The Expert Podcast

Well, for those of you who have been following our channel for many years, this will come as no surprise, but there's some important developments for the Vermont loophole. The thing that's been, you know, most interesting to people around the country for over a decade, and this Vermont loophole is having some significant changes over the next couple weeks.

Like I said, for viewers of the channel, you've seen us talk about this going back a couple years, that this is something that's going to happen where this loophole is effectively being closed. There may be some ways to use it, but you want to be aware of what's required.

This is the new current requirement from the Vermont DMV. They've issued a bulletin called the Vermont Register—I'm sorry, the Out-of-State Registration Certification. This is a form that was issued in June of 2023. This is a new form in concert with other state jurisdictions. What does that mean? That means the Vermont DMV has been in contact with other DMVs. We've reported on this for several years: the DMVs across the country have been working with Vermont to try to consolidate these rules because they don't want people just kind of using this loophole and getting titles for vehicles they're not supposed to.

The Vermont Department of Motor Vehicles now evaluates all out-of-state transactions based on your own home state's laws, regulations, and policies. We've talked about this: Every state has certain policies about where you can and cannot register your vehicle, right? So up until now, Vermont didn't really care. To that end, the department will not process these transactions unless you can establish a legitimate connection.

So, what you have to do is get this form that says, "By signing this form, I declare I'm the owner of the vehicle and apply for registration. I certify the statements contained in this application are true. I understand that the declaration is made under penalties to be completed by the home state of motor vehicles or comparable agency." What that means is that when you send in an application to the state of Vermont for a registration for the loophole, you have to get your state to say that's okay. It's not okay to transfer the registration from Vermont to your state, but it's okay for Vermont to give you that license plate in the first place.

Once this information is received, a Vermont DMV law enforcement division will review the request and ultimately grant or deny the application. During this review process, the staff may request additional information from the owner or his home state. So, the long story short, they're going to review these. If you're trying to get a title for a vehicle that you're really not supposed to, they're not going to be part of that.

We recommend, as we always have, looking at the other options: the bonded title, the court order title, prior owner contact, and other types of methods on our website. In fact, in most cases, the other methods are cheaper than Vermont because Vermont charges you a big-time sales tax. They always have, and we've always advised people not to use Vermont as their first option because the taxes are high, and you have to wait for Vermont to process it and then switch it to your state.

Whether you do a bonded title, a magistrate title, or a court order title, you don't have to pay tax to Vermont, you don't have to wait for Vermont to process it, and now you don't have to deal with this effective immediately. The form has to be completed in the home state of the vehicle owner, certifying that the home state laws do not require the vehicle to be registered there. Very few states are going to say this is okay.

If you want to go ahead and try for the Vermont loophole, go ahead. It's, you know, your option to do, but we advise that you do another more appropriate process, like we always have suggested: court order, bonded title, or other method you see on our website. Or you can consult with us to see what might be more appropriate in your scenario.

But if you do decide to still persist in wanting to do this Vermont loophole, be aware that there's a lot of possibility that it's not going to work. And if you pay us to do it, then the cost is going to be spent. All we can do is switch it over to another process after the fact. So make sure that you pick a method that you want to abide by and not necessarily pick one just because you read it somewhere on the internet.
As always, we're glad to help. We're glad to be assisting with the title process because we know how hard it is to get a title. We deal with DMVs all the time, and we want to make it easy for you. But we want to help guide you into a process that is going to be more appropriate for the scenario. And for most people, Vermont is not the way to go. You want to use another process.

Even though we've advised that for a long time, many people still gravitate to it because it sounds good; it sounds like you're getting away with something or a loophole. We don't advise it, and looking at the other methods is probably going to be better for you. Let us help. Let us be a good resource—a free consumer resource for you.