Classic Car Title Crackdown & Vermont Loophole

So fans of this channel for years have been aware of the so-called Vermont loophole and going back probably 10 or 15 years it’s been a very common method to get a title for a vehicle if you’re missing some paperwork. In fact, at one point, magazine articles called the Vermont DMV America’s DMV because they titled so many vehicles all around the country.

The End of the Vermont Loophole
Well, as everybody knows now, that Vermont loophole has ended and even a couple of years ago we started to warn consumers about using this loophole. Many states looked unfavorably about this loophole going back even 2020 or 2019, so we recommended against it as a method of getting a title. Well, now that’s officially over. What do you do about getting a title? How do you get a title if you can’t go through the Vermont loophole and you’re missing documents?

Alternatives to the Vermont Loophole
Well, there’s actually methods of getting a title that were better than the Vermont loophole even when the Vermont loophole existed. We’ll talk about those momentarily, but before we do, keep this in mind too: the Vermont loophole cancellation is just the tip of the iceberg. It’s not just about the Vermont loophole being canceled; it’s about vehicles that are older classic cars being phased out of the population of vehicles.

Georgia and Japanese Imports
What do we mean by that? Well, in Georgia, they’re clamping down on these Japanese Imports, these mini trucks, and you’ve seen them on the roads, these little Kia cars and trucks, and these kind of mini pickup trucks that you’ve seen. The reason why they’re being phased out is because they’re called not safe to be driven on roads, and Georgia isn’t the only state. Many other states are starting to phase this in.

Impact on Classic Car Owners
Many owners of these vehicles counted on the fact that there was a 25-year-old loophole for importing vehicles that didn’t have to go through the same import procedures. That’s true; they don’t have to go through the import procedures to come into the country, but that doesn’t mean that the state has to accept those for registration.

California’s Restrictions on Classic Cars
Here’s another one: California. This is the big one. It’s going to restrict classic cars. Think about that. Let that sink in. California, the birthplace of cruising and the Beach Boys and all the old car culture, is going to ban old cars from driving on the road. It’s looking to institute a zero-emission zone soon, very, very soon. It’s going to allow local governments to gather information about classic cars. They’re already sending out surveys to classic car owners and how their owners use them.

California Leading the Way
We knew this was coming to the U.S. California would be the first, right? So you might say, I don’t live in California, I don’t care. Well, guess what? Like everything else that happens that is restrictive, California is probably the first place it’s going to happen. According to the call report, a survey was sent out to owners of classic cars from 1978 and earlier. Think about that. A 1978 isn’t really that old. I mean, classic cars from the 70s, I guess, but a lot of good cars are not necessarily classic, and asked about how many miles are on the odometer. They’re going to start tracking your mileage to make sure you’re not driving them too much.

Emission Zones and Mileage Tracking
The state should allow local jurisdictions to create zero-emission zones, and in those zones, you will not be able to drive cars that don’t meet current emissions. You don’t think that’s possible? Well, in London, they already have that. In other areas of the UK, they find people daily for violations. Justification for a full ban on older cars is climate change.

Impact on Older Cars
So the way that they’re going to go about doing this is first they’re going to start contacting owners of classic cars, asking them how much they use them, asking them how many miles they drive on them, and they might use that against you. They might create a database. Either way, between these classic cars, these import cheap trucks, the shutdown of the Vermont loophole, older cars or less mainstream cars that aren’t bought new from a dealership are at risk. It may take a few years.

Urgency to Get Titles and Registration
So our advice is if you have an older car, get it titled and registered soon because at some point you might not be able to. Well, how can you do it if you don’t have paperwork?

Court Order Titles
Give a quick blurb about the most powerful process to use, and that’s called a court order title, sometimes called declaratory relief, sometimes called a quiet title. This is from an attorney in Florida, and if you’re in Florida, you can contact them about doing this. We don’t know who they are; we just found their website.

Legal Advice on Court Order Titles
Recently, I have received a lot of phone calls about filing a lawsuit to establish ownership of a motor vehicle. A person goes to the motor vehicle and tells the person that I don’t have a title, and they tell you under these laws 3 19 28 and 86.011, the court can issue you a judgment of ownership. Some counties have some documents you can use for that; some don’t. It says here it’s better done with attorney’s assistance, but like he said many times, people think the value of the property doesn’t match how much you got to pay. Attorneys charge three, four hundred bucks an hour. They might charge eight or nine hours. It could be several thousand to do this with an attorney. Now, you don’t have to use an attorney; it’s not required.

DIY Court Order Titles
But this is the way you do it as a court order title, and you can check out our website. You see the link below about more information on court order titles. But in this day and age of cracking down on older cars, on import cars, and no more Vermont loophole, this is the power play. This is where you get, you go over the head of the DMV. DMV has certain limitations. They give you the runaround. It’s a lot of bureaucracy. If you go over their head to the court, the court can give you a judgment of ownership. You bring that to the DMV, slap it on the counter, and they have to give you a title.

Conclusion and Resources
So if you have more questions, you can email our help desk at [email protected]. We have a lot of great people there that can help you out. Glad to be of assistance, and you can use our website as a free consumer resource. We have videos like this one and instructional videos. We have over 800 documents you can download for free, and it’ll give you a good head start on fixing your title problem so that you can get your car on the road before the big crackdown comes and you can’t drive old, nice classic cars on the road anymore.

