Kentucky Red Titles: What Is It?

What is a Kentucky Red Title?
All right, so what is a Kentucky red title? A lot of people are inquiring about this. They got some piece of paper that says title on it from the state of Kentucky, and they’re thinking I’m good to go. These are not real titles. These are parts-only junk vehicles that, of all the 50 states, one state has ignored the federal guidelines on not allowing these vehicles on the road and given a piece of paper for their state only. In fact, even in their state, it doesn’t work in every County.

Tennessee’s Stance on Kentucky Red Titles
Here’s a web page from the state of Tennessee, which is right next door, talking about Kentucky red titles. Kentucky red titles are the equivalent of a non-reparable certificate. Vehicles that are issued Kentucky red titles are damaged beyond repair and would not meet safety standards. Now you might say, hey, this car is not damaged, doesn’t have anything wrong with it. Well, it might have been repaired, or it might have been a flood car, or it might have been a recovered theft. Either way, the insurance company said don’t go back on the road.

Registration Issues and Legal Implications
A vehicle that has been issued a Kentucky red title may not be registered in Tennessee or any other state for that matter, and many of them can’t even be registered in Kentucky anymore. So if you’re getting a vehicle with a Kentucky red title, look at it as you would any other type of junk parts-only non-reparable certificate of destruction vehicle. It’s not going to fly. The federal law says that states are not allowed to put them on the road. The insurance company that paid the claim put it into the National Motor Vehicle Title Information System (NMVTIS) and blocked it in all 50 states. It cannot be undone.

Advice for Kentucky Red Title Holders
So it’s not the same as a regular title. You can’t switch it to a rebuilt, you can’t switch it to a salvage, you can’t undo it. It’s permanent. So either don’t buy it, or if you did already buy it, look for your best way out of that trap that you’re in.

Title Consulting Services
We also have title consulting. If you click the link below, we can talk about a specific vehicle and also look it up to make sure that it really is a junk vehicle or parts-only before you take drastic action.

DON’T File For An Abandoned Vehicle Title

So you have a vehicle that you’ve purchased or maybe was given to you and somehow you have a title problem. You can’t get a title, so how do you solve that problem? Well, many times the person will just think, I’ll just file for an abandoned vehicle, thinking that an abandoned vehicle is Finders Keepers—you get to have a title. It’s not how it works. We’re going to take a look at abandoned vehicles, discarded vehicles, what the law says, what you can do and what you can’t do, and possibly what are solutions for you to get a title when you have a vehicle that doesn’t have the right paperwork.

Misconceptions about Abandoned Vehicles
First of all, let’s clear up a common misconception: an abandoned vehicle is not something that anybody can just claim. If you see a car and you want to claim it, you can’t just say, well, it’s abandoned, I get to keep it. Like I said, Finders Keepers does not apply to abandoned vehicles. The laws in every state have very specific chapters and statutes for what they call discarded vehicles, what you can do, and what you can’t do.

Definition of Abandoned Vehicle
First of all, let’s take a look at what they say is an abandoned vehicle. This is the definition. Now, this is from the state of Oregon, but many states have the same rules because it comes from federal statutes. Abandoned vehicle definition means any vehicle that has been deserted or relinquished without a claim of ownership. Without a claim of ownership—that’s important because if you want to become the owner, you have to have a claim of ownership. If you claim ownership, now it’s not abandoned. If you say that it’s abandoned, you’re also saying you don’t have a claim of ownership. So it’s like a catch-22, right? So whatever you do, don’t file or define something as abandoned if you don’t want to have a claim of ownership because you’re going to waive your rights.

Additional Conditions for Abandoned Vehicles
In addition to that, it has one or more of the following conditions: has expired registration, appears to be inoperative or disabled, and appears to be wrecked, dismantled, or junked. So abandoned doesn’t just mean that no one’s claiming ownership; it has to be in a physical condition that’s also low.

