Vermont Loophole Cancelled. Now What?

The End of the Vermont Title Loophole
So the famous Vermont title loophole is over. If you’re watching this channel for the last few years, you’ve heard us talk about how this thing was going to come to an end and how many states were giving people a hard time about it. Going back 3 or 4 years shouldn’t be news to many of you. We’re going to talk about what do you do now, what is the new loophole besides Vermont after Vermont.

Vermont Registrations Explained
But before we do that, let’s talk about what’s happening with the prior Vermont registrations. Here’s how it worked, and some of you know this already. Maybe you just found out about the Vermont loophole now, maybe you’ve known about it for years and you’re trying to find out what to do otherwise. Maybe you sent in paperwork to Vermont and they sent it back. The Vermont loophole, so to speak, was a method that people would use to get a title for their vehicle when they did not have the proper documents for their own State.

Publicizing the Loophole
You can see here this was, you know, talked about on Hagerty Insurance, one of the world, one of the country’s biggest legitimate insurance companies. They talked about the Vermont loophole. In fact, they were one of the places that publicized it many years ago, and they talked about on the channel about how they use our service to do this or reference our website.

The Process
So here’s the thing: what you would do is you would apply by mail to the state of Vermont to get a registration. You’re not getting a title; you got a registration. Once you got that registration from Vermont, then you bring it to your state to exchange for a title. It gave you something, a piece of paper with your name on it, that you could bring to your state to get a title.

Issues with the Loophole
The problem with it is that’s not what your state wanted you to do. They wanted you to jump through the hoops in your state to get a title, maybe a bonded title, maybe go back to the owner to get a duplicate. Right. But people took this loophole because they thought it was the easy way out, and in some cases, there were some parts of it that were easier, but in reality, a lot of times, it was harder than just doing it the right way. You had to pay tax to Vermont, which was a huge tax bill. You had to first get the Vermont license plate and then switch it over to your state. There were also some insurance issues that came up.

State Rejections
So, starting in 2017 or 18, some states started to reject Vermont registrations if you brought them in. For a while, the state of Indiana wouldn’t let you exchange a Vermont registration for a title. Then for a while, Ohio gave you a hard time. There was a period of time in Florida where they put signs in the window of the DMV in Florida: “Don’t bring us a Vermont registration, we consider it to be fraud.” So these are the pushbacks that people got from it.

New Loophole: Court Order Title
So we recommended many years ago to look at other options. There’s a new loophole, really not new, it’s always been in existence. Some people don’t want to do it because they think it sounds hard; they think that it’s going to be more trouble than it’s worth, and that’s by going over the head of your DMV. Look, if you walk into the DMV in your state and you don’t have one of these (a legal title to a vehicle from the last owner properly signed on the back to you, no cross out, no white out, no tears) and you actually have it, if you don’t have a title, you can’t get a new title with your name on it. The DMV is not going to give you one just based on your say-so, not even with a bill of sale. Bill of sale means nothing; that’s just a receipt that somebody gave you for payment of the vehicle. It doesn’t mean that they owned it, doesn’t have any proof that they were the owner, so they don’t take bill of sale to give you a title.

Going Over the DMV’s Head
So what do you do even if they wanted to? The DMV can’t do it. You go over their head. Who is their boss? Their boss is the court. So what you do is you do a court order title. This is an example of one from Pennsylvania. This is the procedure you follow when you wish to obtain a certificate of title to a motor vehicle if you don’t have the old title. You have to prepare these forms: look, there’s Section Two, Section Three, Section Four, Section Five, Section Six, Section S. Court order. Court grants your petition. It will grant an order. Once the order is filed, you need to get a copy and then bring it to PennDOT; that’s Pennsylvania’s version. In this state, this is Oklahoma: court order to issue a title.

The Court Process
We didn’t invent this. This is actually a court process. Now, most counties in the country don’t have a specific court order title pre-made document like this one. Most counties, you have to type this up. I see all these words on the page. You have to type it from scratch and file it. Some counties have it; you put in the VIN number, you put in your name, you put in the information. Look, in support of this application, the applicant would state under oath he is the owner of this vehicle and came into possession under the following circumstances. Three lines: how’d you get the car? Bought it on Craigslist for 500, whatever. Verification: I read this application; statements are true and correct. You have to get it notarized. Court order for issuance of title.

Examples from Different States
So this is one example. We looked at the other one from Pennsylvania. Some states have examples of these. Ohio has a few counties that have examples. If your state has one or your county has one, you can use it as a template. If not, you can type this up, file it with the court. First, see you’re going over the head of the DMV. The court will do a little bit of research. They’re going to make sure your vehicle’s not stolen, make sure it has no liens, make sure it’s not a salvage or parts only or junk title. They’re going to make sure there’s no claims against it from a probate. Once that’s all checked out, they may ask you for a few more things, maybe a picture of the VIN number to prove you’re in possession of the vehicle. They may ask you to show up in the clerk’s office, raise your right hand, and swear under oath everything you said is true. Normally, they don’t require you to do a big Law and Order Jack McCoy court case. They don’t want to do all that; they want to keep it simple, and they issue this order.

