Hello, this is Dave Pelligrinelli at Car Titles. Lately, we’ve been getting more requests for lien releases on vehicles from a lender called Yendo, and this is a very innovative type of lending institution. What they do is they provide you with a line of credit, like a credit card, that is tied to your vehicle.
How Yendo Lending WorksSo what they do is they get the title for your car, they hold on to it, and they give you a credit card that you can use to borrow against or pay down. It’s not any kind of fixed amount—it’s a very innovative lending business model. But what you want to make sure of is, whenever you close that account or pay it to zero, that you get a lien release from the lien holder. That way, if you ever need to sell your car or trade it in, you actually have a lien release.
Customer Experiences with YendoThe last couple of inquiries we received were from people who had a loan with Yendo. They had a credit card, and they had just recently paid it to zero but hadn’t canceled the card yet, and their car was totaled. So, they had to get a title so they could get their insurance money. Remember, as long as that card is still active, they’re going to hold a lien on that vehicle because you could charge it up any day.
Importance of Lien ReleaseYou want to make sure you get a lien release document. If you need assistance on how to do that, you can check out our website. If you want assistance with the paperwork, we can handle that as well.
Yendo’s Unique Lending ModelThis Yendo credit lending on vehicles is an interesting new twist on vehicle loans, and I’m wondering if anybody here in the comments has experience with it. Did it work out for you? What has your experience been dealing with that company? So far, we’ve had really good luck dealing with them to get lien releases. As long as there’s no type of conflict with the company, they’re very good at providing the documentation.
Yendo’s Customer RelationsIn some cases, even when there’s a delinquency or a charge-off, they have provided a lien release because it’s a charge-off. But in most cases, they will deal with you very straightforwardly as a lender. They’re very well-known, and if you look at the bottom, they’ve been featured in all kinds of media and publications for their unique and novel approach to lending on vehicles.
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Calls Regarding Vehicle Title ServicesWe get a lot of calls in our vehicle title division about filling out forms and doing paperwork. We have a service for doing paperwork, and a lot of people think that the hardest part is filling out the paperwork.
The Hardest Part: Finding the Right PaperworkThat’s not always the hardest part. The hardest part is actually sometimes locating the right paperwork and determining which paperwork to use. Sometimes it’s filing and figuring out how to fill it in properly, but it’s more than just a fill-in-the-blanks type scenario.
Importance of the Process Beyond Filling Out FormsA lot of our clients that buy title services from us appreciate more the fact that we found the paperwork, located it, figured out the process to use, and then filled it in, more than just filling it in. Look, if it was just a matter of filling in the paperwork, no one would really need to pay any money because you can do that yourself.
Printing and Processing: Key to Successful PaperworkBut first, you have to get the paperwork, then you have to print it out, then you have to figure out what order to do the steps in. So when it comes to doing any kind of government process, locating the right process, locating the right forms, and figuring out how to proceed with it is as important as just filling in the blanks.
The Complexity of the Government ProcessIf it was just filling in the blanks, color by numbers, then anybody could do it. But a lot of times, people don’t know what the process is, don’t know how to proceed with it, and don’t know where to get the form.
Digitized Car TitlesWe’ve covered this in some other videos before, but our membership and participation in eart, which is a coalition of major companies trying to get car titles to be digitized, along with companies like DocuSign, CarMax, and Carvana, is starting to pay off. Look at this news story—California DMV has put 42 million car titles on the blockchain. They’ve digitized vehicle titles. This is a great development and all part of the push to make vehicle titling more modern, where you don’t have to worry about paperwork, documents, and signing forms.
California Leads the WayThis is huge progress, and California, being the largest state in population, will lead the rest of the country. So, what does this mean for people with titles? By digitizing 42 million titles using blockchain technology, first of all, it’s going to prevent fraud. Most importantly, it will smooth the car title process, so it’s not going to be quite as bureaucratic. It’s not going to be quite as much of a nightmare to deal with the DMV.
The Convenience of Digital TitlesYou’ll be able to get vehicle titles through a mobile app. Think about that—think about what you have to go through now to get a vehicle title. How much paperwork, hassle, and runaround do you have to deal with? How great would it be just to do it with an app?
Lean Releases and TransparencyThe other part is going to be lean releases. First of all, it’ll block lean fraud, but it’ll also provide a transparent record of property ownership. When you pay off your car or pay off your lean, you won’t have to go chasing that lean holder to release your lean because it’ll be something you download on your phone. Your lean release is already right there.
Timeline and Opt-Out OptionIt may take a little bit of time. They say that you’ll be able to access your digital car title starting early next year, so less than 12 months. It’ll also be something that you can opt out of. If you don’t want to have your title on your phone, you can still go paper if you want to.
Exporting VehiclesWe get a lot of calls in our car titles division about people who want to export vehicles. Sometimes the business model is they want to buy a new vehicle in the United States and export it to another country. Why would you want to do that? Well, there are some vehicles that are not sold in other countries. Some Highline vehicles, like Land Rovers, especially, are not sold in places like China or India, and there are wealthy people in those countries who are willing to pay a premium for them.