Investigation Process for Abandoned Vehicles
So what happens if somebody says something is abandoned? Well, they have to do an investigation. The duty of the police department whenever a vehicle is considered abandoned is to make an investigation to discover the owner of the vehicle and contact that person. Written notice or certified mail—the police do this, not you. If the owner of the vehicle is not found, place a notice on the vehicle where it can be easily seen. The notice says it’s in violation of this chapter and within 5 days it must be removed. If it’s not, then what happens? Then it gets towed. It gets towed by a licensed towing company designated by the police department. It has to be a licensed official towing company. They just can’t go roving around and say, hey, I want to tow that vehicle. It has to be tasked and it has to be dispatched by the police department, can be towed upon the order of a city officer or employee, taken to a storage area designated by the city. That doesn’t mean your backyard; it has to be designated by the city.

Disposition of the Vehicle
Then what they can do, after they rack up storage fees and send out notices, is they can auction the car off. Disposition of the vehicle: the towing company can sell or dispose of the vehicle. The towing company can send written notice. So a lot of people think, well, I’ll just do that. I’ll send out a certified letter, if I don’t hear back, I get to keep the car. It’s not how it works. Abandoned vehicles are not Finders Keepers. Remember that.

Common Queries about Abandoned Vehicles
Now, there may be a few jurisdictions, some cities and counties, that have other ways of doing this, but even if they do, it’s not the best way to go. More than likely, the first question we ask when somebody calls up and says, hey, I have an abandoned vehicle, is our sales staff will ask, what did it just show up on your lot and somebody just brought it there? You don’t know where it came from? No, I bought it on eBay—that’s not abandoned. Oh, no, some guy gave it to me in exchange for, you know, cleaning out his gutters—that’s not abandoned. It was given to you, and that’s a good thing. If it was abandoned, remember what abandon means.

Clarification on Ownership
First section: definition of abandon means abandoned vehicle means any vehicle relinquished claim of ownership. You don’t want to relinquish claim of ownership if you want a title. So if somebody gave it to you, they sold it to you, you bought it off Craigslist, you bought it from a barn—it’s not abandoned. You own it. You just have to get a title, right? You have to get one of these, a document. The way to do it is not through the abandoned process.

Bonded Title Solution
So that’s the bad news. How do you do it? Well, if you’re in a bonded title state, get a surety bond, attach it to an application, file it with the state, get a bonded title. Easy to do. Most surety bonds are going to cost you $100. Don’t get rattled by reading something where you have to pay two times the value of the vehicle—that’s just what the bond value is set at, but the bond itself will cost you $100. Check it out at probonds.com, pbsrbonds.com. Put in the value of the vehicle, hit enter, it’ll tell you the price—it’ll probably be 100 bucks for most vehicles if it’s worth 10,000 or less.

Court Order Title Solution
What else can you do? You can also do a court order title. You file a petition in the county court where you live. The judge will check out the vehicle, make sure it’s not stolen, make sure there’s no liens on it, they’ll give you a judgment of ownership. You bring that to the DMV, slap it on the counter, and they give you a title. It’s not like a big Law and Order Jack McCoy court case. It’s an administrative proceeding; it’s easier than dealing with the DMV, in fact.

Warning Against Other Methods
So forget about abandoned, forget about filing a lien against a vehicle, because unless you have a signed authorization to do work on a vehicle and you have a licensed repair shop, you can’t file a lien. And even if you do have a licensed repair shop, they know that mechanic’s liens are scams. Most people that file mechanic’s liens are not really a repair shop that had authorization from the owner, so they’re going to audit it, and if they find anything wrong, they’ll kick that out.

Conclusion
So abandoned vehicles—don’t go there. It’s not going to work out for you. It’s the worst way to get a title. Even if you do have some narrow loophole in your county or your city, it’s the worst way to get a title. It’s going to take the longest; it has the most opportunity for the government to come snatch that car away from you because you have to say there’s no claim on it. And if that person has back taxes, now the city will claim it. If they didn’t pay their registration, the city will claim it. You don’t want to do abandoned vehicle, believe me. You want to look at one of the other bonded title or court order title methods. It’ll work out way better for you.

Import Vehicle Title Problems

Importing and Titling Vehicles in Rhode Island
So can you title an imported vehicle? This new controversy in the state of Rhode Island gives you some insight as to what are the realities of titling a vehicle that’s been imported.

