Car Dealer Sales Tactic Under Review

So there’s a tactic that some car dealers use that has been going on for a long time. We’ve seen this back 30 years ago, 40 years ago, and it’s come up in the news quite a bit recently. It’s a way that dealers can do something kind of underhanded, almost invisible, that might put your purchase at risk and in jeopardy. It’s called a bailment agreement. Some people call it yo-yo or be-back or comeback. Basically, what happens is when you purchase a car and you drive off the lot, there may be an option where the dealer can call you back and leverage you or coerce you or blackmail you into giving them more money after you already bought the car. They can make you come back with more cash, they can make you come back and make your payments higher on the car, or even give you a different car.

How the Bailment Agreement Works
How can they do that if you already drove off? Well, it’s a very common practice and it’s invisible; you almost don’t even know what’s happening when it’s happening. The reason we’re bringing this up now is because Jalopnik had a really good article about this just today. Even Steve Lato, the high-profile YouTuber, and attorney, talks about it again. Dealers’ worst tactic under fire. In fact, in this video, he says his first video on his channel was about this tactic many, many years ago. So it’s coming up again because, for a while, it was kind of out of favor, but now it’s being used more.

The Financing and Spot Delivery Process
How does it work? When you go in to buy a car at a dealership, you have to sign a bunch of documents. You have to sign a buyer’s order, a bill of sale, an odometer statement, a car loan if you have that, and you sign this big stack of papers and you drive off the lot. Well, the way dealers do financing is they do what’s called a spot delivery or on-the-spot delivery. Meaning that when you come in and you want to buy a car, they want to get you out the door in that car right then. They don’t want you to go home and think about it and have them get all the paperwork ready and come back later because you might change your mind. So they want to do a spot delivery to get you over the curb with that car right then.

Dealer’s Financing Strategy
So how do they do the financing? Well, they’re going to take your application and submit it to their lender, or maybe more than one lender, and they’re going to try to find the lender that has the highest advantageous financing for you but even for them because they’ll get a kickback. They’ll get a commission on that financing and they may want to find the dealer that has the best kickback. But not everybody gets approved for financing, so they want to make sure that if they give you that car and let you drive home, if for some reason the financing does not get approved, you have to bring the car back. And that’s legitimate.

Legitimate Use of Bailment Agreements
So mixing that paperwork is what’s called a bailment agreement. And that bailment agreement basically says if my financing does not get approved, I will bring the car back immediately upon request, and they’ll give you your money back and your trade-in back, and they’ll basically undo what they did, right? That’s a legitimate, fair thing. Now we’ll talk later about whether or not you should even do that bailment agreement, but that’s what the dealership does and how to avoid this from happening.

Common Issues with Financing Approval
So what happens is that the dealer sends your application out to some lenders. They pretty much have a good idea of how you’re going to get approved. They see your credit score, they see your income, your pay stubs, whatever the case might be, and they know, okay, this person qualifies for this type of financing. But what if they guess wrong, or what if the lender doesn’t approve it the way they want to? Maybe you got approved but for a higher rate, maybe you got approved but for not as much money. They might have been trying to finance a higher amount of money than the bank’s willing to approve for you or for that car.

Consequences of Incorrect Financing Assumptions
Now they get the call back a couple of days later from the bank and your approval didn’t come in the way they thought it did. And they say, wait a minute, you have to come back in and put more money down. You have to come back in and sign up for a higher payment because your rate is higher. That’s not fair. Well, here’s your bailment agreement; you signed it, or you didn’t get approved at all, and you have to bring the car back or maybe switch to a lower-priced car. So this is something that dealers will put in every deal if you’re getting a spot delivery.

Avoiding Bailment Agreements
So how can you avoid this? Here’s what you do. First of all, do not sign a bailment agreement. If you’re buying a car at a dealership and you’re financing, wait until they have their financing done to pick up the car. If you’re in the dealership and they make an agreement on numbers and you’re financing through the dealership, unless they have the financing already approved and done the way that you have it structured, just tell them, hey, call me when you get it done. It’s not going to take them more than a day, maybe two. If you want to leave them a deposit to hold the car, that’s fine. That’s not much at risk.

Benefits of Avoiding Spot Delivery
Well, here’s what it’ll do, even if you’re not worried about getting declined for financing or rejected. It’s still a good idea. Here’s why: Let’s say, for example, you do your deal, and they put you in as like an a-tier financing or a very low rate or low monthly payments, and it doesn’t come in that way. Now they have to readjust it, and they have the option to do it. They have the leverage to do it. If they do something with a low price and then decide later, wait a minute, we made a mistake, they can bring you back in to fix that mistake.

Real-Life Example of Bailment Agreement Issues
We’ve seen this happen. We had an example where a customer went into a dealership to buy a car. It was late at night, finalizing the deal. They negotiated, and they got a really good deal on this car, and it was a lease deal. And the dealership figured the price of the car with incentives from the factory, like rebates. This was back in 2017 or 18 when there were incentives and rebates on the car. And they also did a lease deal which had incentives on the lease. They had a lower rate for the lease, and they figured the payment up. It was a really good deal. They delivered, they spotted the car, and the customer said, no, I don’t want to do this bailment agreement. Just call me when the deal is ready.

