Vehicle salvage title requirements

So, how do you register or title vehicles with a previous insurance claim or salvage history that have been through the auction process? Many vehicles come from Copart or IAAI, and those vehicles have prior title claims or title histories that in some cases prevent getting a title or, best-case-scenario, require a lot of steps to get a title. One of those steps is to have the vehicle approved and inspected to go back on the road.

Inspection Process in Washington State
Here’s an example from the state of Washington that talks about how to get rebuilt salvaged vehicles back on the road. This is just a guide that they describe their steps. So the first thing they have to recognize is you have to do the inspection. What’s going to be inspected, right? It talks about the statute in Washington, which is RCW 4612 560. It authorizes the State Patrol to inspect certain vehicles for titling purposes, and part of the inspection is for safety to make sure that the car is rebuilt, but also to make sure that there’s no stolen vehicles and stolen parts used in the reconstruction of the vehicle. So the officer will inspect all major component parts used to construct your vehicle. Documentation must be presented at the time of the inspection to show legal ownership of the vehicle and the parts used. You have to have a title for your vehicle, but you also have to have proof of the source of the parts. This is just Washington State, but many other states, almost all other states, have a very similar or exactly the same process.

When Inspection is Required
So then, when does a rebuilt salvage vehicle require an inspection? If the vehicle has been rebuilt after the certificate of title was turned into Salvage, then a reissued title and registration requires the inspection. What parts are required to pass inspection? Major component parts are what they talk about, and every state has a list of what those are. In this case, it’s anything engines, frame, transmission, body parts like door, front differential, rear clips, quarter panel, seats, hoods, bumpers, fenders, and airbag.

Inspection Details
So when the inspector will look at the vehicle, they’re gonna look at the original damage history report from the insurance company and see what parts were damaged or missing. They’re gonna look to make sure that first of all, those parts are there and fixed to safety standards, but then they’re gonna look to make sure you have receipts to show where they came from. Please note, your vehicle will not pass inspection if any major component parts are damaged or missing. If originally installed airbags must be included in working order. So that’s what they’re gonna make sure first, that the parts are there and they’re not damaged. If you have a crashed car, you can’t bring it in crashed and say, “pass my car now.” If it’s fixed, that’s fine.

Documentation for Inspection
You need to have documentation for the inspection. You have to have the inspection request, picture identification, the certificate of title, or receipts for the component parts. The receipts must be made out to you, the vehicle owner, your immediate family member, or a licensed shop. So you can’t have a receipt that is in somebody else’s name. You have to have bought these parts. Also, the source of the parts is very important to make sure that you have correct parts from a private party. They must be presented with a signed and released title to the vehicle the parts came off or a notarized bill of sale. It’s pretty serious. You can’t just buy, you know, a fender off of Craigslist and just get a slip of paper receipt paying $50 for a fender. You either have to have the title for the vehicle that fender came off or a notarized bill of sale with the VIN number of that vehicle in that part. The notarized bill of sale must include the name, address, and number of the seller, the purchaser, the vehicle information the parts came from (year, make, model, and VIN number), and the date of the sale. They’re pretty serious about making sure that these parts aren’t stolen.

Internet Purchased Parts Restrictions
Here’s the other thing. You can’t buy parts off of eBay. Parts purchased from the internet or electronically will only be accepted for new aftermarket components. You can’t buy used fenders or used parts off of eBay and get them approved for inspection. It has to be either in person or new parts.

Purchasing from Insurance Auctions
Then it gets into if you purchased complete vehicles or parts vehicles, and they even mention the two most popular options, Copart or IAAI. If you purchase from an insurance auction, you need these documents. It gets into the inspection guide. You have to schedule the inspection. You can’t just walk in. That’s a quick guide for the state of Washington. Most states are going to be similar. Use this as a template or a guide for purchasing or fixing a vehicle that’s a salvage. Every state is going to be a little different. Some states have a very specific form that has to have each part identified with a VIN number on the form.

