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.
Visit Our YouTube Channel for more insights and discussions on various topics. Consider subscribing to our YouTube channel. Click here!
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.
Lean Release Request PackageYes, when we prepare the lean release request package to send to lean holders, we also include what’s called a letter of non-interest. What is a letter of non-interest? Well, when a lean holder is requested to sign a lean release document as they’re, you know, um, they need to do to clear the lean off the title, sometimes if it’s an old lean, if it’s a charge off, if it’s a write off, if it’s not in their system, they can’t sign a lean release cuz technically they can’t release something they can’t see. They can’t release something that is not current.
The Challenge for Clerks and AdministratorsSo sometimes the clerk or administrator or the receptionist that’s signing it says, “Well, I can’t see that it’s released. I see that it’s charge off, I see it’s a write-off, I see it’s bankrupt, I see that it’s out of the system, but I don’t see release so I can’t sign this.” However, a letter of non-interest is an alternate document that basically says we no longer have any interest in this vehicle, or we don’t have an interest in this vehicle. Maybe the bank sold off that loan to another bank.
Simplifying the Process with a Letter of Non-InterestBut if they’re listed on the title, they’re the only ones that can sign off on that title. So if you provide them with a letter of non-interest, that’s a lot easier to sign because they can look on their system and say, “We don’t have an interest in this vehicle. It’s a write-off, it’s a charge off, we sold that loan to another bank, it went bankrupt, it was not in our system, it’s purged, it’s voided.” So by including that letter of non-interest, you’re increasing your odds that you’re going to get something back.
The Importance of a Return EnvelopeBecause if you just send a lean release, it’s an official document. It looks, it says, you know, under penalty of perjury, sometimes has to be notarized. Many times that clerk or person at the bank may not be sophisticated enough to know that they need to sign that. But a letter of non-interest is a lot more likely to have somebody say, “Yeah, we don’t have an interest in this vehicle,” sign it, send it back. As you know, we’ve said this before, it’s important to send a return envelope with that document because you don’t want them to throw it away cuz they don’t have a stamp.
Final ThoughtsSo, letter of non-interest and return envelope is part of the process. Make sure that you follow all those details because leaving one of them out could be the difference between getting a clean title and still having a car you can’t sell.
How to Run a VIN on a VehicleSo, how do you run a VIN on a vehicle? How do you perform a VIN check on a car you’re looking to buy, maybe one you purchased, and you’re trying to get a title for?
Misconceptions About Online VIN ChecksNow, one of the misconceptions is that you can do this online. You’ll see things like Carfax or VIN Check or all these VIN lookups online that you can pay $10 or $15 and get a VIN report. The problem with that is it’s going to be about 40% accurate, and if you’re looking to get 100% guarantee to make sure that there are no liens on a vehicle, that it’s not stolen, that it’s not a parts-only vehicle, that there’s no title limitations like export only or salvage or other types of records, there’s only one method to get it 100%. And in most cases, it doesn’t cost any money; it just takes some time.
The Inconvenience of Accurate InformationThe sad part is it’s not going to be as convenient as just pushing a button on your computer and waiting for it to pop up on your screen. But the reason that convenience is there is because they don’t look for everything. In fact, if you look at the disclaimers on Carfax and other websites, it’ll tell you this isn’t 100% accurate and may be missing things. For example, CARFAX is not allowed by law to access all the lien information in all 50 states. Lien information is protected under federal law and legally cannot even be released to third parties unless it’s done in person.
The Three-Step Process to Run a Valid VIN CheckSo, how do you run a valid VIN check? Well, let’s take a look at the three-step process that anybody can do. You don’t have to be licensed, you don’t have to have any kind of certification, you don’t have to have any kind of authority or logins—anybody can do this for free. Some states might charge you five bucks to get some of the records.
Step One: Department of Motor Vehicles (DMV)You have to do three checks of information. Number one is you have to go to the Department of Motor Vehicles in person in the state where you’re located. So if you’re in, let’s say, Florida, you go to the DMV, any local office. Some states call their office a different thing; some states call it Secretary of State, like here in Illinois, and some states call it Department of Transportation, like in Pennsylvania. And you’re going to request a VIN history. Now, they’re going to make you sign a form. You can see on the screen an example of that form—it’s an information request form.
Legal Requirements and InconveniencesWhy do you have to go in person? Why do you have to sign a form? Well, here’s why: There is a federal law called the DPPA, and you can look it up, USC 2725. That makes it a statute prohibiting the disclosure of personal information without permission of the person or acceptable uses, and you have to be an authorized recipient. Well, to be an authorized recipient, they have to know who you are—you have to be there in person in front of them. They’re going to make you sign this form, and you’re going to have to certify that you’re not going to use it for any prohibited uses like stalking, identity theft, fraud—you’re using it to verify information, and that’s one of the permissible uses that allow you to get this detail.