Customer Leverage and Dealer Mistakes
So they didn’t take the car that day, that night. They said, you know, if you have to wait for the financing to be approved, I don’t want to take a car that I’m not approved for yet. It’s not a done deal. So let’s wait till the next day. So the dealership called back, and they said, well, it might be a little different. So the customer said, forget it then. That’s the deal I thought I was getting. If you can’t do the deal, that’s fine, and they were going to go look somewhere else. Finally, the dealership said, okay, fine, we’ll do it. And they came back in, and it wasn’t that the customer wasn’t getting approved because they had very good credit. It was that they had miscalculated the numbers. The lease deal incentive and the rebate incentive, you couldn’t do them both. You could either do the incentive or do the lease deal. The dealership made a mistake, and they used them both when they figured out these numbers.

Importance of Not Taking the Car Immediately
If they had done a spot delivery, they could have called them back and said, hey, you gotta come back and pay a higher payment, especially since it’s been two or three days. You’re driving the car, you’re enjoying it, you’re not going to undo that deal. But since you didn’t take the car yet, you actually have more leverage now because you don’t have to go back to the dealership. You’re more likely to go back and redo that paperwork if you already have the car in your driveway, in your garage, driving it around, whatever you’re doing because you don’t want to give back a car you already have. But if you didn’t do the deal in the first place, now you have leverage.

Final Advice on Bailment Agreements
So what the dealership had to do was they actually had to sell the car for a lower price, probably than they even could have. It was probably a below-cost deal in order to make those numbers still happen because they didn’t want to lose the customer and also have a bad review for that transaction. To make a long story short, if you’re buying a car and the dealership has mixed in that paperwork a bailment agreement or some agreement where you have to bring the car back, call foul on that deal and tell them that you’re not going to do it. When you have the financing done and you know you can do this deal, call me and let me know, right? And I’ll do it then. I’m not going to do speculation with you as a dealership that you think you can do this, but maybe you can’t because I’m committed to it. You don’t have the option of bringing the car back, right? The dealership is doing an unfair advantage to you where they have the option of undoing the deal, but you don’t. So you want to level the playing field. If they can’t commit to the deal and know that it’s going to be completed and etched in stone, then you shouldn’t have to be locked into it either. So unless they’re willing to say, well, you know, you have the option of bringing it back too, then why would you do that? Because it’s not a level playing field.

Conclusion: Be Cautious with Bailment Agreements
So this has come up a couple of times. We saw these two on Jalopnik and Steve Lato. It was also in a Car and Driver article. It seems like dealerships are doing it again. Again, it was very, very popular in the 80s and 90s, but it appears that dealerships are starting to maybe mix this back into their playbook, and you want to avoid it so you don’t run into a problem where you’ve had the car for a few days or a week, and they tell you you have to bring it back, pay more money, or have a higher payment. Don’t worry; there’s plenty of cars to go around, so if for some reason you can’t get that one, somebody else will do that deal for you.

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Think Twice About The Vermont Title “Loophole”

So if you have a vehicle with a title problem you’ve probably heard a lot of information online about how you can get a title. You may have heard about the Vermont loophole, or abandoned vehicles, or mechanics liens. We’re going to talk about why there’s some serious problems with one information you may have heard online. Some of these are urban legends, some of them are people that talk on chat boards about things they know nothing about, and some of these things either don’t work, or some of them could get you into big trouble. So you want to make sure you’re actually getting correct information about how to get a title and you don’t fall for one of these tricks or loopholes that either doesn’t work or it’s going to get you in trouble.

Overview of Title Issues
We’re going to talk about mechanics liens, we’re going to talk about abandoned vehicles, and we’re going to talk about the Vermont loophole and what the problems with those are and why you want to be very, very careful before you jump into one of those or pay anybody to get you a title if they’re going to use one of these methods and you know what you’re getting into. At the end, we’re going to talk about what are the things you can do to get a title and that you can do yourself. You don’t have to pay anybody to do this if you don’t want to and what’s going to work and not get you into any kind of jeopardy.

The Vermont Loophole
First of all, let’s talk about Vermont. For 20 plus years, the Vermont loophole has been kind of an urban legend. People have talked about it on chat boards, on the internet, there’s been articles written about it. Even some very high profile automotive publications like Jalopnik and Hagerty have talked about this loophole, and it has some validity. Basically, what you do is you apply by mail to the state of Vermont to get a registration and then you take that and exchange it in your state for a title.

Issues with the Vermont Loophole
Why does that help you? Well, if you don’t have a title or a legal document in your state, this Vermont registration is a version of an ownership paper that you can use as a loophole to get a title in your state. What’s wrong with that? Well, what’s wrong with it is first of all you have to pay tax to the state of Vermont. The tax is always going to be more than you want to pay. It’s going to be more than you think it is because you might say, “Well, I have an old car, it’s not worth much because it’s in bad shape.” But Vermont is going to look it up in a very high book value and charge you a lot of tax based on that book value.