Auction Industry Views on Titles
So how does the auction industry view titles? Well, we’re gonna take a look at Copart and IAAI. Here’s IAAI. They follow all the titling laws. They’re having problems with titles too, right? They’re finding that they’re having to support there’s a legislative update February 2020 written by IAAI. Okay, they are introducing bills. These bills were introduced on behalf of IAAI, allowing insurance companies to apply for titles because many times the insurer will ship these cars to IAAI or Copart and try to auction them off and then never have a title. The buyer can’t do anything with it, and they just stack up on the lot at Copart and they can’t do anything with them, and it takes up space. Copart can’t get titles for them either. We deal with Copart all the time as far as getting titles, so they’re trying to pass laws that would allow salvage pools to attain ownership documents if the vehicle is abandoned at the salvage pool, right? And this only applies to salvage pools.

Legislative Efforts and Challenges
So here’s IAAI, and in this particular example here, Kansas House Bill 2501. Well, it’s so serious that Copart actually gave testimony to try to pass House Bill 2501 that talks about the vehicles abandoned to Copart. We have a vehicle which charges have incurred, there’s no title left on our facility, and they can’t dispose of it. This is a major problem. So here’s the same exact scenario that buyers run into, that even the auctions themselves have difficulties getting titles for the vehicles.

Summary and Recommendations
To make a long story short, if you’re buying a car from Copart or IAAI, expect that the title’s not going to be a clean, clear title, and it’s going to be subject to difficulties of getting a new title in your name. Difficulties could be getting it inspected. Sometimes to get an inspection, if you go back to the rebuild salvage requirements, in order to get an inspection, you have to have a certificate of title to show you bought the vehicle. Well, if you don’t have that, you can’t even get the inspection, but you can’t get a title without the inspection. So it’s kind of like a catch-22. There may be other ways that you can request ownership information. The state of California talks about how to register a junk vehicle if you don’t have the title. You may be able to do a statement of facts in order to prove ownership. Proof of ownership could be a junk receipt or a reassignment form. If you don’t have that, you can use different types of statement of facts. It’s kind of like an affidavit of ownership, but this is what California does. I’m talking about junk and salvage vehicles.

Conclusion
Either way, the Copart or IAAI salvage vehicle is going to have problems getting a title because there’s a history established for that VIN number in a federal database. That’s going to require you, best-case-scenario, to have the vehicle inspected, show all the parts receipts. Sometimes even doing that won’t get you a title if it’s been determined to be a junk vehicle. So do your due diligence when you’re buying a vehicle, either directly from Copart, through a broker, or even through a third party that’s purchased it. If you have any questions, you can reach us at our website at cartitles.com.

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How to get a vehicle lien release from closed lender

In many instances, the reason why there is difficulty obtaining a lien release for a motor vehicle is that the lender is either out of business or cannot be contacted. A lender out of business or a lien holder that apparently is not operating could seem to be a pretty big obstacle to getting a title. We’re going to walk you through how we perform that project within our company and you could do the same thing. It’s a pretty straightforward process.

Researching the Lender
So the first thing we do is research that particular lender. Even if they’ve gone out of business or ceased operations, a financial institution or lender typically does not close or close down, even though outwardly it may appear they’re not operating or their phone numbers disconnected. Even if their corporation has ended, there is usually a successor entity or corporation or a registered agent, either one of which can execute a lien release.

Example of Ecsta Bank
Here’s an example we’ll walk through of finding the correct party who’s authorized to sign a lien release for a long-since-paid-off loan. Here’s a bank we pulled up. Here’s an example of the document that our investigative researchers create when we’re getting a lien release for a closed bank. This bank is called Ecsta Bank, and we even have their old logo. If you notice, the first line says inactive as of 1996. That was a long time ago, and just to jump ahead, we’ll show you where we gather this information and where you can research this so you can do this on your own. The information provided will show you what happened and why they’re no longer active.

Mergers and Successors
Usually, this is due to a merger. The reason it says without assistance is that the federal government, in some cases, will assist a bank or a financial institution to merge or to fold or to become associated with another financial institution. They do that because the federal government guarantees most banks through the FDIC or some other guarantor program. So it’s important to note whether it’s with or without assistance. We’ll get to that in a little bit of time. You’ll find that the successor bank initially was North Fork Bank, and it’ll give the headquarters and the street address. But if this bank was inactive as of 1996, it’s unlikely that the bank or any successor is located at this address 30 some odd years later.

