system, but a lot of clients make the mistake of saying, “Wait a minute, my taxes are, you know, $422, my car is all in parts, so you shouldn’t charge me that much,” and they’ll send pictures of their vehicle or a letter explaining that their car is, you know, not ready for the road. At that point, it will get rejected by the Vermont DMV because they only register road-legal vehicles, so that’s another downside.

Alternatives to the Vermont Loophole
We’ll get back to a few more downsides to the Vermont process momentarily, but what are your alternatives? Well, we’ll talk about two or maybe three alternatives that might be of interest, but they also have downsides, so you have to pick your poison, which one you like the most or hate the least.

Court-Ordered Title
One of them is a court-ordered title. What this entails is you go to the court in the county where you reside and you file a court case against the vehicle to have a judge declare you to be the owner of the vehicle by court order. Once that judge gives you that court order, you bring it to the DMV, slap it on the counter, and they have to give you a title. Period. End of story. This will work in any state; this will work in any jurisdiction; it’ll work on any vehicle. Now, what are the downsides? Well, first of all, it takes a long time. You might have to go to court two or three times to get through this process. Might take you three or four months. It’s pretty cheap; you probably only have to spend 50 or 100 bucks on court filing fees, and it’s almost a guarantee. As long as your vehicle is not stolen or sketchy or you have liens on it, it’s going to work. That’s what the process is for. You’re probably going to have to face some bureaucracy of how to fill out the paperwork because they don’t give you any blank fill-in-the-blank type forms. You have to start with a blank sheet of paper and type up what’s called a complaint or petition, and you might need some guidance on doing that. You can check out our website for information on that, but once it gets in the court system, the rest of it they’ll tell you what to do. You might have to send out some notices; you might have to put an ad in the paper, but once it’s done, it’s done, and now you have a clean title based on a court order, so it works.

Bonded Title
What about a bonded title? Well, this is something that works in most parts of the country. There are 50 states; I believe 38 of them do bonded titles in some form or fashion. What you do is you get a surety bond from a bonding agent, and instead of having the prior title, you use that surety bond to convince the DMV to give you a new title. What are the pros and cons? Well, the advantages are it’s cheap. You don’t have to pay tax to Vermont, you don’t have to do the two-step process of going to Vermont and then waiting, going to your state. It’s all done in your state. Downsides are, if you buy a surety bond, it’s not going to cost that much. If the car is worth, you know, seven or eight thousand or less, the bond will probably cost you about a hundred bucks. The downside is if you’re looking to sell this car or flip it, it might be a problem. There are some buyers that don’t want to buy a title that says “bonded” on it. Now, that’s up to you to figure out what your buyer would want, or if you’re not selling the car, then don’t worry about it. If you’re going to trade the car into a dealership, some dealerships don’t want a bonded title. Now, the bonded title designation will only stay on that document for probably three years. Some states it’s five; some states it’s less, depending on what the value of the vehicle is. So check with your state and check with our website for which states even do this. So if you’re going to keep it for three years anyways, don’t worry about it. After three years, it falls off the title.

Liability and Liens
Another downside is you’re not totally off the hook for liability. If you’re not sure of the history of that vehicle, that maybe somebody really is looking for it or there’s maybe somebody that’s supposed to have it, if somebody comes forward and says, “Wait a minute, that’s my car,” then the bonding company will give them the car back or pay them their money, and you’ve got to pay back the bonding company. So if you bought a car that’s a barn find and maybe, you know, it was Grandpa Joe’s old car and he died three years ago and, you know, some cousin slipped it out of the garage and sold it to you, well, if there’s a family member that deserves that car, is entitled to that car with a will or some other document, you might run into a problem with the bonded title. Also, if there’s any liens on the car, forget about a bonded title. They won’t issue a bond for a car with a lien on it. So there’s pros and cons to that one as well.