Court Order vs. DMV Rejection
Here’s the application for an order. Here is the actual order: court order for issuance of title. Once you get that signed by the judge, so ordered, district court judge signs it right here, you take that to DMV and slap it on the counter, and they have to give you a title no matter what paperwork you don’t have because this trumps not having this. So this is the new loophole. It is maybe a little bit more bureaucratic; you might have to fill out a couple more forms, but here, look, this one here has three forms. Usually, you have three or four forms, and we’ll talk about what they are here in a minute.

Comparing Processes
The Vermont process, you have to fill out the Vermont application VD-19. You have to get that back; you have to sign over that registration, that’s step two, and then apply for a title in your state. Three forms, and you have to wait for Vermont to issue a registration, which may take 3 or 4 weeks. Then you have to bring it to your state to switch for a title, which may take 2 or 3 weeks. In the meantime, you’re paying fees to both states, waiting for both states. This one here, you’re just jumping to the front of the line, right? You’re going over their head at the DMV and having the judge say, “No, this person is squared away, and we’re giving him a title.” More importantly, you don’t have to worry about the DMV not accepting what you bring them. If you bring your DMV a Vermont registration in the past, they could reject it if they wanted to. If they thought you were trying to do something sketchy, they could throw you out. They can’t reject a court order. Court order is, you know, rock-paper-scissors. Court order beats DMV.

The New Loophole: Advantages
So use this technique and this process to your advantage. It’s the new loophole. Is it a little more work? Maybe a little bit. Is it a lot more powerful? A lot more powerful because there’s no rejection by the DMV. Can the court reject it? The court can reject it, but normally they’re only going to do that if there’s something wrong with your vehicle or your story. If you stole the car, if somebody else stole the car, if there’s liens on it that you haven’t cleared yet (and there’s ways to clear liens, we talk about that in other videos), or if the vehicle is not eligible for a title (is it a junk parts-only vehicle). As long as you have a legitimate vehicle, this is the way to go, and you don’t have to pay anybody to do this. You can fill out all these forms yourself. Our website has examples of how to do that. We also have a title service; if you want assistance with it, of course, we can help you, but you don’t have to pay anybody to do this. You don’t have to hire an attorney; you don’t have to hire a lawyer. You can do these yourself. They give you the checklist of what to do.

Using Templates and Getting Help
Even in the states where they don’t give you that, you can use templates that we provide on our website to be able to figure it out. Or if you want help, we can do that too. Don’t fear the Vermont loophole being over. It’s not the end of the world. You can still get a title. These ways are better.

Potential Revocations of Vermont Registrations
Here’s the other kicker: there’s word out there from some insiders at DMVs that some states are going to go back over the last 12 months and find people who submitted a Vermont registration in order to get a title in their state and revoke those titles. We’re already hearing this is going to happen. So be glad that you didn’t do the Vermont process because there’s some people that are going to have a rude awakening when they get their letter in the mail from their state DMV, let’s say Nevada DMV, saying, “Hey, remember that Vermont registration you brought us? We’re revoking your title. We’re undoing it.” So now you have to go through another process.

Conclusion
So be glad you didn’t do it, especially in the last few years. People still wanted to do it even when they’re offered the options. You know, people have the freedom of choice; they can do whatever they want, but now you can not have to worry about that option, which may not be the best overall. You can just jump right to the best way to do it: court order. How would you like to have the court on your side for a change? How would you like to have the judge be your partner for a change instead of being against you? The court is on your side against the DMV with a court order title. If you want more information, you can check out our website cartitles.com. There’s an email helpdesk at cartitles for our help desk. There’s also an option where you can arrange for a private consultation with a certified title agent to go over your specific case to see how it will work out for you.

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How Salvage Titles Are Determined

Determining Vehicle Titles
So how is it determined whether or not a vehicle is a salvage title or a clean title? Well, the states have various calculations for how that’s done. Many times it’s if the damage is more than a certain percentage, 75% or 80%. Sometimes there’s other criteria.

Example from Connecticut
But here’s a good example. This happens to be from the state of Connecticut that describes the Connecticut total loss threshold and how that’s calculated. It’s important to understand how this is done because even if you purchase a vehicle that has a clean title, if the vehicle has damage, it could turn into a salvage title later for you. So you have to understand how this is done, what the calculation is, and there’s a lot of misconceptions about what makes a vehicle a salvage title.

Connecticut Statute 38a-353
Well, in Connecticut, the way that it’s done is this is their 38a-353 statute calculation of settlement amount in motor vehicle. Whenever a damaged motor vehicle has been declared a constructive total loss, the insurance help pay this. What is a constructive loss? What is the definition? Well, here it says right here, a constructive total loss means the cost of repair or the cost of both and salvage equals or exceeds the total value of the property at the time of loss.