Detailed Bank History
Then there’ll be some basic information about the bank, such as when it was established, FDIC insurance, their FDIC certificate number, what type of bank it was, what their assets were, the history, and then it goes through the timeline. This is all the information that we chain together because each step is important to get to the final result of who can sign. Now you can’t jump to the end; you have to go step by step in this chain of ownership, chain of title. In 1907, it was established as Bank of Suffolk County, changed name to Ecsta Bank in 1980, and acquired another bank. You’ll see a lot of banks will have acquired other institutions along the way, changed trust powers to a certain format, and then here’s an important event, which is why we highlighted it. In 1996, they merged into and subsequently operated as part of North Fork Bank.

Further Acquisitions
What was formerly Ecsta Bank is no longer operating as Ecsta Bank; it’s North Fork Bank. If that was the end of this chain of events or the end of the story, that’s who you’d contact. But it goes on from there. That institution now known as North Fork Bank acquired Home Federal Savings, acquired Reliance, acquired Jamaica Savings Bank, and was reorganized (which just means that their stockholders probably changed). They acquired the Trust Company and acquired Greenpoint Bank. Then here’s another important event: in 2007, it merged into and subsequently operated as part of Capital One. Everybody knows Capital One, right? It’s on TV every day: “What’s in your wallet?” So here you go: here’s Ecsta Bank, not operating since 1996, operated as part of Capital One. That being said, Capital One can now sign a lien release for this bank.

Requesting a Lien Release
We’ll get to exactly how to go about doing that momentarily, but this is the chain of events and how you put it together to get to the current authorized person to provide a lien release. You can get all this information on our website, cartitles.com, as well. But this is walking you through it. Since then, they acquired some other banks, but it didn’t change the name. For example, they acquired Chevy Chase Bank. Chevy Chase Bank is now operating as Capital One also, so that’s not who you would contact. You’ll see later that they acquired some other institutions, such as Superior Savings and Chevy Chase Bank, but even though those occurred after the 2007 merger, those entities would not be authorized to sign for Ecsta Bank because they’re now doing business as Capital One also. They were acquired by Capital One. So that’s where that chain of events goes to.

The Process of Obtaining a Lien Release
The easy answer is to go to Capital One and request a lien release in a very certain way. You can’t just say, “I want a lien release for my car,” because they’re not going to be able to find it if you don’t give them more information. Where does this record series come from? Well, there are two sources. You’re going to find the FDIC (Federal Deposit Insurance Corporation). You can see part of their online resources here. You can research the chain of events for bank ownership at the FDIC. You can also look at the Secretary of State. Here’s an example of a bank; this has nothing to do with the prior search, but in Florida, here’s a First Savings Bank. It’s an active bank; it has their address. It also has what’s called a registered agent. So if this bank ever became non-operating, this registered agent may still be active to sign on behalf of the bank. You’ll also see officers, such as the executive vice president. Even if the bank becomes non-operable, one or more of these parties may be available to sign lien release documents.

Additional Resources
These are the two places you start with a search. Again, our investigative researchers have access to other investigative tools, but typically, this is where you’re going to start to find out who the lien holder is. On our website, cartitles.com, you’ll see a page that’s a resource page. Right up here on the right-hand side, you’ll see resources. It’ll have useful links, every state DMV, all the forms for every state, duplicate title links, and prior owner search links. At the very bottom, there’s a section for lien release links. These are all the major lenders that are very common to request lien releases from. These are currently operating lenders, so if your lender is closed, you may have to go through this process.

Completing the Form
Obtaining the lien release, once you’ve discovered who the lender is, goes like this: first, you get the actual form. Here’s an example of the form for the state of California. Every state has a different form, and you’re going to want to use the form for the state where the title is coming from or where the title was issued. What you want to do is fill out the form yourself. Fill in the vehicle identification number, the model, the registered owner, the name of the bank, the lien holder, and you want to send it to that lien holder by postal mail. You don’t want to call them, you don’t want to email them, and you don’t want to fax them because the DMV at some point is going to need the original document.