State Reactions to the Vermont Loophole
More about that in other videos, but even if you do pay that tax and even if you do get that Vermont registration, you still have to bring it to your state to exchange for a title. Look, this is not a big secret. You might have just found out about this Vermont loophole yesterday and you might think it’s a big revelation and you’re in on some big secret, but guess what? It’s been going on for 20 years. Every single state in the country knows about this. All the DMVs know about this. Some of them give you a hard time, some of them reject it, some of them tell you you’re doing something wrong, but they still have to accept it because it’s a legal document from Vermont. Some of them are a lot more aggressive than that.

Example: Florida DMV
Here’s an example. Florida has an official publication at their DMV on their website: information notice fraud alert Vermont registrations. They’re calling it a fraud. Now they’re not saying every one is a fraud, they’re getting your attention with the headline. What are they saying? The Florida DMV has been informed that in lieu of a title, the Vermont Department of Motor Vehicles will issue a registration form of ownership. That’s true. They are a non-titling jurisdiction. They don’t give titles on vehicles at all. They only give a registration. Now of course this only works if the vehicle is 15 years old or older. So right now it’s 2023, that means a 2008 and older this works on.

Florida DMV Requirements
So what happens is people are using this as a loophole. They’re saying, “Wait a minute, I have a car or truck or trailer, motorcycle, whatever, and I’m in Florida or Texas or anywhere and I don’t have a title. I bought it, I lost a title, I never got one from the seller. So instead of… I went to my DMV and they said forget it, you need to have a title. So what I’m going to do is I’m going to go to Vermont by mail. You don’t have to physically go there, but I’m going to apply by mail, get a registration and then sneak it in the back door of my DMV to get a title.” Well, your DMV knows about this, right? It says in many instances the registration ownership is being issued to persons who did not present a title to Vermont, who do not live in Vermont, nor were the vehicles ever located in Vermont. So this is the Florida DMV, right? They’re saying we know that the person who has this registration never had a title, they don’t live in Vermont, and they did not bring the car to Vermont. So they know this, they’re not stupid.

Florida DMV Additional Requirements
So what does that mean? Customers are appearing in Florida attempting to use the registration forms as a proof of ownership. This alternate proof does not offer the same safeguards as a traditional title, which it doesn’t. That’s why it’s easier to get because it doesn’t have the same demands that getting a title does. It’s easy to get this registration from Vermont, it’s hard to get a title. Due to the possibility of fraudulent transactions, they’re not saying it’s always fraud, but due to the possibility, effective immediately, additional documentation is now required when a Vermont registration is submitted to obtain a Florida title. So they’re going to make you jump through a bunch of hoops, right? Florida residents who purchase a vehicle must provide the following: title and sales tax. So you have to pay tax twice. You already paid it to Vermont. Most states let you not pay the tax again in their state if you show you paid it to Vermont. Florida says you have to pay the tax again in Florida. You have to have the original registration, no copies. You have to have a Vermont residence address, which you’re not going to have. You have to have a bill of sale with all the same information reflecting the seller. So they’re going to make you jump through a bunch of hoops because they know that there’s a possibility that some people are using this to get titles for vehicles they’re not supposed to get.

Conclusion on Vermont Loophole
So in conclusion, effective immediately, all transactions with the registration must follow these instructions, this fraud alert instructions. So this is just one state, this is Florida. Other states have sometimes similar procedures and sometimes it comes and goes. This just came out less than a year ago, right? There was a period of time where Indiana didn’t accept these at all. They had a big notice in their window of their DMV saying don’t bring us any Vermont registrations, we’ll throw you out. That went away, now they’re accepting them again. Florida at some point might change this. Different states at different times have gone through periods where they didn’t like this. What does that tell you? That tells you is there’s some resistance to it.

Bonded Title Process
So why not look at some other things? Well, what else does, let’s say Florida, offer? Really a lot of states offer what’s called a bonded title. This is a bonded title bulletin. We’re going to keep it consistent here, we’re going to look at Florida, but many states have a bonded title process. What does a bonded title mean? A bonded title means you don’t have the proper old title for the vehicle and in order to convince the Department of Motor Vehicles that they’re able to give you a title, you give them what’s called a surety bond affidavit. What that means is you sign an affidavit saying how you got the vehicle, right? You have to tell them, “I bought this car on Craigslist, I didn’t get a title, I got a bill of sale.” So you tell your story, you can hand write it on a piece of paper. And then what you have to do is you have to get a surety bond from a bonding agent that backs you up.

Details on Bonded Titles
So what you’re saying isn’t true, the Florida DMV is going to take your word for it, or any state that does bonded titles, but they have a backup meaning that if you’re telling us a lie, then this bonding company is going to fix the problem, right? It’s going to cost you some money for that bond, probably cost you a hundred dollars, maybe 200 for a bond. Now there are some other restrictions. Look at the first couple of segments: Vehicles eligible for a bonded title, vehicle is not eligible for bonded title, and what is required. Well, let’s take a look at vehicles eligible. Bonded titles may only be issued for vehicle truck wing less than eight thousand pounds, vehicle has a Florida current paper title, meaning that if the last title came from out of state, no good, and also model years. So the vehicle has to be more than 10 years old but not more than 30 years old. So in 2023 that means from 2010 to 1994, right? So if you have a vehicle that’s newer than 2010, no good. If you have a vehicle that’s older than 94, no good. It has to be in between those years. Every state has some different rules, but you have to realize that bonded title is going to have some restrictions.

