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How To Use The Vermont Title Loophole To Get A Vehicle Title

The Vermont DMV has played a key role in helping drivers across the country obtain titles for their vehicles. For many years, the Vermont registration process—also known as the Vermont title loophole—has allowed out-of-state residents to receive a vehicle title using this method. No other state offers this particular type of title process. The main requirements for using this title loophole include the vehicle being at least 15 years old and the owner providing a valid bill of sale.

Step 1: Determine if your vehicle qualifies

Model years

The Vermont title loophole is only available for vehicles that are 15 years old or older. If your vehicle is a newer model, it is not eligible for the Vermont title loophole. Vermont is a non-titling district, meaning they do not produce titles for vehicles that are 15 years old or older. Instead, the registration that you receive for an older vehicle is equivalent to a title in the state of Vermont.

Vehicle condition

To use the Vermont title loophole, you do not have to physically take your vehicle to Vermont. However, you must meet all of the qualifications for an operable on-road vehicle and your vehicle cannot be in the NMVTIS database. The VIN verification process is used to determine if your vehicle meets all of these qualifications during an inspection.

Liability insurance

The Vermont DMV does not require proof of insurance, but there is a section on the application that certifies that at the time of application, you have current insurance for the vehicle. It is a crime punishable by a fine of up to $1,000 and up to two years in jail for providing a false statement on this application.

Step 2: Find your vehicle’s NADA value

The book value of a vehicle is the estimated price for which the vehicle could be sold. There are various methods of calculating value, including average value, clean trade-in, and others. For purposes of the Vermont title loophole, use clean trade-in value. When using the NADA book to calculate book value, look for your vehicle’s clean trade-in value rather than its retail cash price, because you will need to use that figure to apply for a title in Vermont. The Vermont DMV requires this method in its statutes but notes that not all vehicles are included in the NADA book. You can also check other sources such as Kelley Blue Book or Galves. Make sure to use an approved source and that the figure you assign to your vehicle reflects its condition accurately.

Step 3: Gather proof of ownership and necessary paperwork

Bill of sale

You must provide a valid bill of sale to provide proof of ownership to use the Vermont title loophole. The bill of sale is your receipt or proof that you purchased the vehicle. Your bill of sale can be typed or handwritten and must contain specific information about the transaction. For help with your bill of sale, check out our article How to Write a Bill of Sale.

Vermont Registration Tax & Title Application (VT-119)

One of the biggest mistakes applicants make when applying for vehicle registration is using section 4 of the VD-119 form to apply for a title rather than to apply for new registration. Remember, Vermont is a non-titling jurisdiction. In these situations, the registration is the equivalent to a title for that age of vehicle. We recommend that you type and double-check this form before submitting it to the Vermont DMV. Applications that are typed and complete are more likely to be approved and processed quicker than handwritten applications.

VIN Verification

VIN verification is a physical inspection of a vehicle identification number (VIN) on the vehicle to confirm that it matches the VIN on the application. At the beginning of 2020, the VIN verification process was waived for all cars and trucks, except for motorcycles. In 2022, the Vermont VIN verification is being required again for all vehicles. The process of a VIN verification can be conducted by any state agency, such as state police, DMV investigators, and other authorized agencies. This does not have to be done in Vermont. For more information on the VIN verification process, check out our article Vermont VIN Verification For Title Loophole Explained.

Step 4: Calculate sales tax and registration fees

Calculating sales tax

When determining the tax on your vehicle in the state of Vermont, the procedure is to multiply the clean trade-in value of your vehicle by 6%. This percentage may not sound high, but it can vary depending on the value of your vehicle. For trucks over 10,100 lbs and for certain vehicles, the cap for taxes is $2,075. There is no way to get around paying taxes in Vermont. State statutes state that simply applying for registration is evidence you owe them taxes. For more information, check out our article How To Calculate Sales Tax for Vermont Title Loophole.

Registration fees

The Vermont registration fees are $48 for motorcycles and $76 for most vehicles and trucks under 6,000lbs. Heavier vehicles and some other types of vehicles may be subject to a higher registration fee that can be found here.

Step 5: Submit to the Vermont DMV

Once you’ve determined that your vehicle is eligible for the Vermont title loophole and all paperwork has been completed, you can submit your documents to the Vermont DMV for processing. This typically takes 4-6 weeks for most applications. Once the Vermont DMV approves your application, they’ll send you temporary plates and registration. With that new registration, you can use that as proof of ownership to get a title in lieu of a certificate of title at your local DMV.

The Vermont title loophole is a great way to get a title for an old vehicle using a bill of sale. Remember, before proceeding with this method, make sure it’s applicable in your jurisdiction and situation. For additional tips, check out our article Top 5 Tips for Using the Vermont Title Loophole. Need help preparing your paperwork? Have one of our title experts do it for you!

Want a professional to do it for you?

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