Mailing the Form
If you call the lender, you’re leaving it to them to find this form, fill it out, and mail it to you, which they may never do, or they may lose it or forget about you because it was all on the phone. It’s all verbal; there’s nothing documented. You want to fill out this form in advance and mail it to them. In fact, we recommend sending an envelope in what you send them with your return address on it with a stamp so they can easily mail it back. You’ll get it back quicker. No one’s going to leave it on their desk because they can’t find the stamp from the mail room or print out an envelope. You’re going to make it very easy for that person to get that lien release back to you. For the cost of a stamp on an envelope, it’s worth it to have that sped up. That’s how we do it as a title for our clients. You could do the same thing: look up the information, mail a lien release.

Letter of Non-Interest
One last little note: in addition to sending a lien release document, you also want to send what’s called a letter of non-interest. For example, if you go back to the example of Ecsta Bank, you contact Capital One and ask them, “Hey, I need a lien release for my vehicle from Ecsta Bank back in 1990.” If they do not have the records on computer or microfilm and cannot find them easily, they may not be able to send a lien release because they can’t see that it was paid. However, they can send what’s called a letter of non-interest saying, “We don’t have any interest in this subject vehicle with this VIN number,” and that may be the alternative. That letter of non-interest is equally valid with the DMV. You want to give them that option because if they can’t do a lien release, instead of being stuck and not getting a response back, they have the option of sending you a letter of non-interest.

Conclusion
This is the process we use to obtain lien releases for clients. You can do the same thing, or if you have us do it, this is what we do, so it’s fully transparent. If you have any questions, you can reach us at our website, cartitles.com. There’s a whole section about lien releases, how it works, what the details are, and we’re glad to help. Of course, our customer service department is available for calls anytime we’re open. If you have questions, there’s a huge FAQ. Remember that the resources section of our website has every form, every document, and every link to every state DMV that you can imagine. We’d be glad to help you.

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Mechanics Liens & Abandoned Vehicles Under Attack

Difficulties Faced by Towing Companies in Handling Abandoned Vehicles and Mechanics Liens
So how hard is it for towing companies to get abandoned vehicle mechanics lean well so hard that they have to pass a new law that says tow companies can take your license plate off your car. You might think that well if you tow a car you should just be able to auction it off or do an abandoned vehicle.

The Problem with Fraud in Mechanics Liens and Abandoned Vehicles
Well here’s the problem: there was so much fraud with abandoned vehicle and mechanics lean applications that all 50 states DMV departments have cracked down on mechanics leans and abandoned vehicles. A lot of people were using that process as a way to get titles for vehicles they weren’t supposed to have titles for or that they should have used some other process. So many states shut down their entire mechanics lean and abandoned vehicle processing.

Legislative Changes in Response to Legitimate Needs
So in some states, this happens to be in Oklahoma, they have to pass a law to let the legitimate towing companies do something to be able to get their money back because these cars are piling up on the lots.

Challenges Faced by Towing Companies and Automotive Professionals
We work with dozens and dozens of towing companies and Automotive professionals and they tell us all the time that all of their mechanics lean applications are rejected and kicked back for very small details and technicalities because the state really doesn’t want to give them out. They know there’s a lot of fraud going on. There are people on Craigslist online on these scam websites offering to do mechanics leans to get you a title when really that’s not what happened to the vehicle.

Precautions and Potential Rejections
So before you think about Abandoned, before you think about mechanics lean, make sure that you look into the details. It’s very likely that your application will get rejected. States are doing it all the time and they might even flag the applicant to be investigated to make sure they’re not flipping cars or doing a whole bunch of these fraudulent mechanics liens or abandoned vehicles.

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Will The Vermont Loophole Be Rejected?

Awareness of the Vermont Loophole
Before you start the process of using the so-called Vermont loophole in order to get a vehicle title, be aware that you may have a problem switching that Vermont registration over to your state. And why is that? Well, first of all, the document you get from Vermont is not a title; it’s a registration, not a title, and it’s going to have your name and address on it in the state where you live. It won’t have a Vermont address; it’ll have your name and address on it, let’s say, in Indiana, wherever you live. Now, what you’re, in theory, going to do is you’re going to bring that to your state to say, “Look, this is my ownership proof. I want to get a title.”