Prior Owner Contact
One other method we’ll mention briefly is a prior owner contact. What you do is you prepare title transfer documents from the legal title owner to you. And by legal title owner, I mean whose name is in the title records. Now, you might not know that, but it could be researched. There is some title record for every vehicle. You might not have a title, you might not know about the title, but some DMV in some part of the country has a record of that title. It might even be 10 years old with a person’s name—Joe Schmoe is the owner of this vehicle. Now, it may have been sold five or six times and flipped and dipped and financed or whatever, but some DMV thinks that somebody owns that car. And if you can have that person sign certain documents, then you will be the owner of that car. The downside to that is, first of all, you have to research and investigate who that is, and it’s a difficult process for a civilian. As a licensed investigator, there are easier ways for us to do it, but for you to do it, you have to jump through a lot of hoops. You have to fill out a DPPA form and do some affidavits to get the name, and then it’s contacting that person in a way that makes them want to help you. Look, if you just call them up on the phone and say, “Hey, give me a title for that car,” they’re going to think you’re some kind of a scammer. They didn’t own that car for the last five years and, like, who are you calling me? And, like, you’re bothering them. So you don’t want to do it that way. You don’t want to Facebook stalk them, you don’t want to text message them. There’s a certain way to do it in writing with proper forms and documents and return envelopes. You’ll see more information about that on our website. But the advantage is it’s very cheap. If you can look that up and get the person to agree to help, it might only cost you twenty dollars for a replacement title. So that’s another option.

Conclusion
I’m sure as you heard each one of these methods, there’s something about each one that you didn’t like. There’s something that’s inconvenient or annoying or a pain in the neck or “I don’t want to do this.” Probably is. But you got to pick one. The title is not going to magically show up on your desk if you don’t have the old title. So buckle down, read through them, see which one is the best one for you based on what you feel like doing, and go for it. Because the longer you wait without having a title, the more chances some of these loopholes go away. Some of the availability goes away. Some title records get deleted over time, and it could be harder to do this in the future than if you do it sooner. Look, all these things you can do yourself. There are companies out there charging five, six, seven hundred dollars to get you a title. You can do all this yourself with the proper education, proper instruction, proper knowledge, proper discipline. If you want to pay five or six hundred dollars to get a title, go ahead. But you can do it yourself with some research, and that’s what our website is for—to give you that research. So look at all your options. Vermont loophole is one of them, not the only one. See which one appeals to you the most and just start working on it. It may take some time; may take a few weeks, may take a month. But the sooner you start working on it, the sooner you’ll have one of these magic legal title documents in your hand. And that’s what you want. That’s the reason you’re trying to do all this, is to get you a title in your hand so you don’t have to worry about the ownership of the vehicle and having no way to go forward after you fix it up, restore it, get it ready for the road. Put your comments below; let us know what you think.

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Filing For An Instant Car Title

Can you get an instant title for your vehicle? Well, in some states you can. As you know, a title is a legal government document issued only by a government agency. In most cases, that agency is called the Department of Motor Vehicles (DMV) or, in some states, it’s called the Department of Transportation. Applying for a title is a process where you prove your ownership by having the last title from that vehicle signed over to you properly presented to that agency so they change their record to reflect you are the owner and give you a new certificate with your name on it. Because the title isn’t just about the vehicle; it’s also about the person. A title doesn’t just show the vehicle; it shows who’s the owner. It’s not a bearer instrument. It’s not whoever has it in their hand is the owner; it’s whoever’s listed in the records.

Title Processing Time
So, if you have the right paperwork, the old title signed over, and some other documents, you can go to the DMV and they’ll issue a title. Now, in most states, that may take a week or two. According to the DMV in North Carolina, here’s an example: it takes 10 to 15 days for processing. But the Division of Motor Vehicles offers expedited title servicing referred to as “instant title,” in which titles are processed the same day.

Requirements and Fees
Now, a couple of caveats: you have to have the right paperwork. You can’t show up with missing documents. In most states, a bill of sale is not sufficient to get a title. You need the old title. Now, there’s some ways around that; you see on our website some solutions if you have a title that’s lost and you need to get something with just a bill of sale. That’s not what this is talking about. This is talking about a proper title transfer. The other thing is you have to pay a fee: $105. That’s a little higher than a regular title, but there’s a convenience. And you also have to go to a certain location. They have a list of locations here where you can go to get an instant title. Not every DMV location can issue you an instant title.