The Process of Importing a Vehicle
There’s two parts of an import vehicle titling. First, you have to get the car physically imported to the US. Now that doesn’t mean just physically brought here because a lot of times vehicles are brought into the US without being imported. How does that work? Well, if you’re going on vacation from Canada, Mexico, or even Europe, you can bring a car here, drive it around. It does not have to go through import, right? You’re not making it like a citizen, a domicile of the US. You’re just bringing it here to drive around and then you leave. But if you want it to be here for titling or ownership purposes, you actually have to go through the importation process.

Exemptions for Older Vehicles
Where it gets tricky with these older vehicles: if the vehicle’s older than 25 years old, you can skip some of the inspections at the import process like EPA and some DOT stuff. The problem is that doesn’t make it legal to title or register in all 50 states. Many states have requirements that the car has to have met the manufacturing criteria for that year that it was built in the US.

The Case of Japanese Mini Trucks
So these you see on the screen, these little Kai Japanese mini trucks, a lot of people like to buy these because they’re cheap, they’re cute, they can drive around town and they think they’re going to be clever because they’re more than 25 years old. The problem is most states don’t allow them on the road because they’re unsafe. They weren’t built to be on the road; they’re built for farm trucks or driving around little towns in Japan. People think, “Well, I can get an exemption for importing it, so it must be good.” Well, it’s good to import it, but it doesn’t mean that your state will allow you to title it.

State-Specific Requirements
And that goes for any imported car. You have to make sure that it’s legal to meet the standards of titling in your state. It probably has to go through inspection. And if you inspect it in your state and it doesn’t pass because the bumper is too low, it doesn’t have airbags, it doesn’t have a rear camera, it doesn’t have anti-lock brakes, any of the criteria that needed for that year have to be met for that vehicle. And you might say, “Well, gee, if I had a 1969 Camaro, it doesn’t have airbags.” Well, in 1969, in the US, that was not a requirement. So keeping that in mind, if you’re going to import a vehicle, make sure that you’re certain that the criteria and construction of that vehicle meets the standards of being eligible to title and register in your state.

Changing Regulations and Compliance
Also be aware that many states are changing the rules. This is a good example right here. If you look at what it says on the screenshot, it says owners must turn in registration to DMV. What does that mean? Well, in Rhode Island, there were 30 of these little Kai vehicles that were previously titled and Rhode Island realized, “No, wait a minute, that was a mistake. These cars should not be on our roads. They’re unsafe.” So they’re pulling the registration. So anytime you import a vehicle that was not originally manufactured for the US market, be aware that it could be pulled at a later date.

Seeking Professional Guidance
If you do have questions about registering, importing, or titling a non-US vehicle, you can click the link below and arrange a consultation.

Certificate Of Destruction Non Repairable Junk Titles

Buying Parts-Only Vehicles
You see a lot of these vehicles being sold at certain salvage auctions, Copart, or IAA, and it says parts only on the listing. Sometimes it’ll say parts only on the title or on your paperwork. What can you do with this vehicle? What’s going on with parts only?

Understanding “Parts Only” Designation
What parts only means is that the insurance company or the seller of the vehicle has determined that they don’t want this to be sold as an actual vehicle; they want it to be sold as, guess what, parts only. So what you’re supposed to do is buy this vehicle and take it apart. If you look at this vehicle, you have a hood, you have wheels, you have glass, and presumably you have an engine, transmission, drive line, interior parts, computers, and airbags. If you add all that up, it’s probably worth more than the car. Now you’d have the labor cost and the inconvenience of having to dismantle the vehicle, but it’s worth more. And that’s where a lot of these buyers at Copart and IAA are making their fortunes by taking vehicles apart.

What If You Already Bought a “Parts Only” Vehicle?
But what if you come across one or you already bought one that’s parts only? What can you do? Well, you have to be very careful because if it is listed as parts-only and it’s registered in the United States title system as a parts-only vehicle, all 50 states are aware of it. If you try to get a title, they’ll find out about it, and they won’t issue a title for a parts-only vehicle.

Exporting a “Parts Only” Vehicle
Can you export it? Well, maybe you can, but technically, the export rules for CBP (Customs and Border Protection) require that a parts-only vehicle be dismantled into major component parts in order to be shipped out of the country. So if you put a vehicle in your container and you don’t have a title for it, or if the title is parts only, they’re going to want to make sure that vehicle is dismantled. It can’t go out in one piece. Now, we do have a lot of export clients that are finding that that’s not 100% enforced, but if it is enforced and you now have your vehicle in a container, now you have to take that container out of the bonding area, dismantle it, put it back in the container, and ship it. And that could cost a lot of money, and more and more sections of CBP—Savannah, Houston, and Port Elizabeth—are starting to be more cognizant of this and crack down on it.