Example Calculation
Now this may sound a little confusing, but here’s how it works. Let’s say if you have a vehicle that is worth $7,000, and I’ll just use some numbers, but you can plug your own numbers in. Let’s make it higher because it’s tough to find a $7,000 vehicle anymore. Let’s say a $10,000 vehicle, and it’s involved in some kind of an accident—minor sheet metal damage, couple airbags go off, maybe some glass broken—and the repairs are going to cost, let’s say, $6,000. And you might say, well, that’s a lot of money. Look, this day and age, almost any fender bender is going to cost $5,000 or $6,000. By the time you change out the bumpers, you do any frame straightening because everything’s unibody, you do paint, a lot of labor and paint, and especially when airbags go off. Airbags can be $800 or $900 per airbag to replace or to repack. So you have a minor fender bender, a couple of bags pop, you’re talking five or six grand. You might say, well, that’s only, you know, 60% of the value.

Salvage Value Calculation
However, what they do is from the $10,000, they subtract the salvage value. What is it worth right now? So if you look at that vehicle, that $10,000 vehicle that’s crashed, what is it worth in its current condition? Well, it may be worth more than you think because at auction there is probably going to be a salvage parts dismantler that is willing to pay $5,000 or $6,000 for that vehicle. And the reason why is because it still has a good engine, transmission, probably some body panels, computers, the other airbags. There are many parts that can be dismantled, but by the time they take those parts off, they could probably sell $1,000 worth of parts. But they have costs for dismantling, labor cost, shipping cost, retail cost, that kind of thing. So they’re going to pay probably $4,000 or $5,000 for it. So if they pay $5,000 and the repairs are another $5,000 or $6,000, that’s a total loss. It’s what’s called a constructive total loss. The car isn’t completely destroyed, but constructively, financially, it’s a loss.

DMV and Salvage Titles
And we’ve seen this happen with cars that even didn’t go through insurance. If you have a car that was damaged in an accident and you fix it, if there’s anything about that vehicle that brings it to the attention of the DMV, they’re going to flag it as a salvage. And if the insurance company didn’t make it a salvage, the DMV might.

Selling a Damaged Vehicle
How would that happen? Well, if you look to sell it in its current condition, and as part of that sale, most states have a requirement that the vehicle be inspected. Even if it’s just a VIN inspection or a safety inspection or emissions inspection, maybe you sell it to another state. Many states have a rule that says if you bring a car in from another state, we have to inspect it. Maybe it’s when you get insurance, they want to inspect it to make sure that it’s in good condition. Maybe you bring it in for service, and the service department says, we’re not sure if this car is safe for the road because we see there was some frame damage and they trigger an inspection. If that’s done, here’s what happens.

Connecticut Salvage Inspection
Here, we’re going to stick with Connecticut. Under that Connecticut total loss threshold salvage inspection information and this the same statute 38a-353, same one, State of Connecticut Department of Motor Vehicles. Salvage inspection locations: there’s two, Hamden and Wethersfield. Those are the two main offices. Wethersfield is their main branch. The capital of Connecticut is Hartford, but Wethersfield is close by, and that’s where they do a lot of them. They have one downstate in Hamden for people who don’t live near Hartford. They charge an inspection fee of $88. Okay, so far so good, not the end of the world. The owner must purchase and complete an inspection report, and there’s a form for that, B269, and validate it before presenting the vehicle for inspection. Be sure to allow enough time and have the inspection scheduled.

Inspection Requirements
You know, here this is a separate issue, but you notice they say right on it, MV907A is not acceptable by the Connecticut DMV. Any of you out there that have an MV907A from New York and are trying to bring it to another state, forget it. The other states don’t accept it because they require you to bring it back to New York to get it inspected there. A private individual cannot drive or tow the salvage vehicle to the DMV office, can only bring it in on a flatbed trailer or car carrier. No wheel of the vehicle may touch the ground, means you can’t use a tow dolly with two on the dolly, two rolling, can’t do that. Can be driven by a bona fide repairer with repair plates only when the dealer is the owner of the vehicle. However, if it fails, they got to tow it away. So if you’re a dealer and you put on dealer plates and you drive it there, cross your fingers because if it fails, you got to call a trailer. The owner of a vehicle that has been declared salvage cannot transfer ownership on an application for title. You must first obtain a duplicate title which says salvage and then sign it over to the purchaser. If it’s branded parts only or unrebuilt or re-registered under any circumstances, this is something you know we’ve talked about for years. Non-repairable, non-rebuildable, parts only, those cars are done.

