The Problem: Paid-Off Loans with Persistent LiensSo, we’ve been seeing a lot more of this scenario show up with clients where you have a vehicle that you had a loan on at some point. You paid off the loan a long time ago, but there’s still a lien showing on your title record. How could that be? You paid off the loan, the bank sent you the title, the bank verified it, but the title record still has the lien. Here’s why. When you pay off a loan with the bank, the bank will take that title certificate that they’re holding on to. They’ll stamp it paid.
Bank Procedures and LimitationsThey’ll sign it. They’ll probably mail it to you. But what they won’t do is clear the lien from the official government title record. Why don’t they do that? Well, in order for the bank to clear that lien, they have to go through some steps. First, they have to have one of their employees fill out a bunch of forms. Probably take them an hour’s worth of labor. They have to file those forms with the government, pay a fee, wait for it to come back, and then send that to you. That all takes time and money. So, what the lender figures is, well, we sent our borrower a title. That’s good enough. It’s their problem from there.
The Risk of Lost DocumentationWell, what if you lose that title certificate? What if you lose the documentation they sent you? Well, think about it. At that point, the only two people in the world who know that that title is paid off is you and the bank. The DMV doesn’t know you paid it off. They never were notified. So, if you have received a title from your leanholder stamped paid, we highly recommend you will be back in your video in just a few seconds.
Recommended Action for Cleared TitlesThat you bring it to the DMV to have them clear it off your title record and give you another title without any mention of that lien on it.
Lost Title SolutionsNow, if you are in the situation where you have received a title and lost it and you need to get another copy, what you can do is you can file a written documentation request with your leanholder. Our website, Car Titles, will tell you how to do that to have them issue a lien release. They will not be able to send you another title. They only have one title to give you, and they can’t print titles. Only the government prints titles. So, you can request from the lien holder a certified lien release letter of non-interest. Once you get that, then you can file it with the DMV. You’ll probably have to pay the fee.
Proper Communication MethodHowever, if you’re going to request this document from the leanholder, don’t try to do it by phone. If you call them up and say, “Hey, send me a lien release.” They’ll either say, “Yeah, no problem. We’ll do that.” And they never will. They might even tell you flat out, “We’re not going to do it.” Right? They don’t want to spend the time. So, don’t waste your time calling them. Do it by mail. Do it in writing. Fill out the document. Send it to the lien holder for signature and go that route. Our website again will tell you exactly how to do that.
Related Scenarios and Additional ResourcesBut this is a very common scenario with people who have a paid-off loan and you can’t get the lien release. What about a charge off loan? What about if it’s not paid off, but a charge off? It’s a similar scenario. Look at our YouTube channel. We’ll have some videos about how to get a charge off loan off of your title record.
Visit Our YouTube Channel for more insights and discussions on various topics. Consider subscribing to our YouTube channel. Click here!
Understanding Vehicle Titles:Today we’re going to talk about a couple of types of titles that you may be running into if you’re buying cars at Copart or IAA or you have a car that came from there. Many times these are called junk or parts-only vehicle titles. In some states they’re called non-repairable. For example, in Florida they call them certificate of destruction. There’s a version in Kentucky called a Kentucky red title and that’s their version of what’s called the non-repairable certificate.
Impact on Different States:What does this all mean and how does it affect different states? Well, a vehicle that goes through an insurance claim process where the insurance company decides they do not want the vehicle back on the road can issue this designation called a junk or parts-only or non-repairable and they put it into a system that goes to all 50 states.
State Regulations and NMVTIS:Here’s what Tennessee says about it in their state. This is from the Tennessee Department of Revenue. They talk about the other states. Kentucky red titles are the equivalent of a Tennessee non-repairable title. They’re damaged beyond repair. Now, you may find vehicles that have no damage that have this, and we’ll talk about that.
National Motor Vehicle Title Information System:A vehicle that is not repairable may not be registered in Tennessee or really any other state. Why is that? Well, there’s such a thing as the National Motor Vehicle Title Information System, and that is a federal government record system that takes information from one state and transmits it to all the other states.
