What is the best way to get a title for a vehicle in 2023? Several times per year, we like to update our clients and readers on the changing landscape of vehicle titles, updates to title laws, and what to expect from the DMV.
First, let’s look at what is generally required to transfer a vehicle title using the state of Michigan as an example. To transfer a title, you’ll need the following documents:
While each state has its own requirements, all states will look for these documents when it’s time to transfer the title. However, oftentimes the original certificate of title is missing and is the whole reason for you to be looking into other title methods. So if you purchase a vehicle and didn’t get a title, the title was lost, or you only have a bill of sale, what do you do?
One of the most common methods to get a vehicle title with a bill of sale is to use what’s known as the Vermont loophole, or the Vermont registration process. This method has been around for decades, does it still work in 2023? Technically, yes it’s something that can be done. It’s been used by people all over the country and featured in various automotive publications as a valid method to get a vehicle title.
Vermont is a non-titling district for vehicles that are 15 years old or older. Instead, Vermont issues a registration as their version of a title for a vehicle of this age that can be obtained by both residents and non-residents of the state. Once you receive the Vermont registration, you present it to your state’s DMV as proof of ownership and exchange it for a title certificate.
So on the surface, it’s a method to get a title for an older vehicle that lacks proper ownership documentation. However, it may not be the best method to use in all situations.
If you use this process, you’ll have to pay sales tax to Vermont based on the value of your vehicle. It’s not based on what you paid for it or what you think it’s worth, it’s based on the NADA book value of the vehicle. And at a 6% sales tax, in many cases, this ends up being many hundreds of dollars being paid to Vermont for sales tax. This cost is in addition to the registration fee from Vermont and any other fees from your state DMV.
While this process produces a valid ownership document, some states are starting to push back on allowing it. For example, in Florida, FLHSMV released an official notice to be on the lookout for fraudulent Vermont registrations. While the notice doesn’t outright say they won’t accept a Vermont registration in lieu of an original title certificate, it makes it very clear that the process will be heavily scrutinized to avoid fraudulent applications.
Since this is not a direct path to ownership, the timeline is not always straightforward. If all parts of the application process are done correctly and neatly, it’ll take at least 7-10 business days to get your documents from Vermont. Once that has been received, it can take that long for your home DMV to get an appointment, process the documents, and print you a new title.
The bonded title process is a very valuable and misunderstood method of title recovery. The bonded title process involves purchasing a surety bond, signing an affidavit, and submitting that to your DMV in exchange for a title. So, what’s so misunderstood about this process?
Most states require the surety bond value to be 1.5x the value of the vehicle, many see this as having to pay 1.5x the value of the vehicle to get a title, but that’s not the case. The value of the surety bond should equal 1.5x the value of the vehicle, but you’re only required to pay a fraction of that upfront. Most surety bonds for average-valued vehicles are around $100-$150 to purchase for your title. The remaining amount of the bond is only required to be paid if there is a discrepancy in ownership after the title is issued. So with the cost of the bond and your state’s fees and taxes, this method often is more cost-effective than the Vermont loophole. Additionally, it’s a method that your state will prefer.
A bonded title is a title brand that stays on your vehicle for 2-3 years, depending on your state. Many times this is misunderstood, thinking that it takes 2-3 years to get the title. Once you are issued a bonded title, the title will be labeled “BONDED” for 2-3 years before it is removed for good. A bonded title brand is not a permanent brand, it can eventually be turned into a clean title.
While this is a valuable and widely accepted method of title recovery, not all states accept bonded titles. So if you’re in a state that doesn’t accept bonded titles, and the Vermont loophole isn’t an option for your situation, how do you get a title with limited ownership?
When all else fails, or your state doesn’t accept bonded titles, a court-ordered title process may be your best option. If the original title has been lost, destroyed, stolen, or never received from the prior owner in the first place, you can go through the court system to have a judge legally declare you the owner of the vehicle. This process bypasses the DMV initially and takes the case straight to the courts. Even if they wanted to, the DMV can’t issue you a title without proper proof of ownership, it’s against government policies. However, the court can do it and a court order can bypass any DMV policies.
Most of the time, if you have all of your ducks in a row, meaning that the vehicle isn’t stolen, there are no liens, no permanent title brands, etc. the court-ordered title process is an extremely valuable and official method of getting a vehicle title without proper ownership proof. The court is here to hear your case and can make the decision to overrule DMV requirements as they see fit. There are 3,611 counties in the US and each of these counties has its own court-ordered title process that can be done to issue a vehicle title.