Restrictions on Bonded Titles
What kind of things are not eligible? Well, let’s look at the first one. Bonded titles can’t be issued if it has the word replica or homemade in the title. Meaning that if you have a kit car or something you made from parts, you can’t get a bonded title. If it has a VIN plate removed or destroyed, can’t get it, right? You can’t have a salvage vehicle that you can’t get a bonded title for. Some states will let you, but if it’s a salvage vehicle, no good. If there’s an active lien, no good, right? Meaning that if somebody has a loan on it. And it cannot be declared by the DMV, which means that in some cases they’ll let you get one, in some cases they won’t.

What is Required for Bonded Titles
So what do you have to do to get one? We just mentioned the vehicle affidavit. We talked about the surety bond affidavit. You also have to get an HSMV 82042 form. You get this right online from the DMV website. It’s just a one page form you fill out. And you have to do an inspection. This is a document that gets filled out by a law enforcement officer or in some states the DMV does the inspection. They’ll come out, take a look at the car, and sign it off. Then you pay your money and you get a bonded title. So this is something that most states offer. This is an example from Florida, but you can get a bonded title in most states if you don’t have the proper paperwork for the vehicle.

Summary
So that talks about the Vermont loophole, it talks about the bonded title process, but there’s other ways you can get titles, you can talk to DMV if you have any other questions.

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Title Loophole Options Instead Of Vermont?

So if you’re a car collector or automotive enthusiast, you may actually purchase vehicles like on Craigslist or barn finds. Occasionally, you could come across vehicles that don’t have a title. For many years, there was a Vermont loophole that people used all the time to get titles. You’ve seen it featured on Hagerty Insurance, Car and Driver, Jalopnik, and even on our website. Car Titles has talked about this Vermont title loophole, and it was available for 15, almost 20 years as a way to get a title if you’re missing documents. However, in June of 20123, the state of Vermont, under pressure from many different states’ Department of Motor Vehicles, cancelled and closed that loophole. So, you can’t use it in order to get a title when you’re missing paperwork.

New Title Process
So what do you do now? What’s the new loophole? What’s the new process? Well, the method to get a title is not anything new. It’s not something that was created recently. In fact, it was always in existence, and in most cases, it was better as an option than the Vermont process. It had better results, it was cheaper, it was faster. So let’s take a look at what this alternative process is for those who have missing title paperwork that need to get a legal title certificate in your name. This is the end result you’re looking for: a title certificate. It’s a legal document issued by a government agency. It shows not only that the vehicle exists, but it proves that you are the legal owner of the vehicle. It’s a government document. You can’t buy one from a company, you can’t download one from the internet. It is a certificate issued by a state government agency, usually called the Department of Motor Vehicles. Although some states call it, um, Pennsylvania calls it PennDOT, Department of Transportation. Some states call it Secretary of State or Bureau of Motor Vehicles. They don’t give out titles just on a verbal request. They don’t give out titles with a bill of sale either. You have to have something proving that the legal owner currently has transferred it to you, and if you don’t have that, you’re pretty much out of luck.

Alternative Title Methods
In some states, you can do a bonded title, which is buying a surety bond from a bonding agency. There’s a lot of downsides involved with that, and we talk about that in other videos. You can get more information on our website at cartitles.com. But today, we’re going to talk about the alternative process to Vermont, which is a court-ordered title. The way this works, and you can see one example on this screen, we’ll go through this in detail, is you file four documents in the county court where you reside.

Court-Ordered Title Process
The first document is a petition. This is an example from Pennsylvania, a petition for involuntary transfer of a vehicle. Basically, you’re telling the court, “I want you, the court, to declare me to be the owner, to transfer it from the current owner to me based on the evidence I provide.” The evidence could be a bill of sale, it could be proof of payment. Sometimes people have text messages or emails from the seller. You first include the petition of what you want them to do. This petition could be for anything, but in this case, it’s for a transfer of ownership, a declaration of ownership in your name.

Affidavit of Facts and Additional Documentation
The other document you’re going to submit to the court is what’s called an affidavit of facts. That is a narrative of how you obtained the vehicle. It could be something as simple as, “I purchased it on Craigslist, the seller didn’t have a title, they had a bill of sale,” that kind of thing. You’re going to state the facts of how you came to be in possession of the vehicle and describe that vehicle: year, make, model, VIN number, that kind of thing. Every county has some different particulars on how they do this. Most counties don’t have a package like this. You see on this screen right here, you see Luzerne County in Pennsylvania has a pre-prepared form. It tells you where to fill in the blanks. There are 3,611 counties in the country. There’s only a handful that have forms you can just print out and fill in. Most counties, you have to start from scratch and type all this up, all these words on this one or on the example from the other county. You have to type up all these words yourself, and the court can’t help you.