Purpose and Coverage of NMVTIS:Every time a vehicle is titled, changes ownership, or is registered, all states get that information from this National Motor Vehicle Title Information System. And it’s originally designed to prevent stolen cars and title fraud and different types of problems that somebody would want to know about.
Legal Implications and Enforcement:What happens is anytime there’s a title brand put on a car, it goes to all 50 states plus Guam, Puerto Rico, and Washington DC participate in this. And what does the law say? The law says that information within NMVTIS, the National Motor Vehicle Title Information System, shall be available to jurisdictions, states, federal and local law enforcement, insurance companies, and prospective purchasers.
Protection and Prevention Measures:So, it’s saying that this information is out there. It’s for people to see. It allows jurisdictions to verify the validity of titles prior to issuing new titles. It prevents title fraud and auto theft. So that’s the reason for having this. In addition, it tracks odometers to make sure nobody’s rolling back mileage on vehicles.
Minimum Capabilities and Functions:And the federal law that went into place has five capabilities at a minimum. Five minimum capabilities. First of all, validity of a title. Second, the title state for a vehicle. What state is a title in? Number three, whether an automobile is non-repairable or known as junk or salvaged vehicle. That’s the number three one. And it repeats it again.
Data Transmission and Record Management:Has it been reported as a non-repairable or junk? It’s so important they put it twice on the list. Now, it also does something else. When a vehicle moves to a new state, the NMVTIS notifies the old state, allowing the old state to inactivate the title record, which means you can’t get a duplicate title in the old state.
Vehicle Safety and Inspection:They can purge the record. So, if you move from one state to another, your old title becomes invalid. And why do they want to have this out there? Because it gives buyers the ability to check for vehicle safety and reduce unsafe vehicles on the road.
Florida’s Implementation:Things like salvage or crash vehicles might have safety issues that need to have inspections done or more thorough investigations into the repairs and they check this. This is the procedures manual that happens to be from Florida. All title transactions performed on Florida title vehicles will make an inquiry to NMVTIS.
Title Brands and State Regulations:This will ensure that the vehicle has not been titled in another state since being titled and brought back to Florida because people sometimes will do that to try to remove a title brand. They’ll flip it from one state to another. But NMVTIS prevents that from happening and this includes the title brands.
Brand Validation and DMV Process:When an application for title is being processed, emphasis must be placed on the brands reported by NMVTIS rather than the brand that’s on the title. This is important. Your title certificate, if you have one for the vehicle, might not have any brand on it. Might be clear, right? However, the DMV is going to go by what’s in the record, not by what is on the title.
Types of NMVTIS Brands:Brands reported by NMVTIS will be automatically carried forward to the title. There are two NMVTIS brands, which will result in no Florida title certificate being issued: dismantled or junk. And then junk has those different versions in different states: non-repairable, parts-only.
Recovering Title Status:So, how do you undo this? If it’s a junk title, how do you get a title for it? Well, there are two ways to get a junk, non-repairable certificate of destruction vehicle back on the road.
Options for Resolution:One is to get a new VIN number, and the other is to have the brand undone. Why would you need a new VIN number? Well, like the manual said, if you have a vehicle with a junk VIN number, they can’t give a title, but you could get a new VIN number.
Court Order Process:It says if a new VIN has been assigned to a vehicle, you can’t use the old VIN for a title. You can get a new VIN by calling it an assembled vehicle or a kit car, and that’s a process you can go through. Or you can do what’s called a court order reduction, meaning that you can file a petition with the court to have the court override that non-repairable junk title status.
Challenges and Legal Steps:You have to give the court evidence where they will override the reason that was done. And they don’t have to do it, but that’s the only way you can even try to get the non-repairable junk status removed from a vehicle because once it’s in that NMVTIS brand code, and you can see here, number eight is junk, number seven is dismantled, then you can’t get a title in almost every state.
State-Specific Regulations:Well, in every state, certainly in Florida, there are other types of junk or salvage title determinations that some states won’t accept on top of seven and eight. Some states won’t accept reconstructed or rebuilt, right? So, you have to be very careful.
Conclusion:But if you do have a seven or an eight dismantled or junk, you have to either get a new VIN number issued or have a court override that. And there’s a court order title application process you can attempt. Again, it doesn’t always work, but that’s the only chance you have. If you don’t do it, you have 0% chance of getting a title. At least with that, you may have some chance.
