Selling a vehicle is simple, but it’s also a legal transfer of an asset. If you’re selling a vehicle, it’s important to know how to properly transfer the title. Knowing how to properly transfer the vehicle title is important when it comes to protecting yourself, as well as your vehicle’s next owner.
In most states, it’s illegal to sell or transfer ownership of a car without having a title that proves the seller is the legal owner of the vehicle. Selling a car without a title is considered fraud and can result in heavy fines and penalties. If you’re found guilty of selling a vehicle without a title, you may face jail time and hefty fines.
To avoid running afoul of local laws, make sure to get a title before selling your vehicle. The steps for getting a title for your car vary by state. However, you’ll need to apply for a duplicate title if the old one is lost or damaged. The only valid title is the original and undamaged certificate of title.
When applying for a duplicate title, you’ll likely need to provide proof of identity and insurance as well as other documentation depending on your state’s laws as well as pay a fee. Only the last titled owner of the vehicle is eligible to obtain a duplicate title. If you were not the last titled owner, you may need to obtain a title through a different method of title recovery. For more information, check out our article Lost Title? Here’s How to Replace Your Car Title.
Go to the DMV with your buyer when they transfer the title. If they don’t switch it over right away, it could create problems for you later because you’re still the legally titled owner. Your name and address are on that title and now that’s information they have access to. They may commit a crime in the vehicle and leave it, if your name is connected to the VIN, you’re going to be questioned. Or maybe they rack up traffic tickets that end up being attached to your license because you’re still the owner of the vehicle.
If you have a lien on your vehicle, you must get a vehicle lien release prior to transferring the title. If you have a lien on the title, you are not the title holder and are not authorized to transfer ownership. Selling a vehicle with a lien will create problems for the buyer. For more information, check out our article What Is A Vehicle Lien Release & How To Get One.
When selling a vehicle, take a photocopy of the title signed over and a copy of the buyer’s identification. You cannot use this to get a title in the future; only the original title is valid for this purpose. However, having made a photocopy, you have evidence that at some point you sold the vehicle, even though you are still shown as the titleholder.
To prove that the transaction took place, you’ll need to provide the seller with a bill of sale. The bill of sale is absolutely necessary, but it’s only a receipt and is not enough evidence to obtain a title on its own. For more tips, check out our article How to Write a Bill of Sale.
This occurs more frequently than you may think. Oftentimes the primary vehicle driver and the vehicle titleholder are not the same people, they may be a family member or spouse. Make sure that the person signing the title transfer is the prior owner. If there is more than one name listed on the title, everyone must sign the title transfer. The only person authorized to transfer ownership of the vehicle is the person or people listed on the title.
Selling a vehicle is a simple process, but it’s also a legal process, it’s a legal transfer of assets. You should make all efforts to make sure the title transfer is done correctly so it doesn’t come back to haunt you or cause problems for your buyer down the road.
A VIN (vehicle identification number) is a specific 17-character string of alphanumeric code that uniquely identifies a specific vehicle. Every car has its own VIN, no two cars are exactly alike. The VIN is assigned to the vehicle when it’s built. Checking the VIN can help you find out a lot about the vehicle, such as accident reports, safety recalls, salvage reports, stolen reports, and much more. The VIN is usually stamped on a metal tag and is often located on the driver’s side of the dash panel or the door jamb, or under the hood.
The VIN on most vehicles consists of 17 characters, but some vehicles manufactured in 1981 or earlier have a shorter VIN. The shorter VIN was to be phased out by 1982, but the regulation made an exception for vehicles manufactured before 1981. This allows those vehicles to be titled along with certain other vehicles with varying VIN lengths—such as certain import vehicles.
The first three characters of your vehicle identification number will tell you where the vehicle was made and in what country it was registered. The next five digits indicate the vehicle’s make, model, type of engine, transmission type, and other technical specifications. The next three digits contain the vehicle’s security digit, model year, and the assembly plant. The last six digits are your vehicle’s serial number, identifying your vehicle by trim and other specifications.
It’s important to note that even if the vehicle seems to be in working condition, some VINs are ineligible to be issued a title.
It’s not a title problem, it’s a VIN problem. The National Motor Vehicle Title Information System (NMVTIS) is a federal database that contains information about every vehicle that is ineligible for a title. Once a VIN is registered with the NMVTIS, the vehicle cannot legally be titled by any state. To enter the NMVTIS database, a vehicle dismantler or similar entity must deem the vehicle as junk and report the VIN to the NMVTIS. Similarly, if a vehicle was considered a total loss in an accident by an insurance company, that company can issue a junk or salvage brand on the title to be entered into the NMVTIS database.
Vehicles that have their VIN documented in the NMVTIS database are done so because they’ve been deemed unsafe or inoperable for road use. Unfortunately, you can’t tell if a VIN is in the NMVTIS or not just by looking at it.
A VIN check is a quick and simple process that can help you save thousands of dollars on a vehicle. There are many sites available on the Internet that provide this service for free; all you need to do is type in your VIN and the site will pull information directly from the NMVTIS database. It’s crucial to check your VIN before buying because if your VIN shows up in the NMVTIS database, you can not get a title for that vehicle. To conduct a VIN check, visit the NMVTIS website for a list of approved NMVTIS data providers for both commercial and public customers.