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New Loophole For Car Titles

So you have a car but you don’t have a title. It’s a problem. If you want to get a new title for a vehicle with your name on it, you have to do one of two things: first of all, you have to either already have a title in your name that you lost and get a duplicate (that’s not going to happen), or you have to find some way to convince the titling authority that you are eligible and it’s proper for you to have a title in your name. They’re not just going to take your word for it. By giving you a title with your name on it, they’re effectively taking away the ownership from somebody else. Somebody else has their name on that title record somewhere—it may not be in your state, maybe somewhere else, but somebody is the legal owner of that vehicle as far as the official government records are concerned.

Ownership and Titling Authorities
For them to give you a title in your name, they have to rip away that ownership from that person. Now, it’s probably true that that should happen. You know the story: you bought it, you have a bill of sale, maybe a lienholder or whatever, but the DMV doesn’t know that, or the titling authority doesn’t know that. They’re not just going to take your word for it because if they did, then anybody could get a title for any vehicle they wanted, right? There’s an easy way to do it. Don’t despair; there’s an easy way to do it. But I’m just telling you what really is going on. When you get a title, it’s not just you getting a piece of paper with your name printed on it. It’s them taking away somebody else’s ownership rights.

Importance of Legal Ownership
And the reason that you should want that to be the case is because if it was easy for anybody just to get a title just by filling out some forms, then no vehicle would be safe. Any vehicle you had in your driveway that’s in your name, somebody could come along when you go on vacation and say, “Hey, that’s supposed to be my car. Here’s a form, give me a title,” right? Having the keys, having possession means nothing. You have to have the legal ownership. So, how does it work? Well, in the past, many people who did not have proper paperwork did a little kind of backdoor loophole by going through Vermont. We’ve all heard about that for many, many years. It was a way to evade the proper procedure for your state to get a title, which you know you have to jump through a few hoops to do.

The Vermont Loophole
Vermont made it easy. It was legal, but it’s not what the states wanted. So, over many years, they cracked down. Some states refused to accept it. Now, it’s gone. You can’t do that anymore. Vermont’s gone. So, what do you do? Well, some states, you can do a bonded title, a surety bond title, and if your state is one of the states that allow for a bonded title, you can check out our website, cartitles.com. It’ll give you a list of all the states where you can do a bonded title. If your state is one of them, you could do a bonded title. But before you do that, remember there are some pitfalls of doing a bonded title. First, you have to purchase a surety bond for the vehicle. The surety bond you have to purchase normally is one and a half times the value of the vehicle.

Pitfalls of Bonded Titles
You purchase the bond, you bring that to the DMV, and they give you a title. The title will have your name on it, but it will also say “bonded” stamped in big red letters. That’s not a clean title. So if you look to sell it, trade it in, finance it, it might be a problem, right? Especially if you look to sell it and the buyer maybe lives in a state that doesn’t do bonded titles. They can’t even bring it there. The other thing is if anything ever comes up on that vehicle, a claim against the vehicle, maybe a probate case, maybe a divorce case, maybe somebody owes money and there’s a judgment, if they come and say, “No, this vehicle has a claim against it,” the bonding company will pay off that claim, but then they’ll come after you for the money. So there’s some liability when you get a bonded title, but you could still do it. It’s a lot easier than some of the other methods.

Court-Ordered Titles
What else can you do? Well, that’s what this video is about. We’re already four minutes in, I’m not getting to the punchline yet. The punchline is, in every state, you can do what’s called a court order title. And you’ll see on the screen here, this is a fact sheet. This one happens to be from Pennsylvania. In Pennsylvania, they don’t call their title division Department of Motor Vehicles. They call it Department of Transportation. It’s called PennDOT, right? And they have a process for it. Here is Indiana court order title application checklist. Here’s Florida actions for obtaining alternate proof of motor vehicle ownership by court order. And we’re going to look at these three examples. Your state and counties have procedures for this, and we’ll talk about how they’re different in different places, and what are the similarities, and what’s going on behind the scenes.

The Court Order Title Loophole
A court-ordered title is basically a loophole. It’s the new loophole. Now that Vermont is not a loophole, the loophole is instead of begging the DMV to give you a title, you go over their head. The DMV can only do certain things. They can’t give titles to people that don’t have proper paperwork. Even if they wanted to, they can’t do it. They can’t break their own rules. They can’t take your word for it that you’re supposed to have a title, you’re supposed to be the owner. They have to go by procedures. So, if they’re giving you the runaround or the DMV has given you a lot of bureaucracy, then what you do is you do a court order title. You go over their head. The court is their boss. And you go to the court and you tell your story. See, here’s the difference: the DMV cannot listen to your story.

Court Authority and Your Story
You can tell them, “Well, I bought this car on Craigslist. I got a bill of sale, and the guy gave me his license, and I got the text message.” They can’t listen to that. They have no ability to do anything just based on your story. It’s all hot air to them. The court can listen to your story. So, if you go to the court and you file a petition, and you tell the court, “My petition is I want you to say I’m the owner,” and you also file an affidavit, “Here’s my story. I bought the car on Craigslist. I got a bill of sale. The guy didn’t answer my text message. Here’s my proof of payment,” whatever you have, the court looks at it and says, “Your story makes sense.” The court can do that. The DMV cannot do that. So, you’re going over their head. Once the court does that, they give you a court order, and you bring that to the DMV, slap it on the counter, and now the DMV has to listen to you. And it’s powerful because the DMV can’t say no. They have to say yes because their boss is the court.