BREAKING NEWS ON MONTANA LLC TAX LOOPHOLEWell, here it is. The big breaking news on the Montana LLC loophole kind of tax evasion. If you’ve been watching our channel for any length of time, you know we’ve been reporting on this Montana LLC title process that’s been used really going back five or six years now. And if you notice, we’ve mentioned that many DMV commissioners have been talking amongst themselves about doing a big crackdown, a big bust of the people that are using this process. And in the internal meetings, they’re mentioning putting together task force operations and starting to do monitoring and enforcement.
CRACKDOWN CONFIRMED BY MAJOR PUBLICATIONWell, big breaking news today out of Car and Driver Magazine, major publication, friends of the channel. We’ve actually been featured in their magazine before that there’s a crackdown on the tax dodging practice by citizens and it’s starting out with a few states. They mentioned Utah and California, although there are seven states right now that are starting to do enforcement and prosecutions and we’re going to get into that a little more in detail here in a minute.
WHAT IS THE MONTANA LLC LOOPHOLE?But what is the Montana LLC loophole? This is a process where if a person has a vehicle that either has a title or doesn’t have a title that they don’t want to go through their state, they want to avoid their state for whatever reason. Maybe they’re trying to avoid taxes. They’re trying to avoid smog inspection emissions. They’re trying to avoid the title process. They’re going to do a Montana process.
WHY MONTANA? WHY LLC?Now, why is it called LLC? Well, no state can give a title to a non-resident. You have to be a resident of a state to get a title from that state. That’s always been the case. You can’t just say, “Well, I live in New Jersey. I want to get a title from Colorado.” You have to get a title from the state where your driver’s license is located. So, what people do is they form a company, an LLC corporation in the state of Montana and then put the vehicle in the name of that corporation, right? And technically, that part’s legal. You can put a vehicle in the corporation name. Montana will let you do that.
NO SALES TAX AND MINIMAL REGULATION IN MONTANAAnd the reason why people use Montana is Montana is a state that does not have sales tax. So when you register a vehicle, you don’t have to pay sales tax. And they don’t have a lot of inspections and emissions and a lot of the regulations that other states have. So many people will use that loophole for their vehicle.
SIDE NOTE: NOT AS EASY AS IT SEEMSNow, just a little side note, the process isn’t any easier than just going through your own state. If you have a title problem, you only have a bill of sale, maybe you have missing documents, you’re not going to be able to magically get a title from Montana. You still have to do some process like a bonded title or a court order title in Montana. So that is not really any different from going through your state.
REAL MOTIVE: TAX AND INSPECTION AVOIDANCESo really, the only difference is you don’t have to pay tax and you don’t have to do emissions. So people think, well, it’s legal, so I’ll do it. Ah, but it’s not really legal. The reason why is the tax is not a sales tax. Taxes for vehicles is a sales and use tax. That’s what the tax is called in the statute.
SALES AND USE TAX MEANS YOU OWE TAXES WHERE YOU LIVESo if you title your vehicle in Montana and then use it in your state, you’re actually evading taxes. Even companies like FedEx or Amazon when they title vehicles in other states, if they use them primarily in a state where they deliver the packages, they have to pay taxes in that state.
ENFORCEMENT HAS BEGUNSo what is happening now? What’s happening now is the other states besides Montana that have been losing tax revenue are now rolling out the prosecutions doing sting operations. They’re doing all kinds of enforcement.
HOW THEY’RE CATCHING PEOPLEHow are they catching people? Well, one way to do it is if they see a Montana plate driving around, they can run the plate and if it’s LLC, they’ll pull it over and they’ll check who’s driving it, what the ownership is. But more importantly, they’re using, and we’ve talked about this on this channel many times, ALPR, automated license plate readers, where around town, they will have cameras that read license plates that will identify a Montana license plate, the same one, driving by over and over for weeks or months at a time. That’s obviously not somebody just on vacation. That’s somebody who is living there.
PURSUING $100 MILLION IN BACK TAXESAnd that’s what they say in this article. The DMV is using plate readers to sniff out Montana plated cars and tracking registrations to catch tax evaders, going after what could be $100 million in back taxes and penalties. So, they’re not playing around.