If you’re missing proper proof of ownership, the best way to get a title is through the court-ordered title process. While other methods also work, the court-ordered title process is the most direct and official way to get a new title issued in your name if you’re missing the old title.
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Order Vermont Title LoopholeOrder Deceased Owner Title TransferOrder Bonded Title ProcessOrder Abandoned Vehicle ProcessOrder Prior Owner ContactOrder Lien Release Request LetterPGlmcmFtZSBzcmM9Imh0dHBzOi8vYXBwLmFjdWl0eXNjaGVkdWxpbmcuY29tL3NjaGVkdWxlLnBocD9vd25lcj0xOTQ4ODEyNiZhcHBvaW50bWVudFR5cGU9MjMwNjY0MTAiIHRpdGxlPSJTY2hlZHVsZSBBcHBvaW50bWVudCIgd2lkdGg9IjEwMCUiIGhlaWdodD0iODAwIiBmcmFtZUJvcmRlcj0iMCI+PC9pZnJhbWU+PHNjcmlwdCBzcmM9Imh0dHBzOi8vZW1iZWQuYWN1aXR5c2NoZWR1bGluZy5jb20vanMvZW1iZWQuanMiIHR5cGU9InRleHQvamF2YXNjcmlwdCI+PC9zY3JpcHQ+
So the good news is that the hurricanes that have hit Florida are largely over and a lot of rebuilding is happening. The bad news is that we’re already starting to see flood-damaged vehicles show up in the salvage auction pipelines.
A lot of these vehicles are being sold with junk titles, non-repairable titles, or certificates of destruction. And if you don’t know what you’re looking at, you can quickly get jammed up with one of these destruction-branded vehicles.
Just because the title designates the vehicle as non-repairable, don’t take that as a challenge for you to repair it anyways. If you see a vehicle with a certificate of destruction, don’t assume you can do something to save it from being destroyed. These are permanent title brands that remove these vehicles from the road. A lot of these vehicles look perfectly fine with no obvious physical damage. You might be able to see evidence of flood damage, but oftentimes they appear to be running and drivable, with maybe a few minor repairs needed.
The problem is, it doesn’t matter how minimal the repairs are. If the vehicle has been reported as non-repairable, junk, or given a certificate of destruction, the VIN is now canceled. A VIN is canceled when it is issued one of these destruction-brand titles, it also is recorded in the National Motor Vehicle Title Information System (NMVTIS) which tells every state DMV that this particular VIN is never again allowed to be issued a title.
We’re already starting to see dozens of these vehicles show up in auctions from Copart and IAA. Sometimes buyers know that they’re being sold a vehicle title with a non-repairable title brand, but sometimes they don’t know. And if you don’t know, you could get stuck with a vehicle you paid good money for that you can never put on the road. Make sure before you buy a vehicle you verify that it’s not recorded in the NMVTIS database with a certificate of destruction or non-repairable title. If it has a salvage title, you can do something with that, but not for a certificate of destruction, non-repairable, junk, or parts title brand no matter how much you fix it up.
So be aware of these vehicles as you’re navigating the used car market and insurance auctions. If you’re buying through a broken, make sure that you understand what the broker is disclosing about the vehicle so you don’t get a vehicle that’s worthless and can’t go on the road.
Here’s another side effect of the crazy auto market with prices skyrocketing on used cars. One of the ways fraudsters are taking advantage of this is they buy high-mileage used cars for cheap and roll back the odometer so it looks like the car has less mileage than it shows. With the lower represented mileage, the fraudsters can resell the car at a much higher price to an innocent buyer. Low-mileage used vehicles are becoming increasingly hard to come by, and these fraudsters are banking on the desperation of buyers.
In this article from KSLTV, an investigator showed an example of how he rolled back the odometer of a vehicle from 150,000 to 50,000 with a cheap $300 tool. Now with the assumption of lower miles, you have a vehicle that may be worth $10,000, whereas it is actually worth around $3,000. So the fraudsters can sell the vehicle for much higher and the buyer thinks they’re getting a great deal when really they’re just buying a high-mileage car with a bunch of potential problems.
The high value of used cars skyrocketing has created this problem and the digital odometers make it even worse. Odometers used to be actual wheels inside of the dashboard that turned the numbers mechanically. Now, odometers are all digital so you can actually reprogram them to change the mileage.
The problem comes in for the buyer when it’s time to register and title the vehicle. When a vehicle is titled and registered, the mileage is recorded in the title information system. If you go to register and title your vehicle, but the mileage is lower than previously recorded, this will raise red flags in the system for true mileage unknown (TMU). True mileage unknown is a big deal. If the mileage is unknown, then there is no value because a TMU car can have any amount of miles.