The Profit Potential and ChallengesEven if you pay full sticker price for some of these cars in the US, by the time you pay shipping and export fees, you can still make a lot of money by selling them in China. The problem is, these vehicles are not allowed to be sold in those countries. What happens is, the dealerships that sell them are very suspicious of people buying them to export to another country. Why would the dealership care if you’re paying full price for the vehicle? Who cares where it’s going? Well, they do care.
Dealerships and Manufacturer RestrictionsIf you are a franchise dealership, let’s say for Land Rover, Mercedes, or BMW, and you sell a vehicle without performing proper due diligence to ensure it stays in the United States, and it ends up in China, the manufacturer will find out. They may penalize you financially, cut your allocations—meaning they won’t give you as many cars to sell in the future—or even pull your franchise if this happens enough. So, dealerships look for red flags. Is someone buying a car and wanting to register it out of state? Are they buying a car without living in the area? Do they have other cars in their name? Are there red flags on the transaction? These vehicles are not supposed to be sold in other countries, and the dealership is the frontline for the manufacturer to ensure this doesn’t happen.
Why Manufacturers CareWhy does the manufacturer care if the vehicle goes to another country? They want these cars in the US because they generate service and repair business. If someone buys a car in the US, in three or four years, they’re probably going to buy another car of the same brand. If the car goes overseas, they’re going to lose that future business. In addition, the manufacturer may sell other models of that car in other countries that aren’t as competitive, so they could lose sales in other countries because these cars came from the US.
Potential Legal Issues for ExportersThe reason we say this is that sometimes people call us up and say, “Hey, I want to get into the business of flipping these cars—buying new cars from dealerships and sending them overseas.” The problem is the dealership is going to be very cautious about doing it. There will be some export problems because you won’t have a title—you’ll have a manufacturer statement of origin. Some people who want to do this want to avoid sales taxes and try to figure out how to do that. In most cases, the only way to actually make money doing it is to do something illegal. Otherwise, it’s not going to be profitable. Sometimes, those things that are illegal seem like legitimate loopholes, but technically, there may be some violations involved.
Compliance and Due DiligenceYou have to declare vehicles that are leaving the country. CBP doesn’t let you export vehicles without declaring them, so you have to declare it. You can’t hide it in a container. You have to have a title—normally, they don’t want cars leaving with a manufacturer statement of order or MSO. If you are a dealership coming across this, we can talk about some things that will help you identify it and perform due diligence on your buyer. If you are a potential exporter, make sure that you’re following all the rules of purchase. Sometimes, your purchase agreement will state that if you sell it overseas, you may have a financial penalty that you have to pay to the dealership, and they could sue you for that.
Consequences of Illegal ActivitiesThese kinds of exports may seem, on paper, like, “Well, if it’s my car, I bought it, who cares if I export it?” But there may be some restrictions. Now, this article you’re reading on screen shows a person who took it a step further. They were getting loans on the cars in other people’s names, selling them overseas, and not paying off the loan, essentially getting a free car and keeping all the money. But even if you purchase it legitimately by paying cash, there are still some red flags that could arise between exporting it and laundering the title paperwork.
Electronic Vehicle Title TransfersAll right, so here it goes again, some more great news from the vehicle title industry. It’s kind of a snowball effect. The dominoes are falling, and more and more states are going to electronic title transfers. And as you know, we’re one of the founding members of the EART Coalition, a group of companies promoting electronic titles. Some of the partners in that group are DocuSign, CarMax, Carvana, companies and industries that have a vested interest in getting vehicle titles into the modern era rather than just old-school paperwork and documents with ink.
Michigan Allows Online Title TransfersSo here’s another state. Vehicle title transfers are now available online. Not just titles, but you can actually transfer them online. So how does this work? In Michigan, residents can now transfer a vehicle title online through a website. To transfer a vehicle online, both the buyer and seller must have a valid Michigan license. So there are a few requirements.
Eligibility for Online Title Transfers in MichiganTo transfer a title online, you must have a paper title. The vehicle must be a car, minivan, or truck. Camping vehicles and ATVs are included. The transaction must be between one individual seller and another individual; it cannot involve companies or co-owned vehicles. The vehicle cannot be financed. Eligibility checks will be performed throughout the transaction, and you can transfer it online.
Expansion of Electronic Title TransfersMore and more states are going to do this. We expect that within the next 12 to 18 months, many states will have vehicle title transfers electronically, which is how everything else is done nowadays. You can buy a house online now; everything is electronic. However, the government is dragging its feet on electronic titles, something we’ve been promoting for years. It’s now starting to come to fruition. Be glad you’re not going to have to deal with old-school paper titles soon. For the moment, you probably still do, but hope is coming. Soon, you’ll deal with the DMV in the same way.
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