Reconstructing a “Parts Only” Vehicle
So what if you want to put it back on the road? Well, there are a few ways you can do that, and we’ll talk about it briefly in this video. But if you want more information, you can click the link below, and you can even schedule a live one-on-one consultation with a title agent (myself) to go over the options for your particular vehicle. Make sure you have your VIN number handy if you have a consultation. But one of the things you can do is reconstruct it into an assembled vehicle or a kit car. You can also use it as a major component part for another vehicle that does not have a parts-only designation.

Risks of Title Washing
But beware of schemes that claim to flip the car among a few different states very quickly. If you catch one of them off guard, they’ll give you a title that doesn’t say parts only. Because there’s a few schemes you can do to flip it around five or six different states in a very particular order very quickly, they won’t catch it right away, and they’ll give you a title. The problem is that eventually that title will be revoked when they find out. And if it’s found that you did that flipping scheme (it’s called title washing), it’s a federal felony. And if they see that you’ve done that, they can actually prosecute you for it. So be aware that some people try to do that. It’s less effective now than it used to be because most of the states are now all digital. But if you do get tempted to do that, or if somebody offers to do that for you, be aware that it could get you into some big trouble.

Legal Advice and Conclusion
So you may want to avoid that, and if you do sell a vehicle that was Parts only under a clean title, now that’s also a misrepresentation. So if you’re going to do something like that, get good legal advice from an attorney. So if the guys with the badges and the three letters on their coat show up at your door, you can say, “My attorney told me it’s okay,” because if not, you’re going to get into trouble. Parts-only vehicles are probably better off left alone, no matter how cheap they are, because by the time you go through the trouble of fixing them and doing everything, you’re not going to make that much money. You’ll make more money if you just take it apart and sell all the parts on Craigslist. Again, if you do want more information on parts-only vehicles, you can click the link below to get some written information or to schedule a consultation with a certified title agent.

Fake Car Title Agent Arrested For Fraud

Here’s another example of how vehicle titles are ripe for fraud: anytime you have somebody who’s trying to do something that’s not quite legal, or a loophole or some kind of backdoor method, it’s going to come back and bite you.

The fraudulent title scam
Here’s a story about a clerk at a title agency that was arrested for processing $3 million of fraudulent titles. What she was doing was filing fake paperwork to get titles for vehicles that some of her partners in crime allegedly were getting for cars that they weren’t supposed to have. They were buying these cars without titles; they were getting these cars with no titles, and they were having this title scam to get them titles from the DMV official titles that were improper.

The Value of a Vehicle Title
And you know, getting a title for a vehicle, you know it’s a certificate; it’s a document, but it’s more than just a piece of paper; it’s representing the value of that vehicle, so even if you have a vehicle that’s worth $10,000, that title is like a $10,000 check. Whoever has it in their name owns that vehicle now, so if you can find a way to scam your way of getting a title, you now have a free car, and if it’s done improperly, eventually it’s going to catch up to you, and this is a perfectly good example.

The Consequences of the Scam
This scam allegedly went on for years. Um, this person now has 36 felony charges, a multi-million dollar scheme, dozens of stolen vehicles, and what’s going to happen is that all those titles will be revoked. Anyone else involved in the process is going to be prosecuted.

The Importance of Legal Title Acquisition
So make sure if you’re getting a title for a vehicle, you’re using a proper method of getting a title. You’re not doing something illegal, and if somebody else is doing the method for you, make sure you understand it. Make sure you know what’s being done and if it’s legal. A lot of methods of getting a title are illegal, and it’s going to eventually, um, bite you in the foot if it turns out that you got a title under those circumstances.

Final Advice
So when it happens, people are being prosecuted for it. Make sure you’re aware of how your title’s being obtained, and if it’s your car, you deserve to have a title. There’s a way to do it. It might take a little more work to do it the right way, but you’re not going to run into legal or financial problems down the road.