The Expert Podcast

So what are the pros and cons of the Vermont loophole for car titles And how does it compare with other methods like a bonded title
Or a court order title or prior to contact So let's start with the Vermont loophole process This is something that you've seen in Hundreds of videos hundreds of articles Jalopnik Haggardy insurance They've all featured it And basically this is how it goes If you have a vehicle you've purchased And didn't get a title when you bought it And you went to your state DMV with a bill of sale or receipt or with no paperwork and said I want a title They basically threw you out and said we don't give titles unless you have the old title That's what you're supposed to have The last title for the vehicle if you don't have it They're not going to give you a new title So You go back home and you try to figure out what you're going to do next And you come across this Vermont loophole that you've see Or read about And the way it works is you apply Through the mail To the state of Vermont With your bill of sale To get a registration for your vehicle You're not getting a title You're getting your registration Once you get that registration You can then use it as your proof of ownership similar to a title To apply to your state to get a title Because what you want to end up with is one of these You don't want just a receipt or bill of sale because without an actual legal title certificate You can't do anything with that car or truck or motorcycle You can't sell it You can't register it Sometimes you can't even get insurance on it Although some insurance agents will sell you insurance on anything If you give enough money So The Vermont loophole comes in handy What are the downsides Well the biggest one that most people Find out quickly is the cost You will have to pay sales tax On your vehicle Based on the full book value of the vehicle not what you paid for it not what your bill of sale says not what you think it's worth What the book value is now there's some different little Kind of tricks you can use with different book values to maybe mitigate that a little bit and lower the cost But It's not going to be based on a hundred dollars Like your bill of sale says How much is the sales tax going to be Well if the book value says your car is worth $7,000 The Vermont DMV is going to charge you 6% sales tax on 7,000 That's going to be 400 something dollars In tax plus their registration fee is another 76 for car 48 for motorcycles Now you're almost 500 bucks for fees It's probably might be worth it in some cases many people Want to do that But You have to factor that in as a negative
Another factor is when you go to take that Vermont registration and bring it to your state Look it's a valid ownership document Just like a title from another state is And the statutes in almost every state says they have to accept that as an ownership document But just because A DMV Regulation says they're supposed to it doesn't mean that the person at the window you happen to talk to is going to know that they don't see a piece of paper that says the word title on it They see a registration So they might say well you can't get a title with this and you might have to go back and forth and get a run around and show them their own laws There's a bulletin you can get from the state of Vermont That'll give Your state DMV some information about That this is valid like a title But that might be a hassle For you some states have even declared no We're not going to accept this We we we heard last year that the state of Indiana puts signs on there Window of their DMV saying we're not accepting Vermont DMV Well when Pressured on that And when they were confronted about it they found they can't just say that The Vermont registration is a valid ownership So they can't say that even if they want to but for hundreds of applicants probably they ran into problems In any state can do that at any time They could give you a hassle About that You can probably Fix the hassle And there's a lot of tricks that you could use to make it less likely We cover those in prior videos Prepare the paperwork the right way include some documents with your application to your state Some certain special documents that'll make them Pass through also do it by mail Don't go in person There's some things you can do to minimize that happening And it's pretty rare but that's another potential negative What's another negative Well I'll only works on certain vehicles Your vehicle has to be 15 years old or older So whatever year it is now 2022 minus 15 2007 So if your vehicle is 2007 and older this will work If it's 2008 and newer You can't do it You can't use the Vermont loophole You have to do something else What about Alternate vehicles There are certain vehicles that aren't even eligible to register in Vermont Certain military vehicles old Humvees Japanese mini trucks You can't register them in Vermont and won't work Also a vehicle that's not roadworthy Now they don't require that you do an inspection They'll take your word for it They're on the honor system but a lot of clients make the mistake of saying wait a minute my taxes are You know $422 My