You know vehicle inspections and VIN verifications and DMV procedures may seem bureaucratic but here’s one of the reasons why it’s necessary. In Miami, there was a group of people who were stealing vehicles and using some DMV paperwork loopholes to try to get away with auto theft. They arrested many people for stealing a million dollars worth of cars in Miami. How were they doing it?
Well, this system was organized criminals that would rent cars out or get cars by other means meaning that they would somehow get possession of the car. Now possession of the car isn’t enough to get ownership. If you rent a car from Hertz or Avis or Enterprise it doesn’t mean you own it. If you take a car for a test drive from a dealership, you don’t own it. But if you can get a car in your possession or borrow from somebody then you have the chance to do what’s called re-vinning. Where you take off the VIN that’s on the dashboard and put on another VIN that’s not of the vehicle that you rented and then you try to resell them. Some they sold through a dealership. Some they tried to export. Now the problem with that is, the VIN that’s on the dashboard isn’t the only VIN placement on the car on some cars there are 12-14 different VIN placements scattered around the car. Many of them are hidden and only a police officer or the police department knows where they are. So you can’t replace them all anyways.
These stolen cars had falsified titles and they were sold to dealerships like AutoNation. AutoNation sold some of these cars unknowingly, they didn’t do anything wrong, they got a legitimate title they bought them, and they ended up selling stolen cards which you have to buy back. According to the article.
You should be careful when you buy a car to double and triple check the paperwork and that might help. However, this paperwork was done pretty thoroughly. Matter of fact, a vehicle title is not something you can print up on a home computer or something that has a lot of features come from the DMV. So if the DMV issues a title with a VIN on it you might think that that’s legitimate. But you might want to look at some of the second or third VIN placements on the vehicle. Now the one on the dashboard is attached with a tamper-proof rivet. So in theory, you shouldn’t be able to take one off and put one on unless you tamper with those rivets. But some of the thieves know how to make the rivets look correct. So if you’re buying a high-end vehicle and the person you’re buying it from maybe has some red flags maybe their name doesn’t show up on the title maybe the owner doesn’t appear to be, normal of how owners should be, maybe there’s no lien on a vehicle that’s one or two years old and why is the person selling it? You might want to look at some of the other VIN placements. If you look underneath, some of the VINs are accessible to civilians and you can find out if that number has been changed. Another thing you can do is if you plug in an OBD, vehicle evaluator, or diagnostic tool into the computer system the actual VIN of the vehicle will show up on the computer screen. So if you pull up on the navigation screen or in the infotainment system or plug in a diagnostic tool you can see the actual VIN of that vehicle. If it doesn’t match what is on the dash, that is a red flag. So this is a very good example of how sophisticated criminals are using the DMV system against itself to get titles for vehicles that they’ve stolen.
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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 here’s one of the most common questions that we get—a customer calls up and has a car that they did work on that they fixed up and they want to own the car. Maybe somebody gave it to them and they fixed it up. Maybe they repaired it for somebody and that person didn’t want the car anymore. Maybe they repaired it and fixed it, but the owner didn’t pay the bill. They didn’t want to pay for the repairs and just said to keep the car. Maybe you’re an auto shop that has customers bringing their cars in for repairs, maybe a body shop, and they don’t pay the bill or they don’t want to pay the bill, or an insurance company, and you want to dispose of that car. So the question is if you fix a car, can you keep it and get the title?
Well if you’re an automotive repair facility and have an automotive repair license it’s pretty straightforward—you can do a mechanics lien. Almost every state has a process that you can go through as a licensed automotive facility to take a customer order that has been placed for repairs and convert it into a title. There’s a step-by-step process for it. Every state does it differently. But what if you’re just a backyard mechanic or maybe just a private person that fixed the car? Can you keep a car just because you fixed it? Well, it’s a little more complicated.
The short answer is just because you fixed it doesn’t mean you automatically get to keep the car, but there may be ways that you can own the vehicle. First, consider options like a bonded title, court-ordered title, or other title recovery methods. All of those are methods that you can use to get ownership transferred to you for certain reasons. One of the reasons could be that you fix the car, you put money into it you put time into it you put parts into it. If that’s the case, you can use one of those processes. Now keep in mind that just because you fixed it by itself doesn’t mean you automatically get to own the car. You have to go through some steps because if the true legal owner of the vehicle objects to it, then you’re going to have to get somebody to decide who’s right. If you say Hey I fixed your car, and the owner says well it’s still my car. Who wins? That’s not up to you to decide, it’s not up to them to decide, it’s not even up to for the DMV to decide, or the title agency, it’s up to a court to decide. Here’s why that’s important.