Declaration of No Interest and Title Application
Most courts don’t have a thing called a court-ordered title. It’s kind of like walking in and saying, “I want to do a dog bite lawsuit,” right? They don’t care what the case is about; they just care that you’re meeting the standards of their court. So, you prepare the petition, the affidavit of facts. In some places, in most courts, you also need to prepare a declaration of no interest. That says, “I’m not aware of anybody else with an interest in the vehicle or a claim in the vehicle.” If you know someone’s looking for the car or that there’s a relative that wants it back or it’s out for repo, you have to tell the court that. If you don’t tell the court there are other parties that might have a claim, then you’re going to be providing false information. It doesn’t necessarily mean those people will get the vehicle. You just have to let the court know that somebody is making a claim to it, and it’s up to the court to decide who to give the vehicle to. Then the fourth item is a title application, so they can sign it, and you submit it to the DMV.

Administrative Process
It’s pretty straightforward. It’s not a situation where you’re going to have to go and do a big Jack McCoy “Law and Order” court case with a jury and spend three days doing testimony. Normally, it’s done administratively. If you file these with the court, and in Pennsylvania, it’s the prothonotary office, they will evaluate it. They might do some research on the vehicle. They might do a background check on the vehicle to make sure it’s not stolen, no liens, no salvage, no back taxes. If everything’s legit, they will sign the declaration of ownership, the petition. You bring that to the DMV or the titling division, and they give you a title. Sometimes, they might ask you to do something else, like take a photo of the VIN number to prove you’re in possession of the vehicle. Sometimes, they might want a copy of your license. Sometimes, you have to go to the clerk after it’s all done, raise your right hand, and swear under oath that everything is true just so that they know that you’re doing it under perjury.

Disclaimer and Resources
Remember, we’re not attorneys. We’re not giving you official legal advice. We’re just giving you some guidance on how this works. We have a whole section on our website at cartitles.com explaining exactly how this works. We have videos you can watch with instructions. We even have some examples of some of the forms. We have a title service if you want us to prepare these documents for you, based on your direction and your information. But the court-ordered title is the most powerful method because the DMV or the titling authority or PennDOT or Secretary of State, whoever does titles in your state, they’re not allowed to hand you a title to give you one of these golden ticket magic papers unless you can prove to them you’re the owner. A bill of sale, your verbal statement, nothing like that is allowable at the DMV.

Court vs. DMV
The court, though, can take that under advisement, and they can make decisions the DMV is not allowed to make, like really who’s the owner. All they can do is, if the legal owner signs a proper title, boom, they can give you a title. But if you don’t have that from the last owner, they can’t do anything. They’re not allowed to, nor do you want them to. Because if they could just do something verbally with a bill of sale, if you had a car that you owned and it was your pride and joy, anybody could walk into the DMV with some fake bill of sale and say, “Hey, I want a title for this vehicle,” and you’d be out of luck. So you don’t want the DMV to make decisions about ownership. You only want a government agency like a court, in this case, Court of Common Pleas, to do it.

Preparing Court Documents
You might have to fill out some cover sheets, like this is a civil cover sheet. This one is a request for scheduling on the docket. Another civil cover sheet. You’re probably going to want to review these and look at the instructions on our website if you’re going to do it yourself. We have great resources for do-it-yourselfers. We love to help do-it-yourselfers. In this case, right here on Section A, they have name of plaintiff. Check here if you have no attorney, self-represented. So you don’t have to have an attorney. This is not something that requires an attorney. It’s mostly administrative. You want to make sure you’re doing it correctly, and the forms are done right. If you are in a state or county where they don’t have pre-created forms like this example, then what you can do is you can use the wording from the generic ones we have on our website and find a court case in your county for something else, like a dog bite or some small claims suit, and look at the format. Is it double-spaced, triple-spaced? How wide are the margins? Do they list the plaintiff first, the defendant first? How do they do it? Then use that format in a Word document or Google Drive to make a form that matches how that looks and just put your own information on it.

Final Tips and Assistance
That’s a great way to be able to get the process started without having to either pay somebody or jump through a bunch of hoops. It’s the most powerful method. You’re going over the head of the DMV. The court trumps DMV. It’s like rock-paper-scissors. Court is better than DMV. And if the court says it, they have to do it. Even if the DMV wants to do something, they want to help you, you really can’t expect them to do something that’s against their rules. It sounds like they’re giving you the runaround. It sounds like they are making it difficult for you or it’s bureaucracy. But they have standards. They can’t just be switching titles around without proper documentation. It’s a nuisance for you, but it does protect people from losing their cars or their vehicles through some sketchy improper title transfers.