Required Documents for Salvage Inspection
What do required documents for salvage inspection? You have to have that K1 186, it’s a salvage vehicle repair report showing what the major component parts are replaced according to industry standards. You have to present that so they have to see that the parts you put on are legitimate parts put on properly. Invoices, receipts apply, meaning that you have to have proof that these parts you put on are not stolen. You have to have photographs, clear photographs of the repaired area, and they must show the entire vehicle by at least four photos on each corner. The damaged areas prior to repairs. So if you already fixed it and you didn’t show what it was like before, you might be out of luck. The repaired areas with new parts prior to seam sealing, painting, or rustproofing. They want to see how it’s attached, how they come together before you cover it up with a bunch of junk. They want to see what happens, how the new parts were attached. If they’re welded, the area prior to painting and corrosion proofing, if it’s no longer visible, photographs must be attached. This is a hard thing to do.

Airbag Certification
You have to have an airbag certification statement if the vehicle is equipped with an airbag. A separate statement will be required in all cases completed by a dealer with proof of certification for all vehicles, regardless if the airbag was deployed or not. So if you have a vehicle that had major damage and the airbags didn’t pop, that’s good, you don’t have to spend the money for the airbags. You still have to get a dealer, a franchise dealer. Look, franchise dealer, what does franchise dealer mean? It means the manufacturer who built that car, a dealership from that manufacturer has to look at it. Not Joe’s Garage, not Bob’s Honda Repair, it’s Executive Chevrolet, like the new car dealer. How much is that going to cost you to bring it in and have them inspect it?

Insurance and Receipts
Insurance adjuster’s report if it was an insurance claim. Receipts for major component parts. Receipts are required for any major component parts that are replaced: engine, transmission, fender, hood, door, tailgate, trunk. You see what we’re talking about here, right? The receipts for these parts must clearly indicate the name of the source and the VIN if it was a used part.

Constructive Salvage
Again, this can kick in even if the insurance company did not report it as a salvage. If the calculation makes it a constructive salvage based on the total loss threshold. Remember, constructive salvage, what does that mean? Constructive total loss means the cost of repair exceeds the total value of the property. So about the only way you can get away with this is if you buy a crash car, nobody knows about it, you fix it up before anybody looks at it, and you can get it through the inspection without people realizing, wait a minute, this car was a major repair. Because if you bring it for even a casual VIN inspection or emissions inspection and somebody sees that there were major repairs done to it, it can get flagged. And even some dealerships will flag it because they don’t want to have the liability of that car being on the road if they put their hands on it, they touched it, they want to get it off the warranty too.

Lender Inspections
Sometimes lenders will want to have a vehicle inspected to make sure they’re lending money on a vehicle. So anytime you’re buying a car from Copart or IAA or one of these auctions, make sure that you know even if it’s supposedly a clean title and there’s no salvage brand on it or rebuilt brand, that any damage could trigger a salvage inspection even if you think you’re getting away with a clean title.

Triggering a Salvage Title
So these things can be triggered by the total loss threshold that might not be as much as you think. You might say, well, it’s under 75% damage. Well, you have to add back in the salvage value, what the vehicle is worth now. And if it crosses 75% with that, you’re done. That’s a salvage. And sometimes the vehicles that seem like they have a clean title, it’s just because the insurance claim hasn’t been through the system yet. Once that insurance claim gets into the system, then all bets are off. The towing company can report it, Copart can report it, lots of people can report it even after the fact. And you might find out later that you have to jump through a bunch of hoops to get your salvage vehicle approved.

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Didn’t Get A Title From A Car Dealer?

Curb Stoning: A Persistent Problem
So here’s another example of curb stoning or backyard car selling that proves it’s still going on. This is something that’s been going on for 40 plus years. For a while in the ’90s, it kind of fell out of favor, but now with less um prosecution or regulation, there’s more and more people doing it.

A Case in Cambria County
In Cambria County, this is in Pennsylvania, there was a person who was basically buying and selling cars out of their backyard. And it’s illegal if you’re somebody who buys and sells cars for a living. You have to have a dealer’s license. You have to have a licensed automotive dealer. Very difficult to get a license. You have to have insurance, a commercial location, all kinds of things. And most people don’t want to go through that. They just want to kind of flip cars, buy them on Craigslist, sell them on Facebook, maybe buy them at auctions.

Risks for Consumers
The problem for consumers, for buyers, is that it puts you in a bad spot for a number of reasons. First of all, the vehicles are not properly represented. If you’re a licensed dealer, you have to provide certain representations that the vehicle is safe for the road, it’s been inspected, even if you sell it as is. There’s a lot of requirements that you have. Backyard dealers don’t do any of that because they don’t have a license at risk. They don’t have anything to risk.

Unlicensed Dealers and False Advertising
In fact, according to the lawsuit, this person had been selling used vehicles, many of them in need of major repairs, through Facebook Marketplace. He even used the name Dave’s Auto Sales on his ads, but he was not licensed to sell the vehicles. So that’s a problem. What else could go wrong? He advertised the vehicles as roadworthy, but the vehicles needed repairs and did not have valid titles. There’s another big huge red flag.