If it was just as easy as saying Hey I fixed this car give me the car for free, anybody could just buy a set of $10 wiper blades put them on a car, and say Hey it’s my car. Right. So there has to be more to it than just I fixed a car. There has to be some decision-making process. Otherwise, no car would be safe. Somebody could see the car in your driveway, put on a new set of hubcaps, and say Hey I fixed it, it’s my car now. Right. Obviously, that’s a ridiculous example, but who’s to say what’s ridiculous and what’s not? Right. If you’re a licensed repair shop you’re going to have a signed repair order and a business license, you’re going to have all the proper documentation. If you’re just a backyard mechanic that fixed the car, look it’s your word against theirs. You say you fixed it you know you did, and the owner probably knows they did too, but who at the DMV is going to give you a free car just based on your say-so? Because if they would, anybody could get any car if they want it. So there has to be more to it than that. The court-ordered title process is the most definitive way to do this. Here’s why.
The department of motor vehicles or whatever agency in your state gives out titles, they only have a certain authority. They can’t give out titles based on a verbal request. They have to have certain documentation. They have to have either the old title or proper documents from a mechanics lien. If you don’t have that, the DMV can’t do anything. Even if they wanted to even if there was somebody there who liked you it was a nice person that wanted to give you a title, they can’t push a button and print a title unless they have the right paperwork. So a court order title can override the DMV. The court has authority over the DMV so if you get a paper from the court, boom slap it on the counter at DMV you get a title. So that would be one method that’s very definitive. You cut through all the red tape, you cut through all the bureaucracy of the DMV. It’s not that hard. You file a petition. You file an affidavit saying here look here’s what I did. And you probably have to do some title research. File with the court show up on a certain date that they tell you to with your documents. They’re going to make you raise your right hand under oath that everything’s true. If it seems like it checks out, they’ll give you a judgment of ownership. You walk right across the street to the DMV, and boom, slap it on the counter, you got a title. If you have limited documentation that you were supposed to fix the car, that’s the best way to go.
If you have more clear documentation I mean signed contracts, and paperwork, you might be able to go through the DMV through a bonded title. Now a lot of times people will ask well I have text messages I can show you on my phone. That’s not documentation because anybody could photoshop text messages. You can’t show your phone to the DMV and say this is a contract. Text messages on the phone I mean nothing. So forget about your text messages. If you have signed papers, different story. So if you have a vehicle that you’ve done work on, don’t give up hope. You may have gone to the DMV and tried to get a title and they threw you out, don’t quit. There are things you can do. In 42 out of 50 states, there’s a process called a bonded title, surety bond title, that you can use to get a title in cases like this. I can’t tell you how many times callers call our help desk and the agents there say why don’t you do a bonded title and they knew nothing about it. These are people that have been to the DMV or the title office in their state and their title office has never even told them about a bonded title. Sometimes the DMV doesn’t even know about it. It’s a legal process directly through the DMV. You don’t even have to go to court.
There are a lot of ways to work around this, but be forewarned don’t file for an abandoned title. An abandoned title and a bonded title sound the same but they’re two very different things. A bonded title is you getting a title, an abandoned vehicle is one that nobody wants, and in most states, most jurisdictions abandoned vehicles are seized by the state and auctioned off. Because abandoned means nobody wants it. Abandoned is not “finders keepers” it’s not whoever has it gets to keep it. It’s nobody knows whose it is, nobody knows where it came from. So the state takes it and they try to contact the owner or try to contact the lienholder. If that fails they auction it off. You don’t get to keep it. So a lot of times we have people that call us up and say Hey look I filed for an abandoned vehicle and they towed the car away, what do I do? Too late. So don’t file for an abandoned vehicle because once you file for it it’s too late. Now it’s in the system as abandoned and you might lose out on it.
So, be aware of that and be forewarned that you don’t want to file for an abandoned vehicle unless you just want to give it away. There are other methods you can use. If you have any questions put them in the comments.
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Even before hurricane Ian, our firm received hundreds of calls every day about vehicles that were purchased at salvage auctions that were flooded that are no longer eligible for a title. Many of these vehicles have been purchased from auctions like Copart or IAA and they may have been sold two or three times after the auction to unwitting buyers who purchased a vehicle without a title and didn’t know that these vehicles are no longer eligible for a title. Just because a car can be fixed or is in good condition, doesn’t mean that it can ever be titled.
