The Expert Podcast

One of the most common questions that comes up is a person wanting to know if you can register or title your vehicle out of state. You live in a certain state, and you want to title it somewhere else. Well, the first question to ask is, why would you want to do that? Because depending upon the reason, it could determine whether you can or can't. In most states, they don't give out titles or registrations to out-of-state residents. The federal guidelines for DMV say that in order to get a title in your state, you're supposed to be a resident of that state. If you're not a resident of the state, they're going to ask you, why do you want to title it here? Registrations and titles are for use in that state.

Now, maybe you have a piece of land there, a business there, you vacation there, or you're a snowbird who travels from New York down to Florida. There are certain exemptions; however, you have to prove what's called a domicile or a nexus to that state. If you don't have a legitimate connection to the state, your application is probably not going to be approved.

If the reason you want to go to a different state is because it's easier to get a title there, there are two problems with that argument. First of all, there are no easy states. Everybody thinks their state is hard because that's the only state they have experience with. Every state's going to be hard to get a title in unless you have all the right paperwork. Unless you have the actual title certificate from the last owner properly signed over to you, it's going to be hard to get a title because that's what you're supposed to have. If you don't have it, technically, you're not supposed to get a title at all.

There are some processes you can use to get a title, but most of the time, you have to jump through a bunch of hoops. For example, in New Jersey, there's a process called the defective title document process. It's 15 steps, and it may take you months. In some states, you can do a bonded title, but it's not going to be easy because getting a title is considered like getting money out of the bank; you have to have the right credentials.

If you think it's going to be easier by going to another state, that means you're trying to avoid something difficult in your state. The key word here is "avoid" or "evade." If you're trying to evade something in your state, like an inspection, taxes, or paperwork, trying to go out of state is going to get you into trouble. When you get that title from out of state, you have to do one of two things: either transfer it to your state or drive around with an out-of-state plate in your local state.

If you drive around with an out-of-state license plate, the problem is you're going to get pulled over. When you're seen driving a vehicle with an out-of-state plate on a regular basis, at some point, you're going to get pulled over. They're going to start asking you questions like, why didn't you register it in your state? Most states have laws that say you have to title or register your car in that state within a certain period of time, not from when you bought the vehicle but from when you moved to the state. So, if you already lived in the state for 30 days, the clock is over.

There are a lot of schemes that people use, like forming a corporation in another state and putting the vehicle in that corporation's name. But then you have to figure out where you're going to get insurance. Your insurance policy is going to ask you for a garaging address. A garaging address doesn't necessarily mean you need a garage; it just means where your car is parked on a regular basis. If, let's say, you get a corporation in Oklahoma and title it there, your insurance company will ask, where do you keep the car? If you say Oklahoma, that matches your registration. But what if you live in Georgia and park your car there every day? If something happens to that car in Georgia, and you have an insurance claim, they're going to ask why it was in Georgia. If they find out you gave a wrong garaging address, they'll decline your claim.

On the other hand, if you put Georgia as your garaging address, they're going to ask, why are you titling it in Oklahoma? What's the reason for that? It's a catch-22. So, the short answer is unless you have a very, very good legitimate reason to title in another state, like having a second property or land there, trying to jump around different states in the long run is going to get you into trouble.

There are many interstate task force agencies that are collaborations between different states' Departments of Motor Vehicles, State Police, and Tax Authorities. They are looking for people trying to use loopholes to get titles in other states. In most cases, using the loophole ends up costing more money and more hassle than just biting the bullet and doing it in your own state. But a lot of people feel like they want to get away with something, so they use these loopholes. Many of them are now getting prosecuted.

We have posted news stories before about schemes involving forming LLCs in other states, putting titles in those names to avoid taxes or inspections. People are getting caught, and it's only a matter of time before they go back and audit your ownership. They could go back four or five years and find that you avoided taxes. They'll charge you penalties, interest, and in some states, it's a criminal offense.

Another thing to consider is that anytime you're looking to do something with out-of-state documents or legal matters, you should get advice from an attorney. Sometimes, an attorney can provide guidance that you may not find online. Some online forums or websites might suggest using certain loopholes, but they may not know what they're talking about, leading many people to get into trouble because they didn’t realize their actions were improper.

Out-of-state titling may seem like a good idea, but make sure it’s for a legitimate reason. If you're truly a snowbird who lives in Illinois and goes down to Palm Beach every winter, having a car there is probably legitimate. But if you're in New Jersey and have a car that you can't get a title for because it's a salvage, and you think maybe you can get an easier inspection in North Carolina, it's not going to work. Even if it seems like it will work, it'll cost you more money and get you into trouble.

This is just some food for thought because we see this happening a lot. It doesn’t really affect us either way. Just make sure you know what you're getting into if you're trying to jump around states. Most states have laws on the books making it a misdemeanor to evade responsibility or requirements for titling a vehicle by going to another state.

If you have any questions, you can reach us on our website cartitles.com. There’s also an opportunity to book an appointment with a certified title agent and discuss any specifics about your vehicle.

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