Don’t take the word of the seller or what you see on the odometer, do a title history check to make sure that the vehicle has the mileage it’s supposed to. Don’t get stuck with a car that you think has low mileage and no problems, but has really been through the wringer and has significantly more miles on it than what was represented.
The unprecedented surge in used car prices has given rise to an alarming trend in the automotive market—odometer fraud. As consumers grapple with the challenge of finding affordable vehicles with low mileage, fraudsters are exploiting the situation by purchasing high-mileage cars at a bargain and manipulating the odometer readings to inflate the vehicle’s perceived value. In this blog post, we delve into the details of this deceptive practice and discuss how buyers can protect themselves from falling victim to odometer fraud.
The current auto market has witnessed a tumultuous journey marked by soaring prices, especially in the used car segment. As consumers face the daunting task of securing reasonably priced vehicles with low mileage, opportunistic criminals are capitalizing on the situation. One method they employ involves acquiring high-mileage cars at a lower cost and then tampering with the odometer to present a false narrative of the vehicle’s condition.
Unlike traditional odometers with physical wheels that displayed mileage, modern vehicles are equipped with digital odometers. While these digital displays enhance convenience, they also create an avenue for fraudsters to exploit. By using inexpensive odometer correction tools—priced at around $300—hackers can connect to the car’s computer system and roll back the recorded mileage.
Investigators have demonstrated the ease with which these frauds can occur. In one case, a vehicle with 150,000 miles on the odometer was rolled back to 50,000 miles. The consequence is a deceptive increase in the vehicle’s market value. What seems like a good deal at $6,000 or $7,000 might actually be a vehicle plagued with issues, originally valued at $2,000 or $3,000 due to its true high mileage.
The real challenge arises when buyers, unaware of the manipulated mileage, proceed to register the vehicle. The prior, unaltered mileage is recorded in the title history. In the event of a dispute or conflict, the title may be marked as “TMU” or True Mileage Unknown. This designation can render the vehicle virtually worthless, as it implies that the car’s actual mileage is uncertain and could be significantly higher than what is indicated.
To shield yourself from the perils of odometer fraud, it is imperative not to rely solely on the seller’s word or the information displayed on the vehicle. Performing a thorough title history check is a crucial step in ensuring that the odometer reading is accurate. By verifying the vehicle’s mileage against its documented history, you can avoid the pitfalls of purchasing a seemingly low-mileage car that has, in reality, endured extensive wear and tear.
As the used car market continues to navigate its current challenges, consumers must remain vigilant against deceptive practices like odometer fraud. Staying informed, conducting due diligence, and leveraging title history checks can empower buyers to make well-informed decisions and avoid the pitfalls of a seemingly good deal turning into a costly nightmare.
Car titles serve as the legal cornerstone of vehicle ownership, issued exclusively by government agencies to establish proof of ownership. In this comprehensive guide, we’ll explore the intricacies of car titles, shed light on their critical components, and address potential challenges that may arise, such as lost or invalid titles.
A car title is a government-issued legal document that verifies ownership of a vehicle. This document is not a commodity available for purchase or download from the internet; it is strictly governed by the state where the vehicle is registered. Understanding its components and the information it holds is crucial for any vehicle owner.
Car titles come in various designs and formats, each unique to the issuing state. A representative example from Pennsylvania showcases security features like scrollwork and watermarks, akin to those found on currency. Key information includes the Vehicle Identification Number (VIN), year, make, and model of the vehicle, along with the owner’s name and address.
Encountering a situation where a title is lost, stolen, or deemed invalid is not uncommon. In such cases, the steps to address the problem depend on whether you are the legal owner or not.
Liens on vehicles come in two forms: financing liens and mechanics liens. Financing liens, resulting from borrowed money against the car, persist until the lien holder submits a specific document to the titling authority. Mechanics liens, a privilege granted to automotive facilities, allow the facility to take ownership of a vehicle left for repairs, storage, or towing until payment is received. Non-automotive entities can utilize civil liens to assert a claim against a vehicle.
While liens can represent financial obligations, they can also work in your favor. Properly addressing and navigating liens ensures clear ownership and minimizes the risk of disputes or challenges to your vehicle’s ownership.
Understanding the nuances of car titles and addressing common problems empowers vehicle owners to navigate the complexities of vehicle ownership confidently. Whether dealing with lost titles, liens, or other challenges, being informed and aware ensures a smoother journey through the intricate landscape of car titles. For more detailed information and resources, explore our website, where you’ll find additional insights and guidance on managing car title-related matters.
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