The Title Issue
You might buy a car from one of these backyard curbstoners and not get a title. I can’t tell you how many times our sales staff, you know, we get hundreds and hundreds of calls every day. People say I bought a car from this guy on Facebook or Craigslist, and I didn’t get a good title, or the title I got was no good. So that’s another problem because if it’s a licensed dealer, even though problems happen with licensed dealers, they normally have to fix it because their license is at stake.

Consumer Confidence
According to the article, the person made himself a trustworthy car dealer and broke consumer’s confidence in buying a reliable vehicle. He refused to provide customers with a written agreement, refused to submit paperwork to PennDOT and complete the title. In some cases, he legally repossessed the vehicles and did not have a license to do installment contracts.

Verifying Dealer Legitimacy
So again, this is not a new thing. We’ve seen it before. It’s very important that if you are purchasing a vehicle, you either determine that it’s a licensed legitimate dealer or if it is a private seller, that’s fine. If it is a private seller, make sure when you look at the title, and here’s a title certificate, you’ve seen them before, that you look at the name on that title. Who’s the legal owner? And make sure that the person you’re buying it from is that owner. Check their ID. Don’t just have them sign on the back because if the vehicle’s already signed over on the back, you won’t be able to get a title.

Flip Titles and Their Consequences
That’s called a flip title or jump title. It’s the same as not having a title. Once a vehicle is signed over to somebody, the buyer listed, they have to get a new title first with their name printed on the front before it can go to another person. So if you’re buying a vehicle, protect yourself. Ninety percent of the title problems that we hear about from consumers are things that could have been prevented at the time of sale: flip title, jump title, maybe a title that has white out or damage on it, maybe not even getting a title.

The Importance of a Valid Title
Anytime you purchase a vehicle, don’t get a title, you might think, well, a bill of sale is good enough. Many times you can get a title with a bill of sale, but it doesn’t always work. There are some vehicles that are not eligible for a title. Sometimes the last owner didn’t pay their taxes, and they have back taxes. That vehicle’s frozen. Sometimes there’s liens on vehicles. So there are things that come up that can prevent you from getting a title, no matter how good of a bill of sale you have.

Potential Risks
Sometimes the person selling it doesn’t even belong to them. Look, in theory, think about this. If I went to, you know, Hertz Gold Enterprise—I’m sorry, Hertz Gold Rental Car—and I rented a car tomorrow, and I’m driving it, and I put it on Craigslist for sale, and I say, hey, I lost the title, I’ll give you a bill of sale. That car is not reported stolen, doesn’t have any liens on it. So if you did a title check on it, it would look clear. And I take your money, I give you the keys, I give you a bill of sale, you think you’re good to go. That car didn’t belong to me. That’s a Hertz rental car.

More Potential Issues
So that may not be the case with a lot of these title problems, but it just goes to show that unless you have the valid title certificate, which you know what it looks like, you’ve seen it, a bill of sale isn’t good enough. It’ll help with some of the methods of getting a title, but by itself, it doesn’t mean you automatically get one. And the work you might have to do to get a title could be pretty substantial. Sure, we can help, but there’s many things that come up that could be issues.

Seeking Assistance
So make sure you’re protecting yourself. If you do decide to purchase a vehicle without a title, be aware that your money’s at risk until you actually get that title in your hand. And there’s ways to do it. A lot of times it works. You know, 70, 80, 90% of the time it works, but sometimes there’s a gotcha on a vehicle: a lien, a salvage, parts only, maybe some claim against the vehicle, maybe probate. A lot of things can come up.

Vehicle Inspection Issues
Sometimes it’s even not about the title. It’s about the vehicle. Some states require that when a title is transferred, the car gets inspected. What if the car doesn’t pass inspection? What if it doesn’t pass emissions? Some states, like California, if the vehicle doesn’t pass emissions, no title. They call it smog in California. So do your homework.

Solutions and Support
If you are stuck in a situation where you’ve already purchased a vehicle with no title, that’s okay. Look at the solutions on our website at cartitles.com. There are some good people there that you can call up that will help you walk through your process. We can give you free consumer advice from our website. We can do consultations, we can prepare documents, we can give you blank documents, whatever we can do to help.

Conclusion
We love helping people get titles because we know how hard it is to get a title for your vehicle. We deal with DMV all the time. We know how hard it is, so we want to help in any way we can. But there’s no magic bullet to just demand a title and get one. If you have a vehicle without a title, expect there’s going to be a little bit of effort, but in the long run, don’t despair. You’ll probably be able to get one unless it’s something like a stolen car or parts only car. In that case, you’re probably going to have more trouble than you think you might. Let us know how we can be of assistance. We’d love to help people get titles. Talk to you then. Bye for now.

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Get A Charge Off Title Lien Released

So if you have a vehicle that has a lien recorded against the title with the DMV, you cannot do a title transfer until you get that lien released from the title record. So how do you do that? What if it’s a charge-off? What if it’s a write-off? That’s going to be one of the most common scenarios for a vehicle lien to be recorded in an official title record. If that lien or underlying payment has not been paid for a long period of time, the lender has probably placed it into non-performance or delinquency status, and it becomes a charge-off or write-off.