What You’ll Learn at the DMVNow, I know it sounds inconvenient—you have to go to DMV; nobody likes to go there—but if you want 100% accurate information, it’s the only way to get it. Now, here’s the thing: They’re only going to be able to tell you about liens and prior owners. They’re not going to be able to tell you about salvage or even about stolen vehicles because stolen vehicles’ information is kept in a separate record system with law enforcement under the NCIC (National Crime Information Computer).
Step Two: Local Law EnforcementHere’s the thing: Some states at the DMV will log into the National Crime Information Center and get stolen car information occasionally. They may not do it every single day; they may do it once a month, once a quarter, or twice a year. So, you run the risk if you just rely on the DMV under this information request that you might not get stolen information.
The Risk of Relying on the DMV AloneWe get over a thousand phone calls a day in our office. Very often, we get calls from people who say, “Hey, I ran a VIN check; I even went to the DMV. I found out later my car was stolen because the DMV doesn’t have stolen information.” How do you get stolen car information? Well, what you do is now you leave the DMV, and you go to a local law enforcement office—Police Department, Sheriff’s Office, State Patrol, anybody with a badge and a gun. Same thing—you have to go in person with your photo ID and tell them the VIN number. They will look it up.
The Importance of Going In Person to Law EnforcementThe reason you have to go in person to the police department is that if the car does come back stolen, they want to know who you are so they can find out where the car is. They don’t do it by phone because if you call them up and say, “Hey, is this car stolen, VIN number 1234,” if it is stolen, they say, “Yeah, it’s stolen,” you can just hang up, and now they don’t know who you are or where the car is. They don’t want that—you have to go in person. They may also make you sign a form.
Get It in WritingNow, here’s an important thing: If you go to the DMV or the Police Department, whatever they tell you, get it in writing—get a printout. Because you don’t want to go back later and they say, “Oh no, there is something on this car,” and you can’t say, “Well, Joe Schmo told me two months ago that it was clear.” You want to get it in writing because sometimes they may have wrong information verbally.
Step Three: National Motor Vehicle Title Information System (NMVTIS)The last thing you need to do is check with the NMVTIS (National Motor Vehicle Title Information System). This system has information about flood cars, salvage cars, parts-only cars, and export-only cars.
Why NMVTIS Is ImportantNow, you might think, “Well, gee, can’t I get that from the DMV?” Not always. The DMV doesn’t always have the information. Again, we get thousands of calls a day. Many, many times people say, “I got a title from the DMV; they gave it to me—everything was good, right?” And then I found out later it was a junk VIN number—the VIN number had a salvage on it. Sometimes the DMV doesn’t always check in advance when they issue a title. People want a rush title—they want it on the spot—and the DMV gives it to you. And then later, if they find out there’s something wrong with it, they revoke it.
Why You Should Check All Three SourcesSo, you want to check the NMVTIS. If you go to their website, you can find out if they have a local branch you can go to. Sometimes they’ll give you a login where you can get it through their database. You want to check all three. If you don’t check all three, you run the risk of buying a car with a bad history or even not getting a title for a vehicle because of something or needing some requirement like an inspection. You want to know this information before you move forward.
The Danger of Taking the Easy Way OutDon’t try to take the easy way out. If you run a Carfax or a VIN check or any of these websites, you’re going to spend $10 or $15. It might seem like it’s easier than having to go someplace in person, get in a car, and drive down to the DMV, but you might save an hour’s worth of time, but you might get bad info. These Carfax-type reports are very misleading—very misleading about what they have—and you don’t want to be risking thousands of dollars on a vehicle on something that maybe you saved a little bit of time but found out later that the vehicle has a problem that wasn’t disclosed online.
Inquiry about Titles for Abandoned VehiclesOne of the most common questions that our sales staff gets on phone calls has to do with people inquiring about how to get a title for an abandoned vehicle. I have an abandoned vehicle I need to get a title for. Now many of these calls the vehicle is really not abandoned. It’s something that they bought on Craigslist or Facebook and they’re just thinking that if they call it abandoned they can get a title for it.
Definition of Abandoned VehiclesIt’s very important to understand what the word abandoned means. An abandoned vehicle is a vehicle that literally has been abandoned and has been not claimed and discarded by the owner. The problem with that is in most states that does not allow the person who finds it to keep it. It’s not like Finders Keepers.
Oregon State Law on Abandoned VehiclesWe’re going to take a look at a particular set of laws. This happens to be from the state of Oregon, but most states have exactly the same law, so it’s very important to look at the wording of how abandon works. Be aware that even though an abandoned vehicle is not a way to get a title, there are many other great ways to get a title. But first, we’re going to look at abandon to see what it means for your scenario. So let’s dive in deep and look in detail at how this works.