Legal Disclaimer and Court Order Process
Now remember, we’re not attorneys. We’re not giving you legal advice, but here are some of the key things to understand about a court order. Here’s Florida actions for obtaining alternate proof of motor vehicle ownership. That’s the key: alternate proof. If you don’t have the old title—I think we have one here. Yeah, here’s a title, right? This is what a title looks like. You’ve seen it, right? This is an official document. It’s all scroll work. It’s all official. If you don’t have one of those from the last owner properly signed over to you with no errors, no whiteout, you’re done. Now, you can go to court. Florida law requires a purchaser of a motor vehicle to obtain a court order directing the DMV to issue a title. Think about that. The court order is directing the Department of Motor Vehicles to issue a title. It directs them. They’re the boss. The court is the boss.

Importance of Court Orders
When the individual does not receive a title at the time of purchase, the court will give a direction to the DMV, and the law requires it. So, this is in the law: implementation of uniform procedures and petitions to make it easy in accordance with the authority. And it goes into the details: a person seeking a court order must complete the clerk of court. A couple of things: the complaint (also called a petition) and an affidavit. So these are two of the documents that are needed. I mean, this is Florida, but all 50 states have this. Now, it’s not at the state level either. There are actually 3,611 different counties in the country. You file this at the county, so the counties may have some different procedures, but basically, you file the affidavit of facts, telling how you got the vehicle, what your story is. This is where you can vent. You can tell your story. People will listen to you. DMV doesn’t listen to you. You file a petition or sometimes called a complaint. This is what I want: declaratory relief. Declaratory comes from the word declare. I want the court to declare the relief. The relief you’re looking for—how relieved would you feel if you got a title? That’s what you’re asking for: relief. And the relief is a vehicle title transfer.

Understanding Legal Terms
You’re complaining about the DMV to the court for them to declare, to give you relief for a vehicle title transfer. It’s all right there. It sounds like a lot of fancy legal talk, but it’s really not. It’s really exactly what you want. In addition, in some states, you also are going to need what’s called a declaration of non-interest. What that means is you have to say in your own words and sign it that you’re not aware of anybody else that’s claiming the vehicle, right? It’s not disputed because the court is going to make this real easy if there’s no dispute. If you just say, “Look, this is my vehicle. I got a bill of sale. I paid for it. Nobody’s contesting it. Nobody’s arguing with me about it.” It’s going to be easy. But if somebody’s arguing with you about the vehicle, then see, then the court’s going to be—it’s going to be more difficult. This is for people who have no complaint against them or no claim against the vehicle. So you may have to do a third document called a declaration of no interest, meaning that you’re not aware of anybody else that has an interest in the vehicle.

State-Specific Procedures
And here’s Pennsylvania fact sheet: transfer of ownership by court order. That’s what you want, right? It outlines procedures that must be followed when applying for a title involving the involuntary transfer of a vehicle ownership. This is when the last owner isn’t volunteering to sign the back of the title. Here’s your title. If the owner on the back signs it, that’s a voluntary transfer. If the last owner is not volunteering because maybe you don’t know who it is, maybe they won’t sign it, maybe they’re deceased, that’s an involuntary transfer. That’s different than a contested transfer. If they’re contesting it or disputing it, different story. This is involuntary. This procedure involves obtaining a court order and should only be used in circumstances where it’s impossible to transfer by a title. So if you don’t have a title, it’s impossible to transfer.

Legal Advice and Procedures
Now, you can do this. Remember, you can’t go into PennDOT or the court to ask questions because they cannot offer legal advice regarding the transfer, right? Because they consider that to be legal advice, and governments can’t do that. It tells you the procedures, what you have to do. You have to have a description of the vehicle, you have to find out what jurisdiction it is (that’s where you live), time and place of the court proceedings, and then once you get that, you get a certified copy of the court order declaring the owner of the vehicle, and then you just apply for a title, MV-1. That’s what most states call their title application, MV-1. And then here’s an example of the court order in Indiana. It says you must obtain a court order. Once you have obtained the court order, you may apply for a title using this paperwork. So, the court process and the DMV are two different things. First, you go to the court and get the court order. Then you go to the BMV. It’s a very common scenario. Don’t be dissuaded or discouraged or afraid of the fact that it says “court.” This is not like Law and Order, Jack McCoy, big court case, trial, jury, everything else. That’s not what it is.

Preparing Court Documents
In fact, most courts don’t want you in their courtroom. They want to do this all remotely. So, what you do is you prepare these four documents: the petition or complaint, the affidavit of facts, the declaration of non-interest, and a title application. And you file those with the court. Just prepare them all and file them. Don’t go to the court and ask them about it because most courts aren’t going to know. If you go in and say, “I want a court order title,” they’re not going to know what you’re talking about. You just have to file the documents. We also recommend filing them by mail, not in person. And we talk about that on our website. Get those four documents prepared. Now remember, one thing to keep in mind is these are not fill-in-the-blank forms, right? So you’ve seen forms like this before. This is an application for title where it says “name,” blank, “address,” blank, “VIN number,” blank. You fill in the blanks. A court order title application or petition doesn’t have a form. You just color by numbers, put in your name. You have to start with a blank sheet of paper.