Lender’s Perspective on Charge-Offs
What that means is the lender does not consider it to be an asset on their balance sheet any longer. It means that the loan can no longer be counted on as a securitized instrument for the lien holder. So what happens is they do a charge-off; they do a write-off, but they don’t go out of their way to remove the lien from the title record. And the reason why they don’t is because it costs them money to actually do a lien release. So why bother doing it if it’s not going to benefit them?

Requesting a Lien Release
So how do you get that lien removed? What you want to do is you want to request it from the lien holder. However, it’s very important how you go about doing this, and we’ll talk about the method and also talk about a backup if, for some reason, you request it and they don’t do it, or they drag their feet, or they give you a runaround. What can you do to get a lien release without relying on the lien holder, without relying on the lender?

Step-by-Step Process
Step one is to contact the lender in a very specific way. You want to do it in writing; you don’t want to do it by phone, email, text message, Facebook, or any electronic means because lien holders do not have a specific lien release department. There’s not people sitting around waiting to sign a lien release. Everybody at the bank, financial institution, dealership, wherever the lien is held, has some other job they’re doing every day, and for them to drop everything and do a lien release is not going to be beneficial to them.

Mailing the Lien Release Document
So what do they do? You call them up, and you say, “I need a lien release,” and they tell you that they’re not going to do it, or they can’t do it, or they can’t talk to you because you’re not the borrower, or they tell you they will do it, but then they never follow through. So what you do is you take the actual lien release document. You can see one here on the screen. This is a lien release; this happens to be from the state of Nevada. Every state has a specific official government lien release form. Nevada is one of the simpler ones. You get this form, and you fill it in 100%. The Vehicle Identification Number, year, make, model—you see all the spaces on the screen—registered owner, printed name of lien holder, address, phone number of the lien holder, and you print it and mail it to the lien holder.

Importance of Physical Mailing
Don’t try to fax it, email it, any other way. If you do that, it won’t work. Whether it’s a charge-off, write-off, or even if it’s paid off, you don’t want to do it electronically. Here’s why: that lien holder is going to get that email, and now they have to print it, they have to find an envelope, they have to do everything that is work in their daily routine. If you already have it printed with a little arrow sticker where to sign and put a return envelope in that mailing so all they have to do is sign it and send it back to you, you don’t want them dragging down to the mailroom to find a stamp, to get an envelope—you don’t want to give any excuse to throw it in the trash.

Including a Letter of Non-Interest
In addition to this lien release document, also include what’s called a letter of non-interest. Sometimes, if that lien holder employee that pulls it up—because that’s who’s going to get it, just an administrative employee—they look it up and they say, “It’s a charge-off.” Well, they might not know that that means lien release, but what they do know is if you have a letter of non-interest that means, “I have no longer any interest in this vehicle,” signed lien holder. They can sign that because a charge-off means they don’t have an interest in the vehicle. So include a backup with your mailing that says “letter of non-interest.” Have that form also prepared, printed, filled in. Don’t leave anything for work for them to do when you send it. Again, put a return envelope with your name already printed on the front, a stamp on it, so all they have to do is sign it, put it in, and mail it to you.

Multiple Submission Locations
The only time that lien holders we see do not send you a lien release is if it’s an active loan on a later model vehicle with a lot of money owed. If you have, you know, right now it’s October of 2023, if you have a 2022 vehicle that’s owed $50,000 on it, you’re probably not going to get a lien release. As long as the vehicle is older, even if it has a lot of money on it, if the lien is delinquent, charge-off, write-off, many times the lien holder just signs it. In addition, the way we do it is we send it to multiple locations for that lien holder because all you need is one of them. If you just send it to one place, that person might throw it in the trash. If you send it to four or five places—we send it to up to five—all it takes is one of them, some secretary, clerk, administrative person signs it, mails it back to you. It increases the probability you’re going to get that lien release.

Consequences of Not Obtaining Lien Release
Because if you don’t get that lien release, you’re in big trouble because you have to either forget about the car or you have to go to plan B. What is Plan B? Well, here’s Plan B. Plan B is you have to do a court order title, and here’s an example. This happens to be from a county in Ohio. It’s a court order certificate of title. You have to fill out an affidavit, a journal entry, a docket request, an affidavit of facts, a petition, also be typed up and submitted to the court.

Court Order Process
Now, if there’s a lien on it, they’re going to ask you, “Did you try to contact the lien holder?” So you can show you already did this. You don’t want to start with the court order title if there’s a lien on it. If you know there’s a lien, at least go out of your way to try to have documentation, not that you called or emailed, but you actually mailed something to the lien holder. If you can have proof of that, now the court is going to be on your side because they say, “Well, the bank doesn’t want anything to do with it. They didn’t, you know, send any reply back.” So the court will then step in. Use this as a backup method. It’s very powerful because if you don’t get the lien release from the lien holder, the court can override that with the DMV. Use these as methods you can use to get that lien off the title record.