Security Measures
And here’s why: that certificate, that legal document, is printed on special paper. It’s got watermarks, it’s got scroll work. It looks kind of like money, right? It’s got very severe security features in that document, so those blank titles are considered equivalent to currency. So, they only let locations issue those if you have proper security features at that location, like a vault where you can put them in at night. They don’t want to leave all these blank titles laying on a counter somewhere or put in a file cabinet that somebody can get a crowbar to break into because if you have blank titles that you can just type up and print up, you could own any car you wanted. So, a title is considered like currency and they consider the security like that. So, all these locations you see on the screen have some type of security in their location to hide these blank titles at night before they’re typed up. It may be a vault, it may be a safe, it may be some other type of facility.

Verification and Procedures
So, if you are in a state that issues instant titles—and many states do; this happens to be about North Carolina, but many states do the same thing—you want to check the procedure. First of all, do you have to go to a certain location? Don’t just walk in the door anywhere and say, “Hey, I want my title,” because you may not be able to get it. And if you apply for a title at a location that does not do instant titles and they take your paperwork, now it’s going to be submitted to go in the mail to you in a few weeks. You’re not going to be able to get it instantly somewhere else. So, make sure you’re going to a location that does instant titles. You may have to make an appointment. Not every place does this, and when they do, you can’t just walk in the door and wait in line. You may have to make an appointment in some states.

Cost and Assistance
Be prepared for the fees. The fees for instant titles are usually higher. In this case, it’s 100 bucks. Now, it says maybe additional fees; sometimes you have to pay tax or registration fee, but the title fee itself is 100 bucks—$105.75 in North Carolina. You can do this all yourself. On our website, we have all the forms, all the documents, we even have instructions, so you can do this all yourself for free. We’re a free consumer resource. You don’t have to pay anybody to get you your title. If you want to pay somebody for convenience to do paperwork, you can do that; we have that option. But titles don’t require you to pay anybody except for the government to get your title. If you have questions about how to do this, check out our website. We have a customer service department. HelpCarTitles.com is the email. You can email there. You can call us up if you want to use our website as a free consumer resource. There’s over 1,000 documents you can download for free. There’s over 800 videos that give you instructions. You can use those for free. And if you have questions, you can contact us. The best way to do it is our help desk email: help@cartitles.

Benefits of Instant Titles
But instant titles, a lot of times for a customer, is important. If you’re selling your vehicle, if you need to trade it in, if you need a title for your insurance, maybe the car is impounded and the tow truck company won’t give it to you until you get your title out. Those are all valid reasons to get an instant title. Plus, you don’t have to wait for the mail and be at risk that it gets lost in the mail because if the title gets lost in the mail, it’s very difficult to replace. So, an instant title may be an option for your scenario. Check with your state, check with our website, and see if it applies in your situation.

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Most Common Car Title Problems Liens, Bill of Sale, Salvage

So what is the most common question about getting a car title? A lot of times, people call up, and the questions we get over the course of a day or week, 90% of them, will be a very similar scenario. It goes something like this: “I bought a car. I did not get a title. I have a bill of sale. How can I get a title now?”

Bill of Sale Not Sufficient for Title
What’s not said in that question is how do you know that you need to get a title? Well, the reason that most people know that is because they already went to the DMV with their bill of sale and they found out that that wasn’t good enough to get a title. Otherwise, they wouldn’t be calling us. If you already found that out, you’ll call us up. If you just thought you could go down to DMV with a title, you wouldn’t be calling up random companies on the internet. You would just get you a title. But what you probably found out is a bill of sale is not sufficient to give you a title. Now, there are some methods you could use to go through some loopholes and different processes, but directly to get a title with a bill of sale, that does not work, and you probably already know that. That’s the most common question, and we’ll answer that here in a moment.

Removing a Lien from a Title
The next most common question is how do I get a lien removed from a title? That’s the next most common question, and we’ll talk about that here in a minute, how you do that too.

Salvage or Auction Title Issues
Then the third most common question is what about a salvage title or an auction title from Copart or a junk title? What do I do with that car? So we’re going to cover all three of those here in this video.