GOING AFTER LLC MILLSThey’re also going after what they call LLC mills. These are companies that do this Montana process for you. They charge you a fee, and they’re starting to crack down on those. Remember back in the ’90s, there were a few kind of fly by night sketchy car title companies that were using illegal methods to get people titles like fraudulent mechanics liens and some other sketchy methods. And there was one in Nevada. There was one in Tennessee. They all got busted. There are people in prison over that.
NOW TARGETING SERVICE PROVIDERSSo now they’re starting to also crack down on the providers of these services knowing that they’re illegal. And many states have now passed laws closing the loophole.
MULTI-STATE ACTION AGAINST TAX DODGERSTrickier to dodge the sales tax unless you live in Montana. So that’s obviously if you live there, you can register there, not a problem. And in reality, it’s not new. Back in 2019, a few years ago, Georgia did this. They cracked down, but they were a single state. This is a collection of states that’s doing this, and they’re working together to get the records. They can get the records directly from the Montana LLC Secretary of State to find out who the owners are, who the registered agents of that company are, and if they see you’re out of state, they’ll slap you with tax evasion.
MONTANA’S SKY-HIGH CAR OWNERSHIP RAISES FLAGSWhy is this happening? Well, Montana has the highest car ownership by population in the United States, more than double California. That’s because many people are putting cars in their name in Montana, even though they don’t live there. Again, they’re cracking down on using this to dodge paying taxes.
EVEN IF YOUR INTENT WASN’T TAX EVASIONEven if you did the process for some other reason besides just avoiding taxes, if you didn’t pay the taxes afterwards in your state, they’re still going to say, “Well, you did it for another reason, but since you didn’t pay the taxes, that’s tax evasion.” And they’ll come after you for taxes, penalties, interest. They could even seize your vehicle.
BREAKING STORY CONFIRMED APRIL 30THSo, this is breaking news. This article came out April 30th. That was yesterday. We’re recording this on the 1st of May. And if you’ve been watching our channel, you’ve seen the prediction of this coming. And it’s not a prediction. We’ve heard from the DMV commissioners. We work with them all the time, the different states’ DMVs, and they’ve told us that it’s just a matter of time. They had to put together the task force, put together the investigative resources, put together the rules for their state, and now they’ve kind of dropped the hammer, and people are going to find their titles will be revoked.
EXPECT VEHICLE SEIZURES AND PROSECUTIONSThere will be penalties and interest. Some people will have their vehicles seized and there will be some people that will be criminally prosecuted. Probably a few people go to jail, especially the ring leaders, people organizing this and doing it on a large-scale basis.
THE REASON WE NEVER OFFERED THIS SERVICESo, it’s happening now. Now again, once you see it in Car and Driver, that means it’s making the mainstream news. And like I said, we’ve seen it for over a year now where the states have been telling us this is what’s going to happen. And that’s the reason why as a professional certified title company, we never got involved with this. We never did this Montana process.
OUR LONG-TIME CLIENTS ASKED—WE SAID NOWe’ve had clients that we’ve been doing business with for 20 years that said, “Hey, you know, why don’t you do this Montana thing? It seems like a big deal.” We’ve told them this is not going to end well for people who are doing it. Consumers maybe who did it years ago, you might be able to get away with it. But recent registrations will probably get revoked.
DIFFERENCE BETWEEN MONTANA AND VERMONT LOOPHOLEAnd a lot of people ask, well, what’s different between this and the Vermont loophole, the Vermont registration loophole? Because we did those. The difference is this. There was no tax evasion. People who did the Vermont loophole paid taxes and it wasn’t designed to leave the Vermont plate on the vehicle and drive around with, right?
VERMONT LOOPHOLE WASN’T TAX EVASIONYou would actually use the process to get something with your name on it as an owner and then transfer to your state. That’s different. That’s not evading anything. You’re still going through the process of your state. You’re still paying your tax. You’re still abiding by all the rules of your state. It’s just that it’s one step to help you get some documents that’ll allow you to be eligible to register in your state. So, that’s a whole different thing.
