Vermont Loophole Cancelled. Now What?

The End of the Vermont Title Loophole
So the famous Vermont title loophole is over. If you’re watching this channel for the last few years, you’ve heard us talk about how this thing was going to come to an end and how many states were giving people a hard time about it. Going back 3 or 4 years shouldn’t be news to many of you. We’re going to talk about what do you do now, what is the new loophole besides Vermont after Vermont.

Vermont Registrations Explained
But before we do that, let’s talk about what’s happening with the prior Vermont registrations. Here’s how it worked, and some of you know this already. Maybe you just found out about the Vermont loophole now, maybe you’ve known about it for years and you’re trying to find out what to do otherwise. Maybe you sent in paperwork to Vermont and they sent it back. The Vermont loophole, so to speak, was a method that people would use to get a title for their vehicle when they did not have the proper documents for their own State.

Publicizing the Loophole
You can see here this was, you know, talked about on Hagerty Insurance, one of the world, one of the country’s biggest legitimate insurance companies. They talked about the Vermont loophole. In fact, they were one of the places that publicized it many years ago, and they talked about on the channel about how they use our service to do this or reference our website.

The Process
So here’s the thing: what you would do is you would apply by mail to the state of Vermont to get a registration. You’re not getting a title; you got a registration. Once you got that registration from Vermont, then you bring it to your state to exchange for a title. It gave you something, a piece of paper with your name on it, that you could bring to your state to get a title.

Issues with the Loophole
The problem with it is that’s not what your state wanted you to do. They wanted you to jump through the hoops in your state to get a title, maybe a bonded title, maybe go back to the owner to get a duplicate. Right. But people took this loophole because they thought it was the easy way out, and in some cases, there were some parts of it that were easier, but in reality, a lot of times, it was harder than just doing it the right way. You had to pay tax to Vermont, which was a huge tax bill. You had to first get the Vermont license plate and then switch it over to your state. There were also some insurance issues that came up.

State Rejections
So, starting in 2017 or 18, some states started to reject Vermont registrations if you brought them in. For a while, the state of Indiana wouldn’t let you exchange a Vermont registration for a title. Then for a while, Ohio gave you a hard time. There was a period of time in Florida where they put signs in the window of the DMV in Florida: “Don’t bring us a Vermont registration, we consider it to be fraud.” So these are the pushbacks that people got from it.

New Loophole: Court Order Title
So we recommended many years ago to look at other options. There’s a new loophole, really not new, it’s always been in existence. Some people don’t want to do it because they think it sounds hard; they think that it’s going to be more trouble than it’s worth, and that’s by going over the head of your DMV. Look, if you walk into the DMV in your state and you don’t have one of these (a legal title to a vehicle from the last owner properly signed on the back to you, no cross out, no white out, no tears) and you actually have it, if you don’t have a title, you can’t get a new title with your name on it. The DMV is not going to give you one just based on your say-so, not even with a bill of sale. Bill of sale means nothing; that’s just a receipt that somebody gave you for payment of the vehicle. It doesn’t mean that they owned it, doesn’t have any proof that they were the owner, so they don’t take bill of sale to give you a title.

Going Over the DMV’s Head
So what do you do even if they wanted to? The DMV can’t do it. You go over their head. Who is their boss? Their boss is the court. So what you do is you do a court order title. This is an example of one from Pennsylvania. This is the procedure you follow when you wish to obtain a certificate of title to a motor vehicle if you don’t have the old title. You have to prepare these forms: look, there’s Section Two, Section Three, Section Four, Section Five, Section Six, Section S. Court order. Court grants your petition. It will grant an order. Once the order is filed, you need to get a copy and then bring it to PennDOT; that’s Pennsylvania’s version. In this state, this is Oklahoma: court order to issue a title.

The Court Process
We didn’t invent this. This is actually a court process. Now, most counties in the country don’t have a specific court order title pre-made document like this one. Most counties, you have to type this up. I see all these words on the page. You have to type it from scratch and file it. Some counties have it; you put in the VIN number, you put in your name, you put in the information. Look, in support of this application, the applicant would state under oath he is the owner of this vehicle and came into possession under the following circumstances. Three lines: how’d you get the car? Bought it on Craigslist for 500, whatever. Verification: I read this application; statements are true and correct. You have to get it notarized. Court order for issuance of title.