Potential Issues with State DMVs
Most of the time, that’s going to work. However, if the particular agent, the office, the location, or even your entire State DMV is suspicious of this because, “Wait, you have a vehicle that you just got a registration for a month ago. You live in this state where you’re getting the title. You don’t live in Vermont, and this vehicle was not last titled in Vermont,” they’re going to put a red flag, and they may do some other research. It may turn out that you get your title, but it also may turn out that they make you jump through a bunch of hoops, give you a hard time, and reject it. There are some states that just flat out reject it. Those states usually rotate, meaning that there’s usually two or three states that, at any given time, reject them, and then later on they change their mind, but then another couple of states do it.

Historical Rejections by States
For example, last year, there were signs in the Indiana DMV right on the window that said, “We don’t accept Vermont registrations, period.” Those signs are now gone. There was a time when the state of Hawaii just flat-out rejected them; now they accept them. Recently, there were reports that the state of Florida didn’t reject them, but they said if you have a Vermont registration, you have to have these other documents.

Challenges in Verifying Acceptance
Now, a lot of times you might think, “Well, can I find out in advance if my state’s going to accept it?” Well, the problem with that is even if you ask a representative or an agent or a clerk at the window of your DMV, “Hey, can I bring you a Vermont registration and get me a title?” that’s all hypothetical. The person you talked to on that day may not know the answer to the question. They might say, “No, it has to be a title,” when in fact it would have worked, or they might say, “Yeah, no problem. If it comes from another state, we’ll do it,” but then when you actually bring them the registration two weeks later or three weeks later, there might be a different person, or they might have a different policy. So, you’re not going to know in advance; you just have to try if you want to go that route.

Importance of Proper Documentation
When you try, you want to make sure you have all the paperwork done correctly. For example, like we mentioned, in Florida, they require extra documentation to get a title in Florida if you’re bringing them a Vermont registration. If you bring them something from any other state, it flies right through. Bring it from Vermont, they put extra scrutiny on it because they even use the word fraud. They have a bulletin that says, “We’re worried about people using this Vermont registration for fraud,” right? Because some people do.

DMV Skepticism
So, you want to make sure that you recognize that any DMV is going to be skeptical of a Vermont registration because they know the deal. This loophole is not a secret. If you know about it, the DMV knows about it. This has been going on for 20 years, so any DMV that sees it, they’re going to say, “Wait a minute. Let’s take an extra look at this.” Do you want to use a process that’s going to make the DMV even have more scrutiny on your file? As you know, the DMV is a government agency; there’s bureaucracy there. It’s already hard enough to get a title. Do you want to make it harder by bringing them something that they’re going to be suspicious of?

Alternative Methods
The reason I say that is because there are other methods you can use to get a title. Our website lists them all out. You may look at all those and still say, “Well, I want to do Vermont anyways.” That’s fine, but don’t disregard the other methods just because you think Vermont is a magic bullet that’s going to fly right through. The states that get Vermont registrations very frequently will put extra attention on your file because they think you might be trying to avoid something by going to another state. They’re going to look at your registration and say, “Look, you live in Texas. You have a Texas license, Texas address. This vehicle is from Texas. Why did you suddenly get a Vermont registration and then bring it right back? It doesn’t make any sense. There must be something else going on.” So, they might do some extra research, and whether or not that’s something you want to do, that’s up to you, but be aware there’s other methods that might be more direct, that might be more straightforward.

Vermont Sales Tax Consideration
Also, don’t forget the fact that if you go through Vermont, you have to pay Vermont sales tax, which is a big, big bill because they base it on full retail book value, and your car might not be retail condition. It doesn’t matter; they’re still going to charge you retail book value, and that expense you have to factor in as well. So, the Vermont process is notorious and famous, and people do it all the time, but don’t jump right into it just because that’s the only thing you’ve heard of. Do your research, be an informed consumer, use our website as a free consumer resource, and that way you won’t get forced into doing something that might not be in your best interest in the long run.