MONTANA CASE WILL BE MUCH WORSEThat one still got shut down eventually because some states didn’t like the fact that people weren’t primarily using like a bonded title or a court ordered title. But even something as innocent as that got shut down. This Montana thing is really going to be bad. Mark my words.
Many vehicle owners in high-tax states have heard about a seemingly clever strategy: forming a Montana LLC to register their vehicles and avoid paying hefty sales and registration taxes in their home states. This practice is especially popular among owners of luxury cars, exotic sports cars, RVs, and boats. But make no mistake—despite its popularity and the many businesses facilitating it, this tax avoidance scheme is illegal in most circumstances and carries serious consequences.
The strategy is straightforward: A resident of a high-tax state forms a limited liability company (LLC) in Montana, makes that LLC the official owner of their vehicle, and registers the vehicle in Montana with that LLC’s address. The appeal is obvious—Montana charges no sales tax on vehicle purchases and has relatively low registration fees.
“Under Montana law, a business entity formed in Montana can title and register vehicles it owns in Montana no matter where the vehicles are located.” (Draneas, 2024)
Companies specializing in this service advertise widely, with some charging as little as $1,049 for a package that includes LLC formation, registered agent service, and vehicle registration assistance.
Despite what service providers might claim, this isn’t a legal “loophole”—it’s tax evasion when the vehicle is primarily used in another state. Most states have clear laws requiring residents to register vehicles in their state of residence if the vehicles are primarily kept or operated there.
In California:
“California law also provides that an LLC formed in another state but owned at least 50% by California residents is treated as a California resident for vehicle-registration purposes.” (Draneas, 2024)
In Utah:
“The law specifically says that if a business entity has a vehicle and operates that vehicle primarily within Utah, the same standard applies. That business entity is deemed to be a domicile area of Utah or resident of Utah for purposes of registration as well.” (Gephardt, 2023)
Similar laws exist in Georgia and most other states. The legal reality is simple: if you live in a state and your vehicle is primarily operated there, you are required to register it there and pay applicable taxes—regardless of any Montana LLC ownership structure.
The penalties for this form of tax evasion can be substantial, involving far more than just paying the evaded taxes:
In Utah, if caught, vehicle owners face “all the back sales tax and 100% penalty of the sales tax amount that wasn’t paid. So basically, double sales tax” (Gephardt, 2023). On a $100,000 vehicle with an 8% tax rate, that means $16,000 instead of the original $8,000 tax.
In California, owners must pay:
Beyond financial penalties, there can be criminal consequences. In California, a resident named “Trevor” faced potential criminal charges after authorities executed a search warrant on his home and seized his Montana-registered sports car (Draneas, 2024).
In Georgia, authorities conducted what they called the “largest criminal investigation ever into the Montana tax scheme,” executing search warrants on homes and properties belonging to exotic car collectors. The investigation targeted two wealthy Georgians who had purchased approximately 50 exotic cars between them over a four-year period, allegedly depriving Georgia of more than $1 million in tax revenue (WSB-TV, 2019).
Authorities can and do seize improperly registered vehicles. In California, vehicles were seized during the execution of search warrants (Draneas, 2024). In Utah, officials warn that boats with improper registrations “might get impounded and won’t be released until state taxes are paid and settled in court” (KSL, 2024).
States are becoming increasingly sophisticated in their methods to detect improperly registered vehicles:
In California, investigators have visited repair shops to identify vehicles with Montana plates being serviced locally (Draneas, 2024).
In Georgia, authorities have:
Utah recently considered legislation (SB52) that would allow insurance records to be compared with DMV databases to identify vehicles registered out-of-state but insured in Utah (KSL, 2025).
Enforcement actions and public awareness campaigns can quickly change behavior. After Georgia’s WSB-TV aired an investigation into Montana registrations, officials reported that within 24 hours, owners had changed the registration on about 20 cars from Montana to Georgia, resulting in more than $100,000 in tax revenue (WSB-TV, 2019).
In the California case, authorities seized the vehicle owner’s cell phone during their investigation. Why? Cell phones contain a wealth of evidence:
Beyond legal issues with state authorities, this scheme creates potential insurance problems. Many insurers might refuse to pay claims if they discover a vehicle resides somewhere other than what is listed in the policy (Gephardt, 2023). This leaves owners vulnerable to significant financial loss in case of an accident.
