Common Questions on Bill of Sale and Title One of the most common questions we get has to do with a bill of sale and a title and how they relate to each other and how you can get a title with a bill of sale maybe or how they’re different. And this is a great YouTube video from a channel that follows court cases. This YouTuber gets live feeds and recordings from various court cases around the country, and they play them on YouTube, which gets a lot of views. In this case, the person had a vehicle that was impounded by a towing company.
Towing Company Title Verification Some of you may be familiar with this, where your car is impounded, and you try to get it out, but the towing company makes you show a title in order to release your car, and for good reason. You don’t want somebody to get your car out of impound just by paying a fee, and it’s not their car. So, the towing company is going to make sure they’re only giving the keys to that car to the actual owner by verifying the owner by looking at a title. They’re going to look at the title for the vehicle.
Bill of Sale vs Title at the Towing Yard They’re going to make sure your name is on it before they hand over the car to somebody that just says, “Hey, give me that car out of your impound.” So, what happened with this person in the video was they went to the impound yard to get their car out after it was there for a few days. They wanted to pay the fee, but they didn’t have a title; they only had a bill of sale. And the towing company said, “No, we’re not giving you this car because we don’t know if it’s your car.” So, the person had to leave; they weren’t allowed.
Fees Accumulate as Title is Verified To take the car, and in the meantime, the towing company racked up a whole bunch of more storage fees. The person came back a few weeks later with a title, and now they had to pay more money. This person is in court complaining that they shouldn’t have to pay this money because they had a bill of sale. So, watch what the judge says. This is a very good legal description of how the government, the courts, and the DMV feel about a bill of sale. Let’s see what they say: “The motorcycle is mine, here I am, but nobody.”
Judge’s Response Would listen to me, and I couldn’t get it out because it was Police Hold on it. Nobody would listen to you because you didn’t have a title. Your reading will be back in 8 seconds. In the meantime, remember you have access to live one-on-one consultation and undivided attention from a licensed certified expert in this subject and many others. We want to listen to your story, hear your questions, and give you expert advisement on your options. We want to tell you what we know about your situation and what options you have.
Bill of Sale vs Title Legality Now, back to your reading: “But I have a bill of sale; I bought the… I don’t care. A bill of sale is something somebody could write on the back of a napkin. Well, I’m not going to register my vehicle with the state.” So, you’re not the owner of it according to the state. You can see how the government looks at titles and bills of sale. If you don’t have your name on the title record with the government, they don’t consider it to be yours. A bill of sale is just a receipt that you gave somebody money, and it seems like it’s an.
Notarized Bill of Sale and Ownership Official thing. You might say, “Well, it got notarized. Who notarized it? Who signed it and verified that that was the person?” This is a very good example of a judge who’s not part of the DMV, not really part of the title system, who looks at the case and says, “Look, I don’t care if you had a bill of sale. Anybody could write that. Anybody could write up a bill of sale. It just means that somebody took your money. That’s all a bill of sale means. It’s somebody who’s willing to take your money and give you a receipt for your money, and it doesn’t.”
Ownership Issues with Bill of Sale Prove any ownership. It doesn’t prove they own the vehicle; it doesn’t prove you own the vehicle. For example, I could go to Enterprise Rent-a-Car right now and rent a vehicle. I could drive it off the lot, put an ad on Craigslist or Facebook, and say, “Hey, I’m selling this car without a title. I’ll give you a bill of sale.” I give somebody a bill of sale; it doesn’t mean they’re the owner because just because I gave them a bill of sale, it doesn’t mean I was the owner. I didn’t have the right to sell it to them.
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Hidden Crisis in the Automotive IndustryThere is a hidden crisis about ready to hit the automotive retailing industry and it’s related to the pandemic even though that’s been over for years. The reason is there will be fewer lease returns and fewer used cars for that matter. Remember back in 2021 and 2020 when dealerships were shut down for the pandemic, there weren’t as many cars sold or leased. Remember, used cars—the used car inventory doesn’t come from a used car factory; it comes from vehicles that were sold two or three years ago, now coming back into the marketplace.
Impact of 2021 Leases on 2024 MarketIf you had a three-year lease on a car, which is the most common lease term, in 2024, leases that are coming due were put out in 2021. In 2021, there were much lower volumes of vehicles sold or leased. So, if you’re a dealership, you normally would have a big off-lease pool of vehicles that you can draw from. In 2024, you’re not going to have that pool, which means used car inventory is going to be very difficult to come by. People who bought cars in 2021 didn’t lease them—they bought them. There were fewer cars sold that year, but also, those people may keep them longer than before.