Formatting Court Documents
Now, some states give you an example. Like, here’s a sample of a court order where it gives you the wordings, but it doesn’t have a form for you to fill in. The other thing is every court’s different in their requirements. Some have double space, triple space, one-inch margin. You have to start with the petitioner or the complainant. They have a format. There’s a way you can find out that format. You can go to the court and download and print out any existing court case of somebody else. Maybe somebody’s suing over a dog bite lawsuit. Find out what the case looks like in that county, and then use that format and put your own wording in it. If you need assistance for filling out these forms, you can check out our website, cartitles.com. But the purpose of this video is to tell you about how important and powerful this process is.

The New Loophole
It’s the new loophole. It’s the new loophole because it may not be quite as simple as just filling out a single page, mailing it to Vermont, getting a license plate, but in reality, when you think about it, it kind of is. Because when people used to do the Vermont loophole, you have to first fill out the Vermont paperwork, mail it to Vermont, wait two, three, four weeks, get that back, and then take that and then fill out your state paperwork and mail it to your state, wait two, three, four weeks to get a title, right? The other thing is, it usually costs a lot less because Vermont charged you sales tax, and they charge you tax on the full book value of the vehicle. If you paid a thousand dollars for a vehicle on the bill of sale, but Vermont could look it up in a book and say 8,000, they would charge you tax on 8,000 at six percent. That’s almost 500 bucks in taxes, plus the $76 registration fee for Vermont. You’re in for almost 600 bucks. Court orders don’t usually cost that much. Most courts charge 30, 50, 100 bucks, sometimes 200 bucks to file the paperwork.

Final Thoughts
It’s not really any more complicated than doing Vermont. Just people are afraid of the word “court,” and they don’t feel like they’re maybe getting over on demand as much because it’s not a loophole. But in reality, it is because it’s more powerful. Remember, the Vermont DMV has no authority over your DMV. Many people would take that Vermont registration, that license plate, go to your state and say, “Hey, I want to switch this for a title in my state,” and they would say, “This is a scam. We know this Vermont thing. You’re not fooling anybody. Don’t bring us this garbage,” and they’d kick you out. We hear this all the time from people who did Vermont. They can’t kick you out with a court order. With a court order, you’re in. They have to listen to you. So use this to your advantage. Don’t be afraid of court. Don’t think it’s a big deal. You may have to jump through a couple of hoops, but your alternative is, what, not having a title? Anything else is going to be harder, more expensive, and take longer, guaranteed. There’s no magic title where you just say to somebody, “I want a title,” and demand it, and one of these shows up in the mailbox. It doesn’t work that way. There are things you can do to get a title. It takes a little bit of work, but remember, this is the law. Florida law requires the DMV to issue a title when the person has a court order. Requires. So use it to your advantage. Check out our website to read more about it. Glad to help. If you need more assistance, you can email [email protected]. There’s also a way you can arrange a private consultation with a live certified title agent. We’d be glad to be of assistance.

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How Salvage Titles Are Determined

Determining Vehicle Titles
So how is it determined whether or not a vehicle is a salvage title or a clean title? Well, the states have various calculations for how that’s done. Many times it’s if the damage is more than a certain percentage, 75% or 80%. Sometimes there’s other criteria.

Example from Connecticut
But here’s a good example. This happens to be from the state of Connecticut that describes the Connecticut total loss threshold and how that’s calculated. It’s important to understand how this is done because even if you purchase a vehicle that has a clean title, if the vehicle has damage, it could turn into a salvage title later for you. So you have to understand how this is done, what the calculation is, and there’s a lot of misconceptions about what makes a vehicle a salvage title.

Connecticut Statute 38a-353
Well, in Connecticut, the way that it’s done is this is their 38a-353 statute calculation of settlement amount in motor vehicle. Whenever a damaged motor vehicle has been declared a constructive total loss, the insurance help pay this. What is a constructive loss? What is the definition? Well, here it says right here, a constructive total loss means the cost of repair or the cost of both and salvage equals or exceeds the total value of the property at the time of loss.

Example Calculation
Now this may sound a little confusing, but here’s how it works. Let’s say if you have a vehicle that is worth $7,000, and I’ll just use some numbers, but you can plug your own numbers in. Let’s make it higher because it’s tough to find a $7,000 vehicle anymore. Let’s say a $10,000 vehicle, and it’s involved in some kind of an accident—minor sheet metal damage, couple airbags go off, maybe some glass broken—and the repairs are going to cost, let’s say, $6,000. And you might say, well, that’s a lot of money. Look, this day and age, almost any fender bender is going to cost $5,000 or $6,000. By the time you change out the bumpers, you do any frame straightening because everything’s unibody, you do paint, a lot of labor and paint, and especially when airbags go off. Airbags can be $800 or $900 per airbag to replace or to repack. So you have a minor fender bender, a couple of bags pop, you’re talking five or six grand. You might say, well, that’s only, you know, 60% of the value.

Salvage Value Calculation
However, what they do is from the $10,000, they subtract the salvage value. What is it worth right now? So if you look at that vehicle, that $10,000 vehicle that’s crashed, what is it worth in its current condition? Well, it may be worth more than you think because at auction there is probably going to be a salvage parts dismantler that is willing to pay $5,000 or $6,000 for that vehicle. And the reason why is because it still has a good engine, transmission, probably some body panels, computers, the other airbags. There are many parts that can be dismantled, but by the time they take those parts off, they could probably sell $1,000 worth of parts. But they have costs for dismantling, labor cost, shipping cost, retail cost, that kind of thing. So they’re going to pay probably $4,000 or $5,000 for it. So if they pay $5,000 and the repairs are another $5,000 or $6,000, that’s a total loss. It’s what’s called a constructive total loss. The car isn’t completely destroyed, but constructively, financially, it’s a loss.