DMV Regulations
The DMV can’t do it without having one of these two forms: either the lien release from the bank or the court order from the court. Without one of those two things, the hands are tied of the DMV. They’re not allowed to remove a lien just based on some receipt you show you paid for it or your verbal statement. They can’t do that. They have to go by what the law says. It seems like they’re giving you the runaround, but in reality, they are following their own rules.

Timing and Court Order Submission
So try to get the lien release. Maybe wait, you know, 7 to 10 days. If you don’t get it back, then start your court order process. And the court order process is not that bad. It’s some documents you have to fill out. The one thing about court is they’re very picky about the documents, making sure everything’s i’s are dotted, t’s are crossed, everything’s done the right way. If anything is off, they’ll just reject it. So you want to make sure it’s done right. And we also recommend don’t bring it to the court directly, mail it to the court. If you bring it directly, the clerk might look at this and say, “Well, you know, we don’t know what to do with this.” Sometimes clerks don’t know exactly what’s going on behind the scenes, and if you bring it in, they could turn you away. If you mail it, there’s nobody there for them to argue with, right? They just file it with the court and let the judge or the magistrate deal with it.

Court as an Ally
If you’re there, they can kind of try to deflect things. You know, most courts are overloaded, so they are told unofficially to not do as many cases as possible. Nothing wrong with the courts, not doing anything wrong, they’re just trying to keep junk cases from showing up. But court-ordered title cases are actually good for the court because they’re administrative. It’s not like a big Law and Order Jack McCoy kind of thing where you have to go in and do a big case. It’s all administrative. It’s all done with paperwork. So those cases the courts are comfortable with, but the clerk may not know that. So don’t leave it to chance by walking in the door and saying, “Here’s what I got.” Remember, the court can also not help you with any of the paperwork.

Legal Advice Limitation
How do we know that? Well, they tell you. Look right here. They say the court’s office is not permitted to give legal advice, distribute forms, or assist in the completion of any form submitted to the court. So they tell you right there, and that’s pretty much across the board. Every state has that. They can’t assist in the completions of the documents. You have to have them all done when you walk in the door. You can’t come in empty-handed.

Final Advice
So try your lien release, or if it’s a clear title, try your prior owner contact. If those fail, keep your documentation that you tried, and then let the court be on your side. This is one example where the court is your friend. They’re not against you. They’re not trying to harm you. They’re not trying to jam you up. The court is trying to help you deal with the bureaucracy of the DMV. And if you can get them on your side, there’s no more powerful ally in the world than the court, and you want to have that tool in your toolbox. Because the DMV, you know, as much as they want to help, it’s a bureaucracy. It’s a punchline of jokes on sitcoms, and you don’t want to be subject to that if you don’t have to.

Additional Resources
You also have the option in some states of doing a bonded title. That’s a subject for other videos. Make sure you subscribe to our channel. Go through our whole library. We have an extensive video library with videos about many, many subjects of getting a title, instructions for some of these processes, and if you want more information, you can check out our website cartitles.com or book a consultation with a certified title agent.

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Is Buying/Selling A Car With No Title Allowed Or Legal?

Is buying or selling a vehicle without a title a good idea? In this episode of car titles, we’re going to talk about how vehicle titles are more important than actually taking possession of the vehicle. We get hundreds of calls a day, sometimes over a thousand calls a day, and many of the time that people call in it’s because they’re considering purchasing a vehicle without a title and they want to know how they can get a title if they buy it.

Legal Advice: Never Buy Without a Title
In our sales department, we always have the advice to never buy a vehicle without a title. We never recommend doing it. Title is a legal government document you see like this and it’s something where if you buy a vehicle and even if you get a bill of sale even if you get the keys even if you get possession if you don’t get that certified title document you have nothing you’ve purchased nothing. The title document is the most important thing.

Legal Ramifications
So, can you buy a car without a title? Well, let’s talk about what happens if you do. In many states, it’s actually against the law to buy or sell a car without a title. Here’s the statutes from Texas: “The owner of a motor vehicle that is required to be titled must obtain the title before selling or disposing of the vehicle. That’s a crime if you don’t.” In Oregon, violating title requirements is also a crime.

Risk and Reality
Now, that doesn’t mean the SWAT team is going to come in and swoop down and pick you up. People buy and sell cars without titles all the time. Why do they have these laws? Well, it’s to protect you from the risks involved. If you purchase a vehicle without a title, in most cases, you could probably get a title 70-80% of the time. It’ll all work out. But 20 or 30% of the time, you’ll never get a title ever. And you won’t know that until you actually try to get a title.

Unreliable Checks
There’s no amount of searching VIN checks, car checks, background checks on a vehicle you could ever do to find out 100% if you will get a title. Forget about Carfax, VIN search, VinAudit, none of those places are going to tell you everything you need to know about getting a title. Even if it looks like it’s a clean vehicle, clean title, it doesn’t mean necessarily you get to be the owner of it, right?