While the Montana LLC vehicle registration scheme might seem like a clever way to save money on taxes, the financial risks, legal consequences, and increasing sophistication of enforcement make it a dangerous gamble. With states actively cracking down on this practice and penalties often doubling the original tax obligation (not to mention potential criminal charges), the short-term savings simply aren’t worth the long-term risks.
If a Montana LLC vehicle registration service claims this strategy is perfectly legal, remember that few things in life are certain except death and taxes—and trying to avoid the latter can lead to serious consequences.
Sources:Draneas, J. (2024, June 17). California Cracks Down on Montana LLCs. Sports Car Market. https://www.sportscarmarket.com/columns/legal-files/california-cracks-down-on-montana-llcs
Gephardt, M. (2023, February 21). Utahns save thousands in sales tax by registering new cars in Montana. But is it legal? KSL. https://ksltv.com/526269/utahns-save-thousands-in-sales-tax-by-registering-new-cars-in-montana-but-is-it-legal/
KSL. (2024, November 12). Registering your boat or OHV out of state to save on tax money is illegal warns Utah officials. KSL. https://ksltv.com/ksl-investigates/registering-your-boat-or-ohv-out-of-state-to-save-on-tax-money-is-illegal-warns-utah-officials/705364/
KSL. (2025, January 23). Lawmakers seek crackdown on Utahns illegally registering their vehicles out of state to avoid sales taxes. KSL. https://ksltv.com/politics-elections/utah-legislature/lawmakers-seek-crackdown-on-utahns-illegally-registering-their-vehicles-out-of-state-to-avoid-sales-taxes/730140/
Winne, M. (2019, November 23). Wealthy Georgians with exotic cars accused of cheating local taxpayers. WSB-TV. https://www.wsbtv.com/news/local/wealthy-georgians-with-exotic-cars-accused-of-cheating-local-taxpayers/858532353/
WSB-TV. (2019, November 23). $100K in taxes paid after Channel 2 investigation into exotic cars. WSB-TV. https://www.wsbtv.com/news/2-investigates/more-than-100k-in-taxes-come-in-after-channel-2-investigation-into-exotic-cars/860469930/
Jalopnik. (2018, November 4). Georgia Is Cracking Down On Instagram Bros Registering Supercars In Montana To Avoid Taxes. Jalopnik. https://www.jalopnik.com/georgia-is-cracking-down-on-instagram-bros-registering-1830035589/
Atlanta Journal-Constitution. (2018, October 25). Luxury car owners dodge Georgia tax with Montana scheme. Atlanta Journal-Constitution. https://www.ajc.com/news/luxury-car-owners-dodge-tax-with-montana-scheme/eF1HopLGbDX8EuvYzgNo6J/
Missoulian. (2023). ‘The Montana scheme’: How the wealthy avoid taxes on luxury vehicles, RVs. Missoulian. https://missoulian.com/news/local/business/montana-luxury-car-tax-avoidance-non-residents/article_1f46105e-4c36-11ee-86ad-5bb0a78abd77.html
Bozeman Daily Chronicle. (2017, January 22). Out-of-state car buyers use Montana LLC’s to evade taxes. Bozeman Daily Chronicle. https://www.bozemandailychronicle.com/news/out-of-state-car-buyers-use-montana-llcs-to-evade-taxes/article_b4b37d29-e894-523e-b0ed-be7c0bf7e398.html
What Is a Vehicle Lien Release?What is a vehicle lien release and how do you get one? Well if you’ve paid off your car, paid off the loan, and you need to get the title for it, what happens is the lender, the bank you borrowed the money from, normally will take the title that they were holding. Because when you finance a car, they hold the title, they don’t give it to you because they’re the lien holder. They hold the title and when you pay it off, they take that title out of their drawer, they sign it paid, stamp it, and they mail it to you.
What If the Title Gets Lost?But what if you lose that title? What if they never send it to you? What if it gets lost in the mail? Well, the problem is, even though you paid off that lien, the lien record will still be in the DMV database because the lien holder normally doesn’t remove it from the lien record. They just sign it, stamp it, and give it to you. So then what do you do? Well, the lien holder doesn’t have another title to give you. You can’t call them up and say “Hey, mail me another title.” They only have one title.