DMV and Salvage Titles
And we’ve seen this happen with cars that even didn’t go through insurance. If you have a car that was damaged in an accident and you fix it, if there’s anything about that vehicle that brings it to the attention of the DMV, they’re going to flag it as a salvage. And if the insurance company didn’t make it a salvage, the DMV might.

Selling a Damaged Vehicle
How would that happen? Well, if you look to sell it in its current condition, and as part of that sale, most states have a requirement that the vehicle be inspected. Even if it’s just a VIN inspection or a safety inspection or emissions inspection, maybe you sell it to another state. Many states have a rule that says if you bring a car in from another state, we have to inspect it. Maybe it’s when you get insurance, they want to inspect it to make sure that it’s in good condition. Maybe you bring it in for service, and the service department says, we’re not sure if this car is safe for the road because we see there was some frame damage and they trigger an inspection. If that’s done, here’s what happens.

Connecticut Salvage Inspection
Here, we’re going to stick with Connecticut. Under that Connecticut total loss threshold salvage inspection information and this the same statute 38a-353, same one, State of Connecticut Department of Motor Vehicles. Salvage inspection locations: there’s two, Hamden and Wethersfield. Those are the two main offices. Wethersfield is their main branch. The capital of Connecticut is Hartford, but Wethersfield is close by, and that’s where they do a lot of them. They have one downstate in Hamden for people who don’t live near Hartford. They charge an inspection fee of $88. Okay, so far so good, not the end of the world. The owner must purchase and complete an inspection report, and there’s a form for that, B269, and validate it before presenting the vehicle for inspection. Be sure to allow enough time and have the inspection scheduled.

Inspection Requirements
You know, here this is a separate issue, but you notice they say right on it, MV907A is not acceptable by the Connecticut DMV. Any of you out there that have an MV907A from New York and are trying to bring it to another state, forget it. The other states don’t accept it because they require you to bring it back to New York to get it inspected there. A private individual cannot drive or tow the salvage vehicle to the DMV office, can only bring it in on a flatbed trailer or car carrier. No wheel of the vehicle may touch the ground, means you can’t use a tow dolly with two on the dolly, two rolling, can’t do that. Can be driven by a bona fide repairer with repair plates only when the dealer is the owner of the vehicle. However, if it fails, they got to tow it away. So if you’re a dealer and you put on dealer plates and you drive it there, cross your fingers because if it fails, you got to call a trailer. The owner of a vehicle that has been declared salvage cannot transfer ownership on an application for title. You must first obtain a duplicate title which says salvage and then sign it over to the purchaser. If it’s branded parts only or unrebuilt or re-registered under any circumstances, this is something you know we’ve talked about for years. Non-repairable, non-rebuildable, parts only, those cars are done.

Required Documents for Salvage Inspection
What do required documents for salvage inspection? You have to have that K1 186, it’s a salvage vehicle repair report showing what the major component parts are replaced according to industry standards. You have to present that so they have to see that the parts you put on are legitimate parts put on properly. Invoices, receipts apply, meaning that you have to have proof that these parts you put on are not stolen. You have to have photographs, clear photographs of the repaired area, and they must show the entire vehicle by at least four photos on each corner. The damaged areas prior to repairs. So if you already fixed it and you didn’t show what it was like before, you might be out of luck. The repaired areas with new parts prior to seam sealing, painting, or rustproofing. They want to see how it’s attached, how they come together before you cover it up with a bunch of junk. They want to see what happens, how the new parts were attached. If they’re welded, the area prior to painting and corrosion proofing, if it’s no longer visible, photographs must be attached. This is a hard thing to do.

Airbag Certification
You have to have an airbag certification statement if the vehicle is equipped with an airbag. A separate statement will be required in all cases completed by a dealer with proof of certification for all vehicles, regardless if the airbag was deployed or not. So if you have a vehicle that had major damage and the airbags didn’t pop, that’s good, you don’t have to spend the money for the airbags. You still have to get a dealer, a franchise dealer. Look, franchise dealer, what does franchise dealer mean? It means the manufacturer who built that car, a dealership from that manufacturer has to look at it. Not Joe’s Garage, not Bob’s Honda Repair, it’s Executive Chevrolet, like the new car dealer. How much is that going to cost you to bring it in and have them inspect it?

Insurance and Receipts
Insurance adjuster’s report if it was an insurance claim. Receipts for major component parts. Receipts are required for any major component parts that are replaced: engine, transmission, fender, hood, door, tailgate, trunk. You see what we’re talking about here, right? The receipts for these parts must clearly indicate the name of the source and the VIN if it was a used part.

Constructive Salvage
Again, this can kick in even if the insurance company did not report it as a salvage. If the calculation makes it a constructive salvage based on the total loss threshold. Remember, constructive salvage, what does that mean? Constructive total loss means the cost of repair exceeds the total value of the property. So about the only way you can get away with this is if you buy a crash car, nobody knows about it, you fix it up before anybody looks at it, and you can get it through the inspection without people realizing, wait a minute, this car was a major repair. Because if you bring it for even a casual VIN inspection or emissions inspection and somebody sees that there were major repairs done to it, it can get flagged. And even some dealerships will flag it because they don’t want to have the liability of that car being on the road if they put their hands on it, they touched it, they want to get it off the warranty too.