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$1000 Car Payments Are The New Normal

High Car Payments: A New Norm?
You can sleep in your car but you can’t drive your house — why would somebody pay a thousand dollars a month for a car payment? Do you have a thousand dollar car payment? Let us know in the comments what you think about a thousand dollars a month for a car payment.

Rising Costs and Long-Term Loans
According to Axios, thousand dollar car payments are very common now. Car payments look like mortgage payments. Well, that’s not true. They look like what mortgage payments used to look like. Now, mortgage payments are three thousand dollars, not one thousand, because the interest rates and the prices are higher.

Increasing Percentage of High Payments
According to the article, twelve percent of buyers who finance their new vehicles in June have payments of at least a thousand dollars. That’s up from seven percent in ’21 and 4.6 percent in 2019. Look, that’s double just in two and a half or three years. And we’re talking about long-term loans — 36 percent of borrowers had loans 73 to 84 months. That’s six, seven years. Gone are the days of three or four-year car loans because new car vehicle prices are averaging forty-seven thousand dollars.

Understanding the Math Behind High Payments
So why are car payments that high? How do you get to a thousand dollars a month? Well, it’s not that hard. If you want to calculate the payment on a motor vehicle, use the number two. Use a factor of two. What does that mean? Whatever you’re borrowing, whatever the car cost, multiply that number times two, and that’s your car payment. So if you have a fifty thousand dollar car, times two is a hundred thousand. Take the first four numbers — that’s a thousand. That’s it. You can figure out a car payment on any car very quickly.

Considerations on Affordability
Now, that’s figuring about a five percent interest rate on a five-year loan. So if you’re doing longer terms, the payment might be a little lower, or if the interest rate’s higher, might be a little higher. But the easy way to make a car payment is times two. Just multiply times two.

Moral and Financial Questions
So a thousand dollars a month really isn’t that surprising if cars are fifty grand. A fifty thousand dollar car is gonna have a thousand dollar car payment for five years. The question is, now that’s just the math part, that’s not the right or wrong part. The question is, is that right or wrong? Should you be spending a thousand dollars a month on a car payment?

Comparing Costs: Car vs. Home
Well, in order to have a thousand dollars take home, you probably need to make 1400 before taxes a month just for that car payment. Right? That’s 350 a week just for your car payment. That doesn’t account for insurance, gas, taxes, any other things that go into it. For most people, by the time you add up all the expenses for a new car, you could be talking two grand a month by the time you figure insurance, taxes, and gas for that car, or close to it. It’s a lot of money.

Shift in Economic Reality
How does that compare to a mortgage? Well, a mortgage payment on a house in 2017, an average house was two hundred, two hundred and fifty thousand with a three percent mortgage, you could be a thousand dollars a month for a house a few years ago. Now, you’re probably going to be twenty-five hundred a month for a house. But in three short years, four short years, a thousand dollars went from buying you a house to live in to a car. That’s a significant difference.

Financial Strategy: Old vs. New Cars
What does that mean? Well, if you have an older car that has no car payment, you’re saving a lot of money. You might be saving fifteen, twenty thousand a year. You might have to spend a little more on maintenance, but as long as it’s a pretty reliable car, may not be the worst thing in the world. What about if you have a car with an existing payment that’s three hundred or four hundred or five hundred? You might want to hang on to that car because when you trade it in to get a new car, you could be facing a thousand dollars.

Engagement and Feedback
What are your thoughts? We’d love to hear your comments about what is your reaction to seeing a thousand dollars a month. Have you shopped for a car lately? Have you seen thousand dollar car payments? You know, it used to be that you saw ads on TV and in the newspaper for car dealers advertising no money down, one ninety-nine a month, no money down, two hundred a month, whatever for a car. Those days are gone.

Market Realities and Consumer Accessibility
And they would have thousands, hundreds of cars on the lot. Now there’s not cars in a lot. What most people say is that although there appears to be a steady stream of affluent consumers, most consumers, the new car market is growing increasingly out of reach for most consumers. The new car market is out of reach. Same thing with houses. Who would have thought that a new car was out of reach for most consumers? That means used cars are the wave of the future. Maybe electric cars.

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