Packet Information on Abandoned VehiclesSo this is the packet. It says right here the packet contains information about some situations where ownership of a vehicle may be transferable through a possessory lien. Separate from that, a separate bullet point says information on abandoned vehicles. So let’s jump down to the abandoned vehicle part first and then we’ll look at the other parts second.
Legal Interest in Abandoned VehiclesHere is very specific language: titling a previously abandoned vehicle. To obtain a title, a person must have acquired a legal interest in the vehicle. In most cases, people do this through some sort of purchase or financial agreement like you bought it from a dealership and they gave you a contract, or you need to go through some form of legal process. It says right here legal process, and you see on our website, court order title is a legal process that you can use to get a title for an abandoned vehicle.
Process for Abandoned Vehicles on Private PropertyKey sentence right here: if you don’t see anything else, one cannot simply attain title because the vehicle was left on one’s property. That right there tells you all you need to know. You can’t simply just magically say I want a title because it was left on my property. You have to go through some form of legal process that’s outside the scope of the DMV and has to go through some other legal authority. We’ll talk about that, but that’s a good starting point to know what you can and can’t do.
Disposal of Abandoned Vehicles by AuthoritiesSo here are the provisions for disposal of abandoned vehicles. For vehicles abandoned on highway public or private property, the law allows for an appropriate authority to remove the vehicle. Authority meaning state, county, or city, so the government removes the vehicle. So that means if you call it abandoned, you have to call the government and tell them to come get it, and they auction it off.
Towing Abandoned Vehicles from Private PropertyYou can also, if a person is the owner of a private property on which a vehicle has been abandoned, you may have a tower tow the vehicle. First, you have to put a note on the vehicle saying if it’s not removed within 72 hours, the vehicle may be removed. Then you have to fill out a form that has the description of the vehicle, location of the property, and you have to submit that to the DMV. Also, the DMV does not provide you with a form. The information needed can be written on a piece of paper. Right, so they don’t give you any blank forms for this.
After the Vehicle is TowedSo what happens after it’s towed away? Well, after it’s towed away, in cases of abandoned vehicles, the DMV must receive satisfactory evidence of the facts applying for the title for an abandoned vehicle sold by an authority. Remember where we talked about the authority will come get the vehicle: state, county, or city.
Applying for a TitleThe purchaser of that from the auction may apply for a title, and the bill of sale must describe the vehicle, identify the statutes under which the sale was held. So you can’t just get a bill of sale from the police and say, “Hey, I bought it, I want a title.” They have to describe under what legal authority that was done. Then to apply for a title, the purchaser must submit an application for title and a certificate of possessory lien forms, the one that covers your situation. Sounds kind of complicated, fully completed, signed by the authorized representative of the business claiming the lien.
Importance of Proper DocumentationApplication will be rejected if you submit one more than one form certifying foreclosure. So this is not a simple matter. You also need to keep records: signed copy of the original tow notification, repair order signed and dated copy of the claim of lien signed, and copy of the DMV certificate of possessory lien.
Misconceptions and Legal RequirementsRemember this doesn’t apply just for any old abandoned vehicle. You have to jump through a bunch of hoops. Here’s some questions that a lot of people ask that the DMV has taken upon themselves to put on this form. Am I required to contact the vehicle owner of the vehicle I’m getting a title for? Depends on the type of lien that’s being foreclosed. If you’re not sure, you may want to get legal advice from an attorney. That’s how complicated it is.
Legal Obligations and PenaltiesYou have to follow all the rules. You have to state under penalty of perjury, “I foreclose the lien in accordance with provisions of ORS 8712 and ORS 176, etc.” If you notice, it says buyer’s name and date of auction required. You can’t just assign it to anybody you want. You have to hold it out for people to bid on it so that the proper amount of money is obtained for the vehicle.
Possessory Lien ProcessRemember this possessory lien is the result of an abandoned vehicle being removed from private property at the request of the owner. It’s not just the owner does this, it’s the towing company or the state does this. In addition, the seller, if you’re not a manufacturer, licensed dealer, or registered tower, you have to get a surety bond of $220,000 in order to file with the DMV for this auction. So it’s not just an automatic thing.
Compliance and PenaltiesYou also have to abide by all the rules. It’s a Class A misdemeanor to misrepresent anything, punishable by jail up to a year or a $6,000 fine. On the last page, it reminds you that foreclosure of a lien is a result of a vehicle being towed at the request of an authority: state police, sheriff, department of transportation. It talks about that it has to be done under a regulatory authority.
Alternative Processes for Obtaining TitlesSo the short answer is, if you call something abandoned, it triggers a whole set of requirements. If you go through another process like a court order title or a bonded title, it’s much simpler. You don’t want to automatically claim abandoned unless literally the car dropped out of nowhere and you don’t know where it came from. Then maybe it might be abandoned, but it also limits your chances of becoming the owner of the vehicle.
Tell us about your vehicle and we'll direct you to a title recovery method that matches your scenario.
"*" indicates required fields