Examples from Different States
So this is one example. We looked at the other one from Pennsylvania. Some states have examples of these. Ohio has a few counties that have examples. If your state has one or your county has one, you can use it as a template. If not, you can type this up, file it with the court. First, see you’re going over the head of the DMV. The court will do a little bit of research. They’re going to make sure your vehicle’s not stolen, make sure it has no liens, make sure it’s not a salvage or parts only or junk title. They’re going to make sure there’s no claims against it from a probate. Once that’s all checked out, they may ask you for a few more things, maybe a picture of the VIN number to prove you’re in possession of the vehicle. They may ask you to show up in the clerk’s office, raise your right hand, and swear under oath everything you said is true. Normally, they don’t require you to do a big Law and Order Jack McCoy court case. They don’t want to do all that; they want to keep it simple, and they issue this order.

Court Order vs. DMV Rejection
Here’s the application for an order. Here is the actual order: court order for issuance of title. Once you get that signed by the judge, so ordered, district court judge signs it right here, you take that to DMV and slap it on the counter, and they have to give you a title no matter what paperwork you don’t have because this trumps not having this. So this is the new loophole. It is maybe a little bit more bureaucratic; you might have to fill out a couple more forms, but here, look, this one here has three forms. Usually, you have three or four forms, and we’ll talk about what they are here in a minute.

Comparing Processes
The Vermont process, you have to fill out the Vermont application VD-19. You have to get that back; you have to sign over that registration, that’s step two, and then apply for a title in your state. Three forms, and you have to wait for Vermont to issue a registration, which may take 3 or 4 weeks. Then you have to bring it to your state to switch for a title, which may take 2 or 3 weeks. In the meantime, you’re paying fees to both states, waiting for both states. This one here, you’re just jumping to the front of the line, right? You’re going over their head at the DMV and having the judge say, “No, this person is squared away, and we’re giving him a title.” More importantly, you don’t have to worry about the DMV not accepting what you bring them. If you bring your DMV a Vermont registration in the past, they could reject it if they wanted to. If they thought you were trying to do something sketchy, they could throw you out. They can’t reject a court order. Court order is, you know, rock-paper-scissors. Court order beats DMV.

The New Loophole: Advantages
So use this technique and this process to your advantage. It’s the new loophole. Is it a little more work? Maybe a little bit. Is it a lot more powerful? A lot more powerful because there’s no rejection by the DMV. Can the court reject it? The court can reject it, but normally they’re only going to do that if there’s something wrong with your vehicle or your story. If you stole the car, if somebody else stole the car, if there’s liens on it that you haven’t cleared yet (and there’s ways to clear liens, we talk about that in other videos), or if the vehicle is not eligible for a title (is it a junk parts-only vehicle). As long as you have a legitimate vehicle, this is the way to go, and you don’t have to pay anybody to do this. You can fill out all these forms yourself. Our website has examples of how to do that. We also have a title service; if you want assistance with it, of course, we can help you, but you don’t have to pay anybody to do this. You don’t have to hire an attorney; you don’t have to hire a lawyer. You can do these yourself. They give you the checklist of what to do.

Using Templates and Getting Help
Even in the states where they don’t give you that, you can use templates that we provide on our website to be able to figure it out. Or if you want help, we can do that too. Don’t fear the Vermont loophole being over. It’s not the end of the world. You can still get a title. These ways are better.

Potential Revocations of Vermont Registrations
Here’s the other kicker: there’s word out there from some insiders at DMVs that some states are going to go back over the last 12 months and find people who submitted a Vermont registration in order to get a title in their state and revoke those titles. We’re already hearing this is going to happen. So be glad that you didn’t do the Vermont process because there’s some people that are going to have a rude awakening when they get their letter in the mail from their state DMV, let’s say Nevada DMV, saying, “Hey, remember that Vermont registration you brought us? We’re revoking your title. We’re undoing it.” So now you have to go through another process.

Conclusion
So be glad you didn’t do it, especially in the last few years. People still wanted to do it even when they’re offered the options. You know, people have the freedom of choice; they can do whatever they want, but now you can not have to worry about that option, which may not be the best overall. You can just jump right to the best way to do it: court order. How would you like to have the court on your side for a change? How would you like to have the judge be your partner for a change instead of being against you? The court is on your side against the DMV with a court order title. If you want more information, you can check out our website cartitles.com. There’s an email helpdesk at cartitles for our help desk. There’s also an option where you can arrange for a private consultation with a certified title agent to go over your specific case to see how it will work out for you.

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