Lender Inspections
Sometimes lenders will want to have a vehicle inspected to make sure they’re lending money on a vehicle. So anytime you’re buying a car from Copart or IAA or one of these auctions, make sure that you know even if it’s supposedly a clean title and there’s no salvage brand on it or rebuilt brand, that any damage could trigger a salvage inspection even if you think you’re getting away with a clean title.

Triggering a Salvage Title
So these things can be triggered by the total loss threshold that might not be as much as you think. You might say, well, it’s under 75% damage. Well, you have to add back in the salvage value, what the vehicle is worth now. And if it crosses 75% with that, you’re done. That’s a salvage. And sometimes the vehicles that seem like they have a clean title, it’s just because the insurance claim hasn’t been through the system yet. Once that insurance claim gets into the system, then all bets are off. The towing company can report it, Copart can report it, lots of people can report it even after the fact. And you might find out later that you have to jump through a bunch of hoops to get your salvage vehicle approved.

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Get A Charge Off Title Lien Released

So if you have a vehicle that has a lien recorded against the title with the DMV, you cannot do a title transfer until you get that lien released from the title record. So how do you do that? What if it’s a charge-off? What if it’s a write-off? That’s going to be one of the most common scenarios for a vehicle lien to be recorded in an official title record. If that lien or underlying payment has not been paid for a long period of time, the lender has probably placed it into non-performance or delinquency status, and it becomes a charge-off or write-off.

Lender’s Perspective on Charge-Offs
What that means is the lender does not consider it to be an asset on their balance sheet any longer. It means that the loan can no longer be counted on as a securitized instrument for the lien holder. So what happens is they do a charge-off; they do a write-off, but they don’t go out of their way to remove the lien from the title record. And the reason why they don’t is because it costs them money to actually do a lien release. So why bother doing it if it’s not going to benefit them?

Requesting a Lien Release
So how do you get that lien removed? What you want to do is you want to request it from the lien holder. However, it’s very important how you go about doing this, and we’ll talk about the method and also talk about a backup if, for some reason, you request it and they don’t do it, or they drag their feet, or they give you a runaround. What can you do to get a lien release without relying on the lien holder, without relying on the lender?

Step-by-Step Process
Step one is to contact the lender in a very specific way. You want to do it in writing; you don’t want to do it by phone, email, text message, Facebook, or any electronic means because lien holders do not have a specific lien release department. There’s not people sitting around waiting to sign a lien release. Everybody at the bank, financial institution, dealership, wherever the lien is held, has some other job they’re doing every day, and for them to drop everything and do a lien release is not going to be beneficial to them.

Mailing the Lien Release Document
So what do they do? You call them up, and you say, “I need a lien release,” and they tell you that they’re not going to do it, or they can’t do it, or they can’t talk to you because you’re not the borrower, or they tell you they will do it, but then they never follow through. So what you do is you take the actual lien release document. You can see one here on the screen. This is a lien release; this happens to be from the state of Nevada. Every state has a specific official government lien release form. Nevada is one of the simpler ones. You get this form, and you fill it in 100%. The Vehicle Identification Number, year, make, model—you see all the spaces on the screen—registered owner, printed name of lien holder, address, phone number of the lien holder, and you print it and mail it to the lien holder.

Importance of Physical Mailing
Don’t try to fax it, email it, any other way. If you do that, it won’t work. Whether it’s a charge-off, write-off, or even if it’s paid off, you don’t want to do it electronically. Here’s why: that lien holder is going to get that email, and now they have to print it, they have to find an envelope, they have to do everything that is work in their daily routine. If you already have it printed with a little arrow sticker where to sign and put a return envelope in that mailing so all they have to do is sign it and send it back to you, you don’t want them dragging down to the mailroom to find a stamp, to get an envelope—you don’t want to give any excuse to throw it in the trash.

Including a Letter of Non-Interest
In addition to this lien release document, also include what’s called a letter of non-interest. Sometimes, if that lien holder employee that pulls it up—because that’s who’s going to get it, just an administrative employee—they look it up and they say, “It’s a charge-off.” Well, they might not know that that means lien release, but what they do know is if you have a letter of non-interest that means, “I have no longer any interest in this vehicle,” signed lien holder. They can sign that because a charge-off means they don’t have an interest in the vehicle. So include a backup with your mailing that says “letter of non-interest.” Have that form also prepared, printed, filled in. Don’t leave anything for work for them to do when you send it. Again, put a return envelope with your name already printed on the front, a stamp on it, so all they have to do is sign it, put it in, and mail it to you.

Multiple Submission Locations
The only time that lien holders we see do not send you a lien release is if it’s an active loan on a later model vehicle with a lot of money owed. If you have, you know, right now it’s October of 2023, if you have a 2022 vehicle that’s owed $50,000 on it, you’re probably not going to get a lien release. As long as the vehicle is older, even if it has a lot of money on it, if the lien is delinquent, charge-off, write-off, many times the lien holder just signs it. In addition, the way we do it is we send it to multiple locations for that lien holder because all you need is one of them. If you just send it to one place, that person might throw it in the trash. If you send it to four or five places—we send it to up to five—all it takes is one of them, some secretary, clerk, administrative person signs it, mails it back to you. It increases the probability you’re going to get that lien release.