A vehicle identification number, or VIN, is a helpful tool for decoding and understanding more about specific components of your car. When purchasing a new or used car, it helps to know what the various components represent. Once you decode the vehicle identification number and enter it into the National Motor Vehicle Title Information System, you can be confident that you are purchasing a vehicle in good condition.
Vehicles are an essential part of life that take us everywhere we need to go, whether it may be school, work, the beach, or soccer practice. However, there are many factors to take into consideration before purchasing a vehicle. While they may seem simple and straightforward, there are a number of things to keep in mind such as pricing, dealership reviews, and vehicle reviews. Ideally, you should be aware of all of these factors when deciding on what vehicle you should buy, but there are 5 additional overlooked tips that can help you when deciding on your next vehicle.
If you plan to keep your vehicle for a long time, you may want to consider if this is the last model of the vehicle before a major upgrade. Your resale value may diminish by the new upgraded model. Many manufacturers are moving toward electric vehicles, will your vehicle be relevant in technology within the next few years?
Insurance for some vehicles may be higher due to parts. Some vehicle parts cost excessively more than other manufacturers. Most of the cost has to do with the repair expenses of vehicles. If the parts are hard to find or more expensive, your insurance will be more expensive. Sometimes certain trim levels will even have higher rates.
When you go to a dealership to buy a used car, make sure they have the title ready. If they don’t have the title on hand, it can be difficult to get it transferred into your name. Many dealers purchase vehicles at auctions and lienholders. If the title is lost or damaged, the dealer can’t apply for a duplicate title because the title was never in their name, they are simply the broker.
If you can get eyes on the title, look at the prior owner. Where did the title come from? Was it used as a company car, an individual, a bank, or a rental car company? The value and the condition of the vehicle are highly determined by the prior owner if it is a used vehicle. For electric vehicles, higher heat negatively impacts electric vehicle battery life when compared to more temperate climates.
If there’s no record of the vehicle ever being reconditioned, it could be a red flag. Ask the dealer for their own records of the reconditioning of that vehicle. Every dealership does at least something to the vehicle prior to selling it, even if it’s just cosmetic. Ask them to give you a printed copy of the repair estimate to see what they did. If they did a lot of work to it, it obviously needed a lot of work which could be a red flag depending on the year and mileage.
Ensure you go through everything before buying a vehicle. You may be under pressure to buy a vehicle now but don’t fall for the pushy sales tactics. Look at a range of vehicles to get the best reliable and well-made option. By using your best judgment and these five tips, you can feel prepared to take the next step toward vehicle ownership.
The Vermont title loophole, also known as the Vermont registration process, is a method for non-residents to obtain a title for a vehicle that is 15 years old or older using a bill of sale as proof of ownership. Vermont residents are able to use this method as well, but Vermont is the only state to allow non-residents to apply for a title in their state.
In Vermont (a non-titling jurisdiction), vehicles 15 years old or older are eligible only to receive a registration. In most US states, an owner cannot apply for a title without having the original title signed over to them. A vehicle’s title and registration are two separate documents. If the prior owner is unable to be found or has lost the title, this can present serious problems in your application process in your state. By using the Vermont title loophole, you can apply for registration in Vermont and use that registration as proof of ownership equivalent to a vehicle title and transfer it to a title in your state.
To use the Vermont title loophole, you don’t have to ever take your vehicle physically to Vermont. However, this doesn’t mean that you can get a title for any vehicle or parts using this method. The vehicle must meet all of the qualifications of an operable on-road vehicle and cannot be in the NMVTIS database. The VIN verification process is used to assist this requirement as the verifier can check the VIN against the NMVTIS database upon inspection.
According to the Vermont Department of Motor Vehicles (DMV), applicants often make mistakes when filling out the VD-119 form for vehicle registration. Many applicants select “New Title” rather than “New Registration” in Section 4 of the form, which is incorrect. Vermont is a non-titling jurisdiction for vehicles 15 years or older, so the title is not required at that time. For vehicles using the Vermont title loophole, the registration is equivalent to a title. We recommend that this form be typed and double-checked for accuracy and completeness before submitting it to the Vermont DMV. Applications that are typed and complete are more likely to be approved and processed quicker than handwritten applications.
A VIN verification is a process whereby an authorized agent physically inspects the vehicle’s Vehicle Identification Number (VIN) to confirm that the VIN on the vehicle matches the VIN on the application. If your vehicle is a motorcycle, then a VIN verification will always be required. A VIN verification can be performed by any state agency such as the state police, a DMV investigator, or another authorized agency. For non-motorcycle applications, we recommend that you include a VIN verification if you are able to do so. Motorcycles will always require a VIN verification.
A bill of sale is a written agreement on the sale of a vehicle. This document proves that you purchased the vehicle from a private seller, third party, or dealership. Your bill of sale does not have to be typed or notarized for the Vermont title loophole. For more information, check out our article How to Write a Bill of Sale.