Bill of Sale Title Recovery
First, let’s talk about a bill of sale title recovery. If you have a vehicle you’ve purchased and when you bought it, you did not get a title, you only got a bill of sale, you’re not going to have a direct route to getting a title because the DMV, which is the government agency who issues titles—and to back up a little bit, a title is a legal government document. It’s only issued by a government agency. You can’t buy one from a company. You can’t download one from the internet. It’s like a birth certificate, a driver’s license, a passport. It’s a government document, and they only give you one if you have the old one from the last owner properly signed over to you. If you don’t have that, you’re out of luck until you do one of these things.

Options for Getting a Title
Option number one, you can get a surety bond and get a bonded title to process where you get basically a guarantee from a surety company that says, “We trust this person that they’re the owner of the vehicle. Go ahead and give them a title.” And there’s more information about that on our website at car titles.com.

Another option a lot of people do is you can use a process by going through another state. Most of the time, it’s used the state of Vermont, using your bill of sale to get an ownership document from Vermont that’s similar to a title and then bring that to your state to exchange for a title. That’s another thing that people do very, very often. That’s probably the most common thing people do. It may not be the best thing, but for whatever reason, that’s what most people do. And there’s some other options as well. All the different ways you can get a title with a bill of sale, we have them listed on our website that you can see on the screen, car titles dot com. And if you have questions, you can email us at help car titles dot com is the email. We have a help desk.

Dealing with Liens
What about liens? If you have a lien on a vehicle, that’s going to stop you from getting a title. If you try to get a title from the DMV and they find out there’s a lien in the lien record history, blocked, red flag, that title is on hold. So the first thing you need to do is get a document from the lien holder that says, “We don’t care about this car. We don’t want to collect on the lien. The lien’s paid. It’s charged off. It’s a write-off,” or whatever they say. They have to put it in writing. The DMV is not going to take your word for it. Even if you know it’s paid, even if you know they don’t want the car, they’re not going to take your verbal word for it at the DMV, like, “I promise there’s no lien on this car,” because if they did that, then anybody who had a car loan could just go to the DMV and say, “Oh, this car loan’s paid,” and they would take your word for it. That doesn’t work that way. You have to get it in writing.

Now, that may seem like a hard thing to do. It’s really not that hard to do. Maybe you tried to do it, but I’m guessing if you did try, you did it by phone. You tried to call up the lien holder and said, “Give me a lien release,” and you couldn’t get through, or they wouldn’t talk to you, or you ran into a runaround. That’s because you tried to do it by phone. If you do it in writing, you’ll get a lien release nine times out of ten.

How do you do it in writing? It’s a little more complicated than this video can describe, but we have entire videos to tell you exactly how to do it. You fill out a certain form. You prepare a letter of not interest. You print it on paper. Don’t email it to them. Don’t text message it to them. Don’t send it to them by Facebook. Print it on paper. Put it in an envelope with a stamp and mail it to them. There’s four things you want to put in that envelope to make that work. We list all those four things, and we tell you how to do it. You could do it all yourself for free. You don’t have to pay anybody to do this. We have a service, of course, where if you want us to do it for you, we can for money, but you don’t have to pay that. You can do this all yourself, but you have to follow the instructions. Otherwise, it won’t work. We send out two or three hundred lien releases a week, and we’ve been doing it for more than 10 years, and we know what works. If you skip one of those four steps, it won’t work. Less than 10% of the time you’ll get anything. If you do everything correctly, you’ll get it 90% of the time. So use those resources. Watch those other videos about lien releases, and you’ll be in good shape.

Salvage, Rebuilt, and Junk Titles
What about vehicles that come from an auction that’s a salvage or a rebuilt or junk or parts only or one of these kind of insurance claim vehicles? If you’re listening to this and this applies to you, you probably know what Copart means. You probably know what IAA means. Those are auctions where people sell cars that have an insurance claim. And who are these people selling them? They’re insurance companies: Progressive, Geico, Travelers, the insurance companies that insure cars. When they pay out a total loss claim, either for a collision, a theft, a flood, a fire, anything that is a high-paid claim to the vehicle owner, now the insurance company owns the car. They own it. It’s their car. Insurance company doesn’t have a use for a bunch of cars. They’re not collecting cars. They’re not a museum. So they have to get rid of these cars. So what they do is they sell them through these dedicated insurance auctions: Copart, IAA, etc., and people buy them. Now, that title is going to be flagged and stamped, and in the title record, it’s going to say salvage, parts only, certificate of destruction, non-repairable. There’s many different flags that are put on the title record. Different states call them different things. Either way, it’s going to be in the title record. Even if you don’t get a title at the auction, it’s going to be in the record of that vehicle, and that record follows that vehicle no matter where you take it. Every state has that record attached to it. So what do you have to do?