Slim Used Car Market AheadSo, it’s likely that the late-model used car market is going to be very slim for the next 12 to 18 months. What is that going to mean for the industry? Automakers will have a challenging future, and leasing rates fell from 1 in 3 to 1 in 6—half the number. Certified pre-owned cars will see a reduction in supply because there’s less of them. What’s that going to do for prices? Well, prices might go up on used cars again, which might make it difficult if you’re in the used car market. It might also be a good time to look at a new car versus a used car.
Outlook on the Future of the Car MarketHow long is it going to last? Well, according to JD Power, one of the largest automotive consultants, the used vehicle supply won’t return to 2023 levels until the end of the decade—that’s five to six years away. So, if you’re looking at the car market this year, next year, or down the road, you might want to hang on to the used car you have if it’s a nice one, or consider a new car that might not be much different in price from the used car that might be in the marketplace.
Future Considerations for Car BuyersInterest rates are still going to be high, so if your vehicle inventory in your family is such that you may need to replace one or more of your vehicles, consider what the marketplace is going to be like in the next few years to make plans for which car to consider, which car to buy, or which car to keep.
Misdirected Transfers in Financial FraudOne of the scariest things we’re seeing in financial fraud are these misdirected transfers where it could be a title company doing a real estate closing. It could be a purchase from a company. We had one a couple weeks ago with a fire department. A municipal fire agency was purchasing a fire truck, and they sent their money to pay for the fire truck to the wrong place. And how does this happen? It happens where hackers will break into a system or an email of a company. It could be a small company.
Compromise of Email ChainsIt doesn’t have to be any of the companies involved in the transaction. It could be an associated company, could be like a home inspector or even a contractor. On these email chains, they’ll have all the information about an upcoming purchase. For example, in a real estate transaction, there are lots of people involved in that transaction: home inspectors, mortgage brokers, insurance companies, utility companies, electrical, cable TV. Any of these companies involved in the closing will know when the closing is happening. So, a lot of these emails are CCed to all these people so everybody knows when the closing is happening, how much it is, and what the details are.
Cybercriminals Targeting TransactionsThese hackers will gather up all this information and, at some point, they’ll say, “You know what? We’re going to attack this transaction.” And what they do is, when the time is right, they send an email to the person paying the money, saying, “Here’s where you send the money. Here’s your wire transfer.” They make the email look like it came from the right place. They have all the right names, all the right logos, all the right information.
Consequences of Misdirected PaymentsThe poor buyer sends their money to a hacker, and it’s overseas, and it’s gone. The same thing can happen in business if you’re buying a large piece of equipment. The hackers will monitor it, maybe the supplier’s some low-level tech person. They get the information, they send the buyer the wire transfer information, and it’s wrong. So, this cybercrime is very, very difficult.
Simple Prevention TipThere’s an easy way to prevent it: if you just send a test payment before you send any big amounts by wire transfer. Send 100 bucks, 50 bucks, whatever it is, and make sure that it goes through properly to the right place. For the kind of money we’re talking about, it’s very important to prevent it. Because if you don’t prevent it, you could lose all your money for your down payment on a house. If you’re a business, you lose your purchase of the equipment. In the case of that fire department, you know that was money they had saved up for years to buy a new piece of apparatus, and without that, it put their community at risk.
Practical Steps for ProtectionDo this test anytime you send a large transaction. You can check out our website, verifyescrow.com, for instructions. There’s no cost. It’s something that is just a free checklist of how to do a large transaction. You want to send a test wire transfer before you send anything large and then verify with the actual recipient that they got that small payment before you send the whole amount.
Montana LLC Loophole Scam UpdateOkay, here’s another update on the infamous Montana LLC loophole scam. As we talked about before, there’s a lot of enforcement action from the government regarding this evasion scheme. This is the latest, and we were referred to this by a conference call we had with some government agents, government employees from various DMVs. We’re a member of a coalition called EART, which is a coalition of vendors, companies, and DMVs trying to implement electronic titles.