Consequences of Not Obtaining Lien Release
Because if you don’t get that lien release, you’re in big trouble because you have to either forget about the car or you have to go to plan B. What is Plan B? Well, here’s Plan B. Plan B is you have to do a court order title, and here’s an example. This happens to be from a county in Ohio. It’s a court order certificate of title. You have to fill out an affidavit, a journal entry, a docket request, an affidavit of facts, a petition, also be typed up and submitted to the court.

Court Order Process
Now, if there’s a lien on it, they’re going to ask you, “Did you try to contact the lien holder?” So you can show you already did this. You don’t want to start with the court order title if there’s a lien on it. If you know there’s a lien, at least go out of your way to try to have documentation, not that you called or emailed, but you actually mailed something to the lien holder. If you can have proof of that, now the court is going to be on your side because they say, “Well, the bank doesn’t want anything to do with it. They didn’t, you know, send any reply back.” So the court will then step in. Use this as a backup method. It’s very powerful because if you don’t get the lien release from the lien holder, the court can override that with the DMV. Use these as methods you can use to get that lien off the title record.

DMV Regulations
The DMV can’t do it without having one of these two forms: either the lien release from the bank or the court order from the court. Without one of those two things, the hands are tied of the DMV. They’re not allowed to remove a lien just based on some receipt you show you paid for it or your verbal statement. They can’t do that. They have to go by what the law says. It seems like they’re giving you the runaround, but in reality, they are following their own rules.

Timing and Court Order Submission
So try to get the lien release. Maybe wait, you know, 7 to 10 days. If you don’t get it back, then start your court order process. And the court order process is not that bad. It’s some documents you have to fill out. The one thing about court is they’re very picky about the documents, making sure everything’s i’s are dotted, t’s are crossed, everything’s done the right way. If anything is off, they’ll just reject it. So you want to make sure it’s done right. And we also recommend don’t bring it to the court directly, mail it to the court. If you bring it directly, the clerk might look at this and say, “Well, you know, we don’t know what to do with this.” Sometimes clerks don’t know exactly what’s going on behind the scenes, and if you bring it in, they could turn you away. If you mail it, there’s nobody there for them to argue with, right? They just file it with the court and let the judge or the magistrate deal with it.

Court as an Ally
If you’re there, they can kind of try to deflect things. You know, most courts are overloaded, so they are told unofficially to not do as many cases as possible. Nothing wrong with the courts, not doing anything wrong, they’re just trying to keep junk cases from showing up. But court-ordered title cases are actually good for the court because they’re administrative. It’s not like a big Law and Order Jack McCoy kind of thing where you have to go in and do a big case. It’s all administrative. It’s all done with paperwork. So those cases the courts are comfortable with, but the clerk may not know that. So don’t leave it to chance by walking in the door and saying, “Here’s what I got.” Remember, the court can also not help you with any of the paperwork.

Legal Advice Limitation
How do we know that? Well, they tell you. Look right here. They say the court’s office is not permitted to give legal advice, distribute forms, or assist in the completion of any form submitted to the court. So they tell you right there, and that’s pretty much across the board. Every state has that. They can’t assist in the completions of the documents. You have to have them all done when you walk in the door. You can’t come in empty-handed.

Final Advice
So try your lien release, or if it’s a clear title, try your prior owner contact. If those fail, keep your documentation that you tried, and then let the court be on your side. This is one example where the court is your friend. They’re not against you. They’re not trying to harm you. They’re not trying to jam you up. The court is trying to help you deal with the bureaucracy of the DMV. And if you can get them on your side, there’s no more powerful ally in the world than the court, and you want to have that tool in your toolbox. Because the DMV, you know, as much as they want to help, it’s a bureaucracy. It’s a punchline of jokes on sitcoms, and you don’t want to be subject to that if you don’t have to.

Additional Resources
You also have the option in some states of doing a bonded title. That’s a subject for other videos. Make sure you subscribe to our channel. Go through our whole library. We have an extensive video library with videos about many, many subjects of getting a title, instructions for some of these processes, and if you want more information, you can check out our website cartitles.com or book a consultation with a certified title agent.

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Is Buying/Selling A Car With No Title Allowed Or Legal?

Is buying or selling a vehicle without a title a good idea? In this episode of car titles, we’re going to talk about how vehicle titles are more important than actually taking possession of the vehicle. We get hundreds of calls a day, sometimes over a thousand calls a day, and many of the time that people call in it’s because they’re considering purchasing a vehicle without a title and they want to know how they can get a title if they buy it.

Legal Advice: Never Buy Without a Title
In our sales department, we always have the advice to never buy a vehicle without a title. We never recommend doing it. Title is a legal government document you see like this and it’s something where if you buy a vehicle and even if you get a bill of sale even if you get the keys even if you get possession if you don’t get that certified title document you have nothing you’ve purchased nothing. The title document is the most important thing.

Legal Ramifications
So, can you buy a car without a title? Well, let’s talk about what happens if you do. In many states, it’s actually against the law to buy or sell a car without a title. Here’s the statutes from Texas: “The owner of a motor vehicle that is required to be titled must obtain the title before selling or disposing of the vehicle. That’s a crime if you don’t.” In Oregon, violating title requirements is also a crime.