Well, first, if it’s a salvage title, you have a chance. You have a shot. You have to have the vehicle repaired 100% and inspected, and then you can maybe get a title. Now, what do you mean by inspected? Well, every state does it different, but usually what they do is they require that you have receipts for all the parts that you use to fix this car. You have receipts for the labor that you use to fix it, and then they’re going to put it on a machine and check all the alignments, check the frame, make sure everything is good to go for that car being safe on the road. It’s still going to say salvage in the title record, but at least now you can get a new title in your name.

Irreversible Junk or Parts-Only Titles
Other designations for a title like junk or parts only, that cancels the vehicle. Can’t fix it. Can’t sell it. You can never get a title. And you might think, well, why is that the case? My car’s not damaged that much, or it really didn’t need anything. It doesn’t matter what the damage is. If the insurance company puts junk, parts only, destruction, non-repairable, if they put that on the title record, there’s many reasons why they do. We won’t get into that now, but it’s permanent and it’s for a reason. It’s because the insurance company does not want that car back on the road for liability purposes. It doesn’t matter if their reasoning is right or wrong. It doesn’t matter if you think that the car should go on the road. You can’t. Don’t let anybody tell you that you can because you can read the state law and the federal law that says once that’s done, it’s irreversible, irrevocable, and the car is canceled. That VIN number is canceled.

Conclusion and Call for Feedback
And you’re thinking in your head, well, gee, what do I do now? You sell it for parts. That’s what you do. So put your comments below. Let us know what you think. Let us know what questions you have about car titles. What problems have you run into? Do you have difficulty with the DMV? Have you had success with one of these processes: a bonded title, a Vermont registration title? Have you used these before? Did it work out for you? How much did it cost? Let us know what you think. We’ll see you on the next video.

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How can you verify the history of a vehicle record owner?

So how can you get vehicle information like ownership or background on a motor vehicle from the official records? As you know, motor vehicle information is normally kept by the Department of Motor Vehicles or some other titling division in your state, and you might want to do an owner’s check or background check on a vehicle.

The Driver’s Privacy Protection Act (DPPA)
How does that work? Well, be aware that in every state, the release of vehicle owner information is protected under a law called the Driver’s Privacy Protection Act or DPPA. It’s in U.S. Code 2721. It prohibits the disclosure of personal information which originates from a state Motor Vehicle Record. What that means is that your registration, your title, things that are in your driver’s license, things that pertain to your Motor Vehicle Record, disclosure of those is considered highly restricted personal information and must be justified by a permissible use.

Permissible Uses and Justifications
This permissible use table, these reasons you can get this, are the same for every state because it’s a federal law. So if you meet one of these permissible use categories, you can get the private information about a vehicle. If you fail to provide a justification, then you won’t get the records. Here’s an example of a form from one jurisdiction, but no matter where you are, there’s going to be a form that will have this same format.

Request Form Details
You have to put your name and address that’s requesting the form. You can’t do this anonymously. In fact, they’re going to keep the records for your request for between five and ten years, so if there’s any reason to find out who did the background on this vehicle, they can go back and find out that it was you. Then you can put the requested information, what types of records: driver’s license, registration, ownership, liens, dates. You want to know just current or history.

Standardized Permissible Uses
But the most important thing is the what’s called permissible uses. Permissible use is standardized in all 50 states because it comes from federal law, and you circle or check off the permissible uses. One is if you have written consent, meaning that are you getting your own records? Well, obviously you can give yourself consent, or if you’re a parent or legal guardian, you can request a copy of their record. Or if you request the record of another person, you have to have written and notarized consent. It can’t just be you forge their signature.