Many of these cars have VIN numbers that have been entered into the federal database called the National Motor Vehicle Title Information System (NMVTIS). These VIN numbers have been effectively canceled as being eligible for titling or registration ever in the future. It’s an irreversible process. Now, look at these cars on the screen. You see this one in front of you obviously had water. You know up into the engine compartment but even these ones farther back may only have water up to the wheels. Some of these cars even if they can be repaired, or physically look okay are never able to be titled or registered on the road again. Once an insurance company pays a claim of a total loss, which normally will happen that vehicle now has to be sold through a salvage auction. And a lot of times in the past you may have been able to buy and sell cars from salvage auctions fix them up and get a salvage title. Not so easy in the future. Many of these cars have had their titling privileges revoked for that VIN number, here’s why.
This car obviously is going to have major rust and corrosion in major body panels in the mechanical components of the vehicle. The engine, transmission, drive train, brakes, and shocks. Now, look at this one right behind the stop sign. It only comes up about halfway above the center of the wheel, however that water made its way into major components like the antilock brake sensors into the subframe, into the fuel components, much of the wiring and many of the computers are actually under the seats of the vehicle. So a lot of that mechanical and electrical equipment has become corroded or will be corroded in the future. Because of that, the repair of the vehicle might not seem that significant. You might look at this vehicle, it gets dried off it gets washed, and maybe the carpets are replaced. Maybe some of the underneath of the vehicle’s subframe components are cleaned or repaired. But the vehicle will never be the same. It may be a year maybe two years down the road when the components that had saltwater intrusion in between the spot welded joints in between where A-frame and suspension components are bolted together, it’s gonna start rusting. Right. And even if for some reason, the vehicle is allowed to be titled the vehicle is never going to survive past a few years. So you want to avoid these vehicles at all costs. Now, sometimes you won’t even know. This is the case sometimes, you’ll see a vehicle like even this one in the front, the gray one. It looks like a Honda accord. Maybe presented and it looks like a perfectly fine vehicle. The water’s not going to do any physical damage that you’ll be able to see. You might notice maybe on the inside some musty smell or some dampness inside the doors. But it may not seem like a significantly damaged vehicle. However, the title is going to show salvage.
So here’s what you need to do. Run a history report. Now, don’t use Carfax. Don’t use any of these VIN checkers that you find online because they’re just really a $15-$20 throwaway of your money. They’re not a hundred percent accurate. In fact, if you look at the bottom of the disclaimers of many of these sites, it’ll tell you that it’s missing a lot of information, it’s not 100% accurate. The only way to get this information is directly from the DMV department of motor vehicles or the titling authority in your state, have them check it through the national database, not just their own database, the national database to see if this vehicle had any kind of flood insurance claim around the time of hurricane Ian. Last part of 2022 or the beginning of 2023. If the vehicle had a flood claim in Florida don’t buy it. It doesn’t matter how cheap it is. It doesn’t matter how good of a deal you can get. The car is not going to be worth what it’d be reasonably expected to pay for a normal vehicle even if it’s a little bit more money. In fact, if you look at this Honda accord you might not think it’s going to do a lot of damage but when water seeps into this door panel, there are things inside there like your power window motors, your power door lock actuators, all the wiring that goes into those. And that can connect back to things like computers and sensors. It’s going to have water that will soak up into that door panel and get into those parts, Even if it doesn’t go at an actual water level, it will seep up using capillary action into absorbent parts, even in the seats. Even inside the engine compartment, it’s going to get into things like the power steering rack. That’s going to be at or below this level of the water and those things over time, will get the fluid saltwater into the different components, and it’s going to ruin it.
If you add up all the small parts you need to replace it’s going to be more than the value of the car. What’s interesting is if you look at this Honda accord in the front, ironically, this car already had a body repair. If you look at this front fender it’s a slightly different color gray than the back door. And even this seam here between the pillar, this is a slightly different color gray. This was a car that has had this fender at least repainted and may be replaced and the paint didn’t match a hundred percent or maybe it matched when they did it. But over time, it faded at a different rate than the rest of the car. So ironically this is already a car with a collision repair or body repair and now it’s flooded.
So these vehicles are going to have major title problems in the future. A lot of times what happens with clients is they’ll buy these vehicles, they’ll fix them up, then they’ll go to try to get a title and find out you can’t get one. Many of these cars when they’re sold at Copart, the buyer at Copart who’s a licensed dealer, may know or should have known that the car is not eligible for a title, but you as a consumer who buys it later, do not have access to that auction report or to that auction transmittal to know that this vehicle can never be titled. So the short answer is don’t buy one of these cars, it’s more trouble than it’s worth whatever thousands you think you’re saving on buying the car. It’s going to cause more than that to repair hidden damage and not count the fact that the resale value will always be less than a vehicle with a clean title.