Risk and Reality
Now, that doesn’t mean the SWAT team is going to come in and swoop down and pick you up. People buy and sell cars without titles all the time. Why do they have these laws? Well, it’s to protect you from the risks involved. If you purchase a vehicle without a title, in most cases, you could probably get a title 70-80% of the time. It’ll all work out. But 20 or 30% of the time, you’ll never get a title ever. And you won’t know that until you actually try to get a title.

Unreliable Checks
There’s no amount of searching VIN checks, car checks, background checks on a vehicle you could ever do to find out 100% if you will get a title. Forget about Carfax, VIN search, VinAudit, none of those places are going to tell you everything you need to know about getting a title. Even if it looks like it’s a clean vehicle, clean title, it doesn’t mean necessarily you get to be the owner of it, right?

Hidden Issues
Sometimes vehicles are not eligible for you to get a title because of something in the background. Maybe it’s a salvage title, maybe it’s a parts-only title, maybe it’s reported stolen. Some of that you can find out on Vin or Carfax, but if there’s a lien on the vehicle, you will never find that out by Carfax.

Lien Issues
It might say no lien found, but if you read the small print, they don’t search for liens everywhere. In fact, Carfax has about 10% of all liens in their system. So, you’re not going to find it. You can’t get that information from the DMV either because they’re not allowed to give it out.

Ownership Disputes
If there’s a lien on the vehicle, all title transfers are blocked. You cannot transfer title with a lien on the vehicle, even if it’s paid off, until the lien holder clears it. If there are any ownership disputes on the title, if the last owner maybe doesn’t agree or doesn’t want to cooperate with you to do a transfer, you’re going to have a problem.

Financial Risk
So, unless you’re willing to take the money that you’re looking to spend on that vehicle and completely make it speculative, put it at risk, don’t buy a car without a title. End of story.

Post-Purchase Solutions
Now, if you have already purchased a vehicle without a title, now you have to at least try something. It doesn’t hurt to try. You can try a bonded title, court order title, prior owner contact. There are many methods you could try to get a title. Our website has them all listed below.

Seller’s Responsibility
But if you’re considering purchasing a vehicle without a title, ask the seller, “Why don’t you have a legal title to give me like you’re supposed to under the law?” If they can’t give you a straight answer, then just walk away. It’s a scam. Even if they have an answer that sounds good.

Seller Reliability
Look, I can’t tell you how many times our sales staff comes to us and says, “Look, I talked to this person, the sellers seem legitimate, they seem like honest people, they were a middle-class couple, everything seemed legit, but I can’t get a title.”

Seller’s Post-Sale Reluctance
Even if the sellers have good faith when they’re talking to you about buying the vehicle, it doesn’t mean later they’re going to change their mind. Once they have the money in their hand, they’re not going to do anything to help you.

Common Problems
The number of times where something comes up that is more problematic than that is greater than you think. Many times there’s a lien on the vehicle, many times there’s a title pawn on the vehicle, many times it was sold at an auction like Copart or IAA and it has a salvage or parts-only title.

Salvage Title Challenges
Even a salvage title requires a very thorough detailed inspection. Sometimes the inspection has to go to the state where the last title was from. So, if you buy a car from out of state and it’s salvage, you would have to bring it back to that state, have it inspected, and have it approved.

DMV Hurdles
I can tell you this: the states don’t want salvage vehicles back on the road. The DMVs look for any reason they can to fail a salvage inspection because their official position is salvage vehicles don’t belong on the road. They’re for parts.

Financial Gambling
Technically, if you jump through a bunch of hoops, you can get it back on the road, and it happens 50% of the time. It’ll work. But again, do you want to take your money and give it a 50/50 chance of being thrown away?

Recovery Options
Would you go into the casino and bet $7,000 on blackjack or the roulette wheel? Because that’s what you’re doing by buying a car without a title.

Steps to Recovery
If you receive incorrect or incomplete information or lost it, remember that can happen too. You buy a card and lose it, you may have the option of using a bonded title. Here are the steps: Purchase a bond, apply for a bond.

Final Advice
Remember, purchasing a vehicle without a title is a risk. Make that decision wisely. If you decide to go through with it or if you’ve already purchased a vehicle and now you’re stuck and have to do something, then you can look at these methods: bonded title, court order title, prior contact. There are other things you can do.

Regretful Buyers
Most of the people who call us that already bought a vehicle without a title wish that they could go back and not do it because it’s not worth the hassle. It’s going to take your time, even if you do it all yourself for free.

Legal Framework
You know, you don’t have to pay anybody to get you a title if it’s your vehicle. You can do it yourself. But it may take you 10-15 hours of time to research, get documents back and forth, then you have to get the runaround from DMV.

Complexities
Then you have to wait for them and hope, cross your fingers that nothing comes up that prevents that title from being issued. Sometimes there’s another title that’s already been issued that blocks your title, sometimes there’s a prior owner claim, sometimes it’s a deceased owner where that vehicle has to go into probate.

State Laws
There’s a lot of things that can come up. We could never even get into them all in a video. But that’s why the states have these laws that it’s illegal to buy and sell a vehicle without a title. They just want to keep it simple.

Research
Investigate your state. You can do research. Every state has their statutes online. Transportation code, vehicle title and registration code. This one is for Oregon, but every state has these documents.

Conclusion
But even if it is legal, you probably don’t want to do it anyways because you could be out of luck and all your money’s gone. And now you have to worry about trying to resell it to somebody else without a title and cross your fingers and hope that you find a buyer or to sell it for parts.

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