Seeking Professional Help
Which brings me to another method. If you are in a situation with a title problem, it’s okay to get help. There are title companies and assistance you can get. Just make sure that you know how the title is being obtained. You don’t want to just sign over your vehicle to somebody and let them do whatever, and then a title shows up in the mail because you don’t know how that title was obtained. You’re on the hook for any title that’s issued, especially if you sign a power of attorney or sign over your ownership to somebody. They can do whatever they want with that process, and if for some reason it’s discovered later that it was done improperly, you could lose your title. There’s lots of examples of titles being revoked, and you don’t want to be any part of that. So if you have questions, you can reach us on our website. We even have live consultations available if you want to get more questions answered without actually committing to purchasing services. We’re glad to be of assistance, and we’ll talk to you then.

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Car Title Pricing Alert For 2023

So what is going on with used car prices and was this recent little blip and drop of prices just a head fake and it’s gonna only be a drop in the bucket it may be that if you’re in the market for a used car now might be the time to buy because they may go up again you might be expecting used car prices to crash but here’s some big headlines and some data behind the scenes that show why that might be the case.

Supply and Demand Issues
First of all according to CNBC there may not be a return to normal for a used vehicle Market there was a decline in price toward the end of last year so in 2022 but inventories remain low and the pause in production might make used cars back up on the upswing we’re seeing that already used car prices are surging again this is from March 30th so whenever you’re watching this this is you know a beginning of 2023.

Recent Trends in Used Car Prices
According to the article it says nice while it lasted for nearly a year the average used vehicle price has been edging edging it didn’t crash it was edging towards affordable for millions of people the relief felt belated and slight but it was welcome but supply of used vehicles failing to keep up with demand prices are creeping up again with signs of pointing to further increases well why is that well you got to remember during 2020 and 2021 new cars were not produced at the same volume that they were in the past so now 2020 you’re three years later a three-year-old used car is a 2020.

Production Gaps and Inventory Issues
They hardly made any new cars in 2020 so the amount and volume of available inventory is incredibly low because you’re going through that dip of where new cars weren’t produced at the same time demand for used cars is going through the roof people want to buy used cars why is that well here’s why new cars are now at fifty thousand dollars average transaction price right so the executives at Toyota says will be paying 50,000 average transaction prices for new cars soon really already I mean right now the average new car transaction price I believe is 47, 48 thousand dollars and it’s only going up and the used car market isn’t going to slow down either.

Affordability and Market Pressure
So there’s a lot of things that play that make the pricing of used cars to be under pressure on the upward side so if you’re looking for a used car that may be a problem it’s also comes in at the lower end of three or four thousand dollar range let’s take a look according to one dealer many customers can’t afford either new or late model use some would be would be buyers he knows are using tax refunds to make ends meet a used inexpensive car is now becoming more of a luxury what the market needs right now are vehicles that are three four and five thousand dollars behind the vehicle shortage and inflated prices is supply and demand it’s real simple right again they repeat the fact that new cars are at forty eight thousand dollars beyond the reach this is going to make a return to what they call normal notice normal is in quotes normal just means what it was four or five years ago That’s History it’s not happening anymore.

Historical Context and Current Market
Right in 2018 or 19 there were plenty of new cars being produced you could buy a really nice new car for thirty thirty-five thousand and in 2014 or 15 there were tons of cars produced so a three-year-old used car was easy to find in 2018. right if you’re in 2019 18 and you’re looking for a three-year-old car well 2018 minus three is 2015. 2015 there were I believe 12 million new cars produced maybe 14 million there’s plenty of them around well now fast forward to 2023 you go back to 2020 three years ago there weren’t that many cars produced and the new cars are a lot higher price so all these are coming together to make finding a good used car for a decent price a very difficult Prospect.

Interest Rates and Financial Impact
And with the fact that interest rates are high one of these articles showed that a used car interest rate now I believe it said it’s 11 let’s take a look I believe it was in this one where it talked about the percentage rate yeah 11.3 percent up from 8 percent a year ago so you went from 11 from 8 to 11 in one year and that’s going to have a big effect on your ultimate car payment you know if you get a three-year-old car you might be able to get a four-year loan and that’s going to be a lot higher payment than a five-year loan on a new car at 11 you know you’re back up in the six seven hundred dollar range per month for a used car new cars are even worse right now new cars are averaging about a thousand dollars a month for a payment on a fifty thousand dollar car.

Conclusion
So keep this in mind as you’re shopping and if you know you’re going to need a car in the next couple years now might be the time to buy because it’s it’s possible that the prices aren’t going to go any lower and they might start creeping back up.

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Only 2 Car Title Methods Are Recommended

Video channel, if you’re watching this it’s probably because you have a vehicle that needs a title, you have title problems, or maybe you’re just an auto enthusiast that runs into vehicles without titles. We’re going to talk about different ways of getting a title and why some of the common ways people go about getting a title really aren’t that good. There’s really only two ways that you should try to get a title for a vehicle when you don’t have the old title.

Understanding the Old Title
What do you mean by the old title? Well, a vehicle title, as you know, is a legal government document that looks like this. It’s not a blank sheet of paper you could buy from a company; it’s actually a physical certificate, and it evidences not only the vehicle itself but who’s the owner. On that title is listed who is the legal owner. Now, you can’t buy a title from a company, you can’t download one from the internet; you have to get it from the government. And the only way they give you a new title is if you have the old title.