Hidden Issues
Sometimes vehicles are not eligible for you to get a title because of something in the background. Maybe it’s a salvage title, maybe it’s a parts-only title, maybe it’s reported stolen. Some of that you can find out on Vin or Carfax, but if there’s a lien on the vehicle, you will never find that out by Carfax.

Lien Issues
It might say no lien found, but if you read the small print, they don’t search for liens everywhere. In fact, Carfax has about 10% of all liens in their system. So, you’re not going to find it. You can’t get that information from the DMV either because they’re not allowed to give it out.

Ownership Disputes
If there’s a lien on the vehicle, all title transfers are blocked. You cannot transfer title with a lien on the vehicle, even if it’s paid off, until the lien holder clears it. If there are any ownership disputes on the title, if the last owner maybe doesn’t agree or doesn’t want to cooperate with you to do a transfer, you’re going to have a problem.

Financial Risk
So, unless you’re willing to take the money that you’re looking to spend on that vehicle and completely make it speculative, put it at risk, don’t buy a car without a title. End of story.

Post-Purchase Solutions
Now, if you have already purchased a vehicle without a title, now you have to at least try something. It doesn’t hurt to try. You can try a bonded title, court order title, prior owner contact. There are many methods you could try to get a title. Our website has them all listed below.

Seller’s Responsibility
But if you’re considering purchasing a vehicle without a title, ask the seller, “Why don’t you have a legal title to give me like you’re supposed to under the law?” If they can’t give you a straight answer, then just walk away. It’s a scam. Even if they have an answer that sounds good.

Seller Reliability
Look, I can’t tell you how many times our sales staff comes to us and says, “Look, I talked to this person, the sellers seem legitimate, they seem like honest people, they were a middle-class couple, everything seemed legit, but I can’t get a title.”

Seller’s Post-Sale Reluctance
Even if the sellers have good faith when they’re talking to you about buying the vehicle, it doesn’t mean later they’re going to change their mind. Once they have the money in their hand, they’re not going to do anything to help you.

Common Problems
The number of times where something comes up that is more problematic than that is greater than you think. Many times there’s a lien on the vehicle, many times there’s a title pawn on the vehicle, many times it was sold at an auction like Copart or IAA and it has a salvage or parts-only title.

Salvage Title Challenges
Even a salvage title requires a very thorough detailed inspection. Sometimes the inspection has to go to the state where the last title was from. So, if you buy a car from out of state and it’s salvage, you would have to bring it back to that state, have it inspected, and have it approved.

DMV Hurdles
I can tell you this: the states don’t want salvage vehicles back on the road. The DMVs look for any reason they can to fail a salvage inspection because their official position is salvage vehicles don’t belong on the road. They’re for parts.

Financial Gambling
Technically, if you jump through a bunch of hoops, you can get it back on the road, and it happens 50% of the time. It’ll work. But again, do you want to take your money and give it a 50/50 chance of being thrown away?

Recovery Options
Would you go into the casino and bet $7,000 on blackjack or the roulette wheel? Because that’s what you’re doing by buying a car without a title.

Steps to Recovery
If you receive incorrect or incomplete information or lost it, remember that can happen too. You buy a card and lose it, you may have the option of using a bonded title. Here are the steps: Purchase a bond, apply for a bond.

Final Advice
Remember, purchasing a vehicle without a title is a risk. Make that decision wisely. If you decide to go through with it or if you’ve already purchased a vehicle and now you’re stuck and have to do something, then you can look at these methods: bonded title, court order title, prior contact. There are other things you can do.

Regretful Buyers
Most of the people who call us that already bought a vehicle without a title wish that they could go back and not do it because it’s not worth the hassle. It’s going to take your time, even if you do it all yourself for free.

Legal Framework
You know, you don’t have to pay anybody to get you a title if it’s your vehicle. You can do it yourself. But it may take you 10-15 hours of time to research, get documents back and forth, then you have to get the runaround from DMV.

Complexities
Then you have to wait for them and hope, cross your fingers that nothing comes up that prevents that title from being issued. Sometimes there’s another title that’s already been issued that blocks your title, sometimes there’s a prior owner claim, sometimes it’s a deceased owner where that vehicle has to go into probate.

State Laws
There’s a lot of things that can come up. We could never even get into them all in a video. But that’s why the states have these laws that it’s illegal to buy and sell a vehicle without a title. They just want to keep it simple.

Research
Investigate your state. You can do research. Every state has their statutes online. Transportation code, vehicle title and registration code. This one is for Oregon, but every state has these documents.

Conclusion
But even if it is legal, you probably don’t want to do it anyways because you could be out of luck and all your money’s gone. And now you have to worry about trying to resell it to somebody else without a title and cross your fingers and hope that you find a buyer or to sell it for parts.

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