A vehicle lien release is a document that officially removes the lien on your vehicle title. This document declares that you are free to take action with your vehicle. If your vehicle has a lien, you’ll need to have it released before you are eligible for the Vermont title loophole. For more information, check out our article How to Get a Lien Release on a Vehicle.
The book value of your vehicle is an estimate of its current market value, which you can use to apply for the Vermont title loophole. The Vermont DMV first recommends using the NADA book value first in their statutes, but not all vehicles will be featured in this book. If your vehicle is not in the NADA book, there are some other comparable places you can find the book value such as Kelly Blue Book and Galves.
The book must be approved by the Vermont DMV and the value you assign your vehicle should be as close to its actual value as possible. The higher the value, the more you will pay in taxes. Attach a copy of the book value to your application. If the value is too high, the Vermont DMV will send you an invoice for the remaining balance. If it’s too low, they may simply agree with the value or may send you a refund depending on the difference in figures.
The amount of sales tax owed on most vehicles is calculated using the clean trade-in book value of your vehicle multiplied by 6%. This might not sound like a high percentage, but if your vehicle’s value is high, the sales tax you owe could be higher than expected. For trucks over 10,100 lbs and for certain vehicles, the taxes are capped at $2,075. Taxes cannot be avoided. Vermont state statutes indicate that the act of simply applying for registration is evidence that you owe them taxes. For more information, check out our article How To Calculate Sales Tax for Vermont Title Loophole.
Vermont state vehicle registration fees are $48 for motorcycles and $76 for most vehicles and trucks under 6,000 pounds. Heavier vehicles and some other types of vehicles may be subject to a higher registration fee that can be found here.
The Vermont title loophole, or Vermont registration, is a great way for vehicle owners to get a title for an older vehicle and a bill of sale. Every state recognizes this process as the equivalent to a certificate of title and should have no problem transferring the title to your state. If you own a car and want proof that it belongs to you, you should obtain a certificate of title.
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A vehicle lien release is a document that officially declares that the lien on your vehicle title has been removed and you will be free to take action with your vehicle. This document removes any restrictions on what you can do with your car. A person is typically eligible for a vehicle lien release when the loan on the vehicle has been paid back to the lender.
Your lender, who has loaned you money to purchase a vehicle, places a lien on your title until the loan is paid off in its entirety. A lien is a claim on the property for the security of payment. When a lender loans a borrower (you) money to purchase a vehicle, they want to make sure that they are paid back plus interest. Your lender, also known as your lienholder, will remain printed on the front of your vehicle title until the loan is paid off. A lien on a vehicle title is a cloud on the title that places a hold on ownership; once it’s paid off, you can get a title for your car or you can sell it or trade it in.
The process of filing for a vehicle lien release will vary depending on your state, your situation, and your lender. However, the lien release process typically consists of the following four steps:
Step 1: Locate your lienholder
Step 2: Compile your lien release request letter and non-interest letter
Step 3: Mail your lien release request letter through certified mail
Step 4: Obtain the signed lien release letter and apply for a clear title
Your vehicle title lienholder is the lender of your auto loan. To determine who this is, check your bank records and identify the business entity that received your monthly car payments. Once this entity has been identified, make note of the mailing address, physical address, registered agent address, corporate address, and any other address listed for this entity. This information can be pulled from the lienholder’s website or through your state’s Secretary of State business entity database.
To officially request your lien be released from the title of your vehicle, you must send the lienholder a lien release request letter. In this letter, you must include the following information:
If your lienholder has no further interest in collecting on the lien and would like to legally sign off on their interests, ask them to complete a letter of non-interest. The letter of non-interest should include all of the contents of the lien release request letter and should also provide a section where the lienholder can sign away their interests.
Make copies of your lien release documents to be mailed to each one of the addresses listed for your lienholder.
Using the addresses pulled from the Secretary of State or the lienholder’s website, mail a copy of your documents to each address via certified mail. Each envelope should include:
Although mailing identical copies to multiple locations may seem redundant, it is the best way to ensure that your lien release request is received by the appropriate party. As many lienholders do not have a lien release department with staff standing by to release liens as they come in, it is important to attempt to reach as many locations as possible to reach the correct recipient or at least the recipient that has the ability to help.
When you release your lien on a vehicle title by mail, send the document via certified mail. A paper trail will thus be created demonstrating your attempt to release the lien. This evidence will prove useful if your lender cannot be located later. Most DMVs require that you send documents related to motor vehicle transactions by certified mail.
When your lienholder has released the lien on your vehicle, you can take the lien release letter and the letter of non-interest to your state DMV for processing. Before you can receive a clear title for your vehicle, however, you will need to pay all registration and tax fees as well as any title transfer fees.
Typically, your lienholder is required to release your title once the loan has been paid. Unfortunately, that doesn’t always happen. Just because your loan is paid doesn’t mean that the lien has been released; you may still have to go through the vehicle lien release process and notify the DMV of the satisfied loan.
For more information and assistance, learn more about our vehicle lien release process.
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