Risks of Alternative Methods
There’s a lot of little loopholes and backdoor methods people use to get titles, but a lot of times they can get you in trouble. Let’s take a look at an example of that where there are methods of getting a title which sometimes are not really that good because when you use them, you can have your title revoked, and you can get legal problems.

Boyd Coddington Case
There’s a very famous auto rebuilder named Boyd Coddington. Now, this is an old article, this is from 2004, 20 years ago, and which is about how long we’ve been doing titles, by the way, since the early 2000s. The state of California filed charges against this person. Now, we’re not casting doubt on them, but what this person is doing is the attorney general special crimes unit conducting an investigation for fraudulent registration of replica vehicles. They were switching VIN numbers from one vehicle to another because these were constructed vehicles made out of parts of different cars. All the above actions are a felony because they were registering a vehicle where the value is represented and avoiding compliance with smog law.

Legal Implications
If you’re using any title method that’s trying to do some backdoor to avoid taxes, avoid smog laws, avoid inspection, or even change the identity of the vehicle, that’s going to be a problem. It’s not just California; that’s going to be a problem. If you are getting a title, not only do you want to make sure that the method is good, but you also want to make sure you know what the method is. The reason we say that is because there are a lot of options you’ll find out there on Craigslist, on Facebook, online, where there’ll be somebody that says, “Look, pay us money, we’ll give you a title.” If that company or person is not telling you exactly how they’re doing it, then you might want to be suspicious because who knows if the method they’re doing is any good, if it’s going to get you into trouble, or if the title can even get revoked.

Broadway Title Example
Here’s an example. There was a company back about the same amount of time called Broadway Title. Now again, this is back from 2011. A word of caution: I purchased a vehicle and went through Broadway Title in Alabama. I had to return my plates and title to the state of Illinois after having them for two years because the method that this company, Broadway Title, used was illegal and wasn’t right. Now, I think Broadway Title, the name has been sold to some other company, so I can’t speak to if this company’s any good, and this is just one person’s opinion. Other people have said that their method of doing it was ridiculous, that they had to get a lawyer, that the state didn’t allow it. There are a lot of potential variables. So let’s not jump too much onto Broadway Title, but what they were doing, according to other comments, and you can read yourself on a very popular classic car vehicle website, you can look this up, was signing the vehicle over to this company. They would get a title in their name and then sign it over to you. Who knows what they were doing to get the title in their name, right? If they were doing something that was maybe not just illegal but just borderline unethical, and if the state sees too many coming from this one company, they might crack down on them.

Importance of Transparency
That’s why the best way to do it is to not do something that’s opaque, that you can’t tell what the title method is. You want to know what it is. In fact, the way we do it is we don’t actually apply for the title. You want to be the one that applies for the title. If you let somebody else apply for the title, first of all, the title might not be in your name; it might be in somebody else’s name, and you have to rely on them to give it to you. Number two, you won’t know the method until you sign the form, which means that you’re liable for some method that you didn’t even know how it was done.

Official Methods: Bonded Title Process
There are only two ways that the government really says you should be getting a title. Let’s take a look at those. One is what’s called the bonded title process. In most states, there’s a few that don’t do this, they have a bonded title process where if you do not have the proper paperwork to get a title, you can go through this bonding process and get a title. Now, there are a couple of misconceptions. Some people think you have to pay thousands of dollars for a bond to do this. You have to buy a bond, but usually, the bond costs you a couple hundred bucks. It’s not that much, right? What you have to do is provide an explanation for requesting a bonded title. Basically, what they’re asking you is why didn’t you have the right paperwork, are you in legal control of the vehicle, are you in possession of the vehicle, right? If that’s the case and you have an explanation and you buy a bond, as long as the vehicle is legitimate, it’s not stolen, you don’t have any liens, you don’t have any claims against it, you pay a $15 non-refundable fee, and if you have any evidence of ownership, title, bill of sale, canceled check, provide that as well, they’ll take a look at it. If all things look like it’s okay and the state accepts bonds, you’ll get a title, right? That’s the official, suggested, recommended method that the states have. That’s what you should look at first.

Official Methods: Court Order Title
Now, there’s another method that you can use as a backup, and we’ll talk about the pros and cons of bonded title here in a minute. The other method is what’s called a court order title. You can get more information about these on our website at cartitles.com. The other method is used in states that don’t have a bonded title or if there’s some reason that the bonded title doesn’t work in your state. Here’s an example of a court order title; this happens to be in Ohio. What are the steps? You have to visit a clerk to get the court order packet, which is this packet right here. You have to request the last known address of the vehicle by submitting the form to the BMV. It costs five bucks, no big deal. Mail a certified letter, get an inspection, and then you have to file a petition. It says to appear before the judge. Normally, you don’t have to appear. Normally, you file the petition; if everything looks A-Okay, they’ll either give it to you, sometimes they require you to come in front of the clerk to raise your right hand and swear under oath that this is true, and then you pick up your title. So it’s a few steps; you have to jump through some hoops, but I have to tell you, it’s a lot fewer steps than sometimes some of these other methods that people use.