The question comes up frequently: what is the difference between a kit car, assembled car, and a replica car?
A kit car is a vehicle that is manufactured as parts in an assembled kit from a company. You may still need to purchase other parts such as the frame and chassis. After purchasing the kit car, you assemble it yourself, then present the new vehicle to the DMV for a new VIN and title. Typically, the VIN is not provided when purchasing a kit car.
A kit car is an umbrella term for assembled and replica cars.
An assembled vehicle is a type of kit car that has a body that does not resemble any particular year, make, or model. These vehicles are completely customized, think along the lines of the “Batmobile”. An assembled car that was manufactured without a kit from a company is still considered to be a kit car due to the nature of its assembly.
An assembled vehicle must meet all safety and emissions standards of the year that it was manufactured. All of the safety and emissions features that go into a new car will be required in this vehicle (anti-lock brakes, airbags, etc.)
A replica car is another type of kit car that has a body that is built to resemble and be a reproduction of a specific year, model, and make. These kits may include original parts, but can also be built with new or reconditioned parts.
Replica cars, unlike assembled cars, do not have to meet current safety and emissions standards. Replica cars must only meet the safety and emissions standards of the year the original vehicle was manufactured. However, this may pose an issue when it comes time for title and registration depending on your state.
Remember, even if you made your car without a kit, it’s still considered to be a kit car, if manufactured by you. When titling and registering kit cars, make sure to accurately label your particular type of kit car.
Carvana, the publicly traded automotive retailer, has been under scrutiny in recent times due to emerging issues related to vehicle titles. In this update, we delve into the latest developments surrounding Carvana, shedding light on crucial information that may impact investors and customers alike.1. Carvana’s Financial Moves: Extending Credit Line and Inventory Financing AgreementIn a recent Form 8K filing, Carvana disclosed key financial maneuvers that may have implications for its operations. The company renewed its credit line with Ally Bank, backed by Deutsche Bank. This credit line, amounting to a staggering $2 billion, is earmarked for financing the used car inventory, utilizing a floor plan or floor line of credit. This financial tool provides dealerships with a line of credit to finance their on-lot inventory.The extension of this credit line by Carvana for another 18 months raises questions about the potential impact on the company’s financial health. A notable risk associated with such arrangements is the temptation for dealerships to engage in what’s known as “floor plan float,” utilizing the line of credit for purposes other than financing the inventory. While there’s no direct evidence that Carvana is involved in such practices, it’s a common challenge faced by dealerships running low on cash.2. Potential Bankruptcy Concerns: Insights from Investment AnalystsSeeking Alpha, a prominent investment platform, has raised concerns about the possibility of Carvana facing bankruptcy. The analysis points to challenges stemming from shifts in the used car market. The recent boom in the used car market, driven by production backlogs and supply chain disruptions, is now facing a contraction in demand. Carvana, with its high inventory and growing financial debt, may find itself navigating through declining margins. The article suggests that Carvana’s business model, while promising in theory, may struggle to generate profits, especially with rising interest costs.3. Securities Class Action: Law Firms Circling for InvestorsLaw firms are circling around Carvana, seeking investors interested in potential Securities class action lawsuits. Allegations include challenging Carvana’s statements regarding its growth, with claims that the company omitted crucial information about issues related to documentation, registration, and title processing. The lawsuits suggest that Carvana’s statements were misleading, potentially affecting its ability to continue business and attracting government investigations.4. Anecdotal Evidence: Persistent Title Issues and Client InquiriesDespite ongoing developments, anecdotal evidence suggests that title issues related to Carvana are still persisting. Recent client inquiries reveal ongoing challenges with title problems, indicating that the issues may not be completely resolved. This anecdotal evidence raises questions about the chronic nature of Carvana’s title problems.Making Informed DecisionsWhile the situation with Carvana continues to unfold, investors and customers should stay informed about the developments and potential risks associated with the company. The extension of credit lines, concerns about bankruptcy, and securities class actions are all factors that can impact the company’s future.It’s essential for stakeholders to conduct their research, consider multiple perspectives, and stay updated on the latest news. As the situation evolves, making informed decisions becomes paramount. This update aims to provide a snapshot of the current landscape surrounding Carvana, allowing individuals to form their conclusions based on the available information.
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