Examples of Permissible Uses
So what are the other reasons that you can get a vehicle background check done? One of these may apply to you, but let’s take a look and see what they are. If you’re a manufacturer and you need to notify people because of a recall or monitoring of vehicles, you can apply for release of information about a vehicle based on your status as a Vehicle Manufacturer. If you’re a government agency for the purpose of the agency to carry out its functions, an agency just can’t get it randomly; they have to have a reason that’s a legitimate reason for carrying out its functions. A court for the purpose of the court to carry out its function, so if there’s a court case or a lawsuit, the court can access your driving information.

Protection of Personal Information
By driving information, that means your name and address. Where this comes from is if you’re driving your vehicle and your license plate is on the back, if this wasn’t protected, anybody could look up where you live just by typing in your driver’s license or your license plate and finding your address. So if they didn’t like the way you were driving or you cut them off, if this law was not in place, somebody could write down your plate, run the plate, and come knocking on your door, punch you in the face if they think you cut them off.

Law Enforcement and Business Use
Reason number five is obviously a law enforcement agency can access this only for the purpose to carry out its functions. They can’t just do it randomly, just out of curiosity. Now an authorized agent or employee of a business can check the driving record but only to verify the accuracy of information. So if you apply to an insurance company and they want to verify what you’re saying is true, then they can do it or to confirm that the information is outdated, prevent fraud, pursue legal remedies, or collect a debt.

Civil Proceedings and Research Activities
So let’s say if you have a car loan and you stop paying your loan, the loan company can look up to make sure your address is still current. Now here’s where it gets interesting. If it’s authorized for use in a civil proceeding, meaning if you have a lawsuit and you need to find out who owns the vehicle or what vehicle somebody owns, you can petition the court or agency, including service of process, which means a subpoena, to get this information to execute and enforce judgment orders. So if you get a court order or if you’re involved with a lawsuit, you can use this DPPA process to get it.

Insurance and Towing Companies
If it’s authorized for research activities as long as the personal information is not published, meaning that if you’re doing research about how many blue Chevy Camaros are there in a certain area, you can do that as long as you don’t use the personal information. If you have permission in your insurance company and you want to verify something for investigating a claim, rating or underwriting, or anti-fraud, and you are an insurer, then you can do that, but as long as you only use it in connection with those purposes. You can’t, even if you’re an insurance company, get this information and use it to send out marketing or advertising. You have to use it for claims verification.

Private Investigators and Employers
If you’re a towing company or an impound company, you can use it to notify the owner. So even if you’re a towing company and you access it, if you use it for the wrong reason, that’s a problem. So if you’re a towing company and you check off box number 10 to authorize for use to notify the owners, but really you’re sending out a bunch of flyers to sell people cars, that’s not going to be any good. A licensed private investigator can verify driving records, and if it’s for a purpose, so just because you are a licensed private investigator, you can access the records but only for the purpose permitted under the DPPA. You can’t use it for marketing, advertising, sending out flyers; you have to use it for a legitimate purpose.

Toll Companies and Improper Access
If you’re an employer and you are issuing somebody a CDL or letting somebody use your license for cargo and they’re driving a commercial truck, commercial driver’s license, you have access to that. If you are a private toll company, meaning that somebody blows through a toll booth and you need to send them a bill from their license plate, you can do it. If you access information improperly, it’s enforced by the US Department of Justice. This is not like your local PD writes you a ticket; they may seek civil and criminal penalties for improperly obtaining, disclosing, or using the information. Private citizens may also seek civil damages.

Conclusion
So if you check off a box saying, “Yeah, I’m using it for this,” and really you’re doing something else, that’s going to be a problem. However, as a consumer, you can use this DPPA process to get driver records or ownership records or contact information for an owner for legitimate purposes. When we run a vehicle title search or title history for clients, we’ll give you what’s available in the public realm, things that don’t need this DPPA request, and will also send you the form for you to submit to get more detailed information like name and address if you’re permitted to do that. If you’re authorized, you will get that directly from the governing authority. So the Driver’s Privacy Protection Act protects people from having their vehicle information used for improper purposes, but it is available under the right circumstances if you submit the proper form, and every state has a different form.