Getting a Lien Release DocumentBut what you can get is a lien release and on the screen you see an example of that from the state of Texas and it’s a form that the lien holder can look up. There’s a few other forms that go with it and they can fill it out, sign it, mail it to you. And then once you get this, you bring that to the DMV and they give you a title. Well, how do you get it? Well, a lot of times people will say “I’ll just call up the lien holder, I’ll pick up the phone, I’ll dial my bank and I’ll tell them I need a title or lien release.” And the lender is going to tell you one of two things. They’ll either tell you “Yeah we can’t do it because we already gave you one.” Or they might say “Yeah we’ll send it.” And then they never do. People have been waiting months and they never get it. Sometimes they’ll tell you to go to some website to order online, but the website doesn’t really have anything.
Why the Lenders DelayThe reason for it is because lenders, banks, financial institutions, car loan companies, they don’t have a lien release department. There’s not people just sitting around in an office somewhere waiting to do this work—to pull up this form, find it, look up the records, sign everything. They have to sign a bill of sale, they have to sign a letter of non-interest, they have to do a bunch of work. There’s nobody sitting around with that extra time to do it. So they’re going to just kind of give you the runaround and blow you off. They’re going to say “Get out of here.”
Prepare the Forms YourselfSo what do you do? The best way to do it, even though it doesn’t seem fair, is for you to prepare all the forms. This form you see on the screen, this release of lien, is one example. A letter of non-interest, declaration of facts, the three or four documents that they need. You prepare them all, print them on paper and mail them to the lien holder. What we have found over the years is that’s really the only way.
Making It Easy for the LenderAny chance of getting that lien release, even though you should have it and we think you deserve it, the bank’s not going to do it unless you do all the work. And that’s how we do it. This is an example of a package that we send to lien holders. We prepare all the documents—the lien release, the letter of non-interest, declaration of facts. We also put an envelope in it for them to send it to the client with a stamp on it. That way the bank doesn’t have to do any work, all they have to do is sign it. Then we also prepare the documents that the client needs for a title because once you get the lien release, now you have to go to DMV to get a title or mail it in. We give you an envelope to mail it to the DMV too.
Recommended ProcessSo what we recommend doing is to do it the same way we do—prepare this package of documents, send one half to the lien holder, one half to the DMV, and you’ll get your title. It’s a little bit of a pain in the neck because you have to look up these forms, find out where they are. They’re all available, you know, from the DMV. You can go down to the DMV in person, ask them for these forms, take them, fill them in, mail them to the lien holder, put a return envelope with a stamp. We recommend that because here’s the thing—see this book of stamps? Not many people or companies have stamps laying around anymore because everything is online, bill pay, nobody has stamps. So if you send your document to the lender, they sign it, and now that person at the desk is looking around for a way to send it—they don’t have a stamp, they have to go to the mail room—they’re just going to throw it away. They don’t want to do any work. So do the work for them.
If You Didn’t Pay Off the CarNow what if you didn’t pay off your car? What if it’s a charge off or a write-off? You can do the same thing. You can prepare that package of documents, mail it to the lender. Most times they’ll pull it up on their screen, yep it’s a charge off, and they sign it and mail it to you. There’s a backup with a magistrate title we’ve talked about in other videos, you can look that up. Either way, if you’re going to try to communicate with the lien holder, don’t torture yourself by trying to do it by phone or email or fax or text. Do it all in writing.
Final Tips and RemindersIf you do anything where they have to do any kind of work, that package of forms takes an hour or so to put together, an hour and a half sometimes, sometimes two hours. If you’re asking them to do it, there’s probably not going to be a person there that wants to drop everything else in their job and do this for you. So even though it’s a little extra work, if you want that lien release, put that together. Our website will give you instructions on how to do it. It’ll make it a little bit easier for you. But don’t leave it to chance and let that lien holder drag you around and basically give you the runaround and not give you what you need to get a title for your vehicle.
Tell us about your vehicle and we'll direct you to a title recovery method that matches your scenario.
"*" indicates required fields