Government Crackdown on the LoopholeIn one of the conference calls, somebody brought up the Montana loophole, and they said their state is actively enforcing against it. They also mentioned an article showing that California is doing the same thing. The person who mentioned it wasn’t from California but from another state, which I won’t mention. This Montana LLC scam involves individuals with a title problem or those trying to avoid paying sales tax, skipping inspections, or doing something different. They form an LLC in Montana, put the car in the company’s name, get a license plate, and drive around with it. Montana has low requirements for inspections, no sales tax, and easy title processes.
Legal Ramifications and Increased ScrutinyMany people trying to streamline their titling process, lower costs, and reduce paperwork use this loophole. However, in many cases, it’s completely illegal, and other states are catching up on this just like they did with the Vermont loophole, which was not technically illegal but an improper out-of-state registration. This article highlighted that states are cracking down on this directly with consumers. Trevor, a California resident, was surprised when state investigators and deputies arrived with a search warrant to seize his car and phone. The crackdown comes from states realizing they’re losing sales tax and that improperly registered cars are on their roads without the correct inspections.
Methods for Tracking Loophole ViolatorsStates are discovering these cases through three main methods. First, they access Montana DMV records and back-trace corporations to find out if any members are residents of their state. Second, they’re using ALPRs (Automated License Plate Readers), which are on police cars, tow trucks, and traffic cameras. If a Montana plate repeatedly shows up in a state like California, authorities assume the car is being used there illegally. Lastly, they use insurance records, specifically garage location data. If you register your car in Montana but live in California and the insurance company discovers this discrepancy, they may deny your claim or cancel your policy.
Insurance and Title ComplicationsThe insurance issue creates a catch-22. If you tell your insurance company the car is in Montana but it’s in California, they’ll deny coverage if there’s an accident. On the other hand, if you tell them it’s in California, they’ll ask why the car is titled in Montana. Either way, this puts you at risk of losing your insurance or facing penalties. All 50 states, including territories like Guam and Puerto Rico, have this issue on their radar. They are using ALPRs, AI monitoring, and local police to run background checks on suspicious registrations and titles.
Legal Consequences and CautionThis is a serious nationwide issue, with people facing tax evasion charges, penalties, and even prison time. Authorities are cracking down on LLC-owned vehicles from Montana that are operating in other states. If pulled over, drivers could face questions about their licenses, insurance, and the LLC’s purpose. These loopholes can lead to severe consequences, including imprisonment.
Legal Advice and AwarenessIf you’re using this loophole to avoid taxes, inspections, or paperwork, there are legitimate ways to handle titling issues without risking penalties. We’re not giving legal advice, so before attempting anything, consult an attorney to understand potential risks. Cases of arrests and prosecutions related to this scam go back five or six years, so ignorance of the law won’t be a defense.
Hello, this is Dave Pelligrinelli at Car Titles. Lately, we’ve been getting more requests for lien releases on vehicles from a lender called Yendo, and this is a very innovative type of lending institution. What they do is they provide you with a line of credit, like a credit card, that is tied to your vehicle.
How Yendo Lending WorksSo what they do is they get the title for your car, they hold on to it, and they give you a credit card that you can use to borrow against or pay down. It’s not any kind of fixed amount—it’s a very innovative lending business model. But what you want to make sure of is, whenever you close that account or pay it to zero, that you get a lien release from the lien holder. That way, if you ever need to sell your car or trade it in, you actually have a lien release.
Customer Experiences with YendoThe last couple of inquiries we received were from people who had a loan with Yendo. They had a credit card, and they had just recently paid it to zero but hadn’t canceled the card yet, and their car was totaled. So, they had to get a title so they could get their insurance money. Remember, as long as that card is still active, they’re going to hold a lien on that vehicle because you could charge it up any day.
Importance of Lien ReleaseYou want to make sure you get a lien release document. If you need assistance on how to do that, you can check out our website. If you want assistance with the paperwork, we can handle that as well.
Yendo’s Unique Lending ModelThis Yendo credit lending on vehicles is an interesting new twist on vehicle loans, and I’m wondering if anybody here in the comments has experience with it. Did it work out for you? What has your experience been dealing with that company? So far, we’ve had really good luck dealing with them to get lien releases. As long as there’s no type of conflict with the company, they’re very good at providing the documentation.
Yendo’s Customer RelationsIn some cases, even when there’s a delinquency or a charge-off, they have provided a lien release because it’s a charge-off. But in most cases, they will deal with you very straightforwardly as a lender. They’re very well-known, and if you look at the bottom, they’ve been featured in all kinds of media and publications for their unique and novel approach to lending on vehicles.
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