Vermont Loophole
For example, there’s the Vermont loophole. You’ll see this on our website, online, even major insurance companies like Hagerty Insurance, Car and Driver, have written about this loophole method. You apply by mail to the state of Vermont, you get a registration from Vermont, not a title, just a registration, then you bring that to your state and exchange it for a title. There are more steps involved with that than just doing a bonded or a court order, but a lot of people like to do it because they feel like they’re kind of being sneaky and getting over on the DMV. You could do that. In most states, you’re not going to have a problem. There are a few states that, if you bring a Vermont registration, they’re going to say, “We know about this deal, get out of here,” right? Different times throughout the year, different years, some states will have more problems than others. As of right now, in June of ’23, we know for a fact that the state of Florida, if you walk in with a Vermont registration, they’re probably going to tell you to get the heck out. If you want to go through the hassle of going through Vermont to get a registration and a license plate, you can do that, but you’re running the risk of your state not accepting it. That risk is totally on you.

Risks and Costs of the Vermont Loophole
Plus, you have to pay sales tax to the state of Vermont. You might think, “Well, how much could it be?” It could be a lot because Vermont does not figure the tax on what you think the value is or your bill of sale; they figure it on what the highest book value they can find is, unless you present evidence otherwise. The evidence has to be a book value, not a picture of the car in pieces, not what you paid for it. They might use a lower book value than what they find, but it’s only a book value. You can’t just say, “Well, it’s only worth $300 because it’s in parts.” We’ve done other videos on why that’s the case.

Mechanics Lien
Some people will try to file for a mechanics lien. “Well, my buddy has a repair shop, he’ll file a mechanics lien and get a title.” Don’t even bother. States all across the country are cracking down on mechanics liens. There are several title companies that were operating for the last few years that now are out of business. A couple of them have actually been prosecuted criminally for filing fake mechanics liens. A mechanics lien is designed for a repair shop that actually did work on a vehicle, somebody didn’t pay the bill, and they auctioned it off to the highest bidder. It’s not just giving it to somebody else. If that’s not what happened, the DMVs will find out because they audit these and they look to see this repair shop is doing a hundred mechanics liens a month but only reports sales tax of a small amount. They know they’re out there selling fake mechanics liens for $500 a piece.

Conclusion
Be aware that just like the article we saw at the beginning, your title can get revoked if you do it the wrong way. Now, the two methods that are officially recommended, suggested, required: bonded title and court order title. End of story. If you decide to do something else besides those two, you run the risk that it could be harder than those two, it could cost more money, it could get rejected, or it’s just not going to work. So make your choice accordingly. If you pick a method to try to get a title that’s not a court order, not a bonded title, you may run into problems down the road. Sometimes it works, but you have to make sure that you’re weighing your risk and your reward of which one you want to do.

Final Thoughts
The title landscape in 2023 is about the same as what it was before, but it’s much more risky to do something other than a bonded or a court order title. Look, we’ve been doing this for 20-plus years, doing car title paperwork for people. Remember, you’re not buying a title from a company, you’re not getting a company to print you out or issue you a title. A title is a legal government document; the government has to give it to you. Now, the company can help you get it, but you don’t want to just hand it over to them and let them do everything because they may do something that’s cheaper and easier for them to do because it makes them more profit, but it could put you in hot water. Make sure you’re aware of what the process is, that you read a description of what the process is, you pick the process that you are comfortable with and you’re familiar with, and make sure you know what it is. Don’t just click it and say, “Access to whatever, just do it.” Make sure you know what’s going on because that title is being done in your name on your behalf, and once you sign those forms and send them in, you’re on the hook for whatever they are.

Summary
Car titles are a legal official document; you don’t want to mess around with it. Do yourself a favor and do either a court order or bonded title. You might think by reading it, and we’ll pull this back up again, that this is going to be difficult. What are the steps to get a court order title? Visit the clerk, request it. This isn’t really seven steps; most of these steps are combined. This is actually less work than jumping through the hoops you have to do for Vermont because remember, when you do the Vermont loophole, you have to get the Vermont registration, then switch it to your state and switch over your insurance. There are a lot of steps there, get a VIN verification. It’s really the same amount of work, and you run the risk of your state not accepting it, and you have to pay the tax, and it’s just sketchy. You’re better off going directly with the right method.

Alternative Methods
There may be some legitimate realistic scenarios where the Vermont process is the best way to go. Many high-profile people have done it. Like I said, Car and Driver, Jalopnik, Hagerty Insurance, you’ll see many, many articles. People all over the web, all over the internet have done this, but it doesn’t mean in your case it’s the best way to go. Do yourself a favor: look at court order, look at bonded. Don’t be afraid of the fact that it sounds like it’s too much work, too much bureaucracy. In the long run, you’ll be a lot more secure. You won’t have to be looking over your shoulder waiting for the DMV to yank your title because you did something that they didn’t want you to do.

Contact Information
If you have any questions, reach our other website, cartitles.com. You can consult with a title agent, and we can help you understand any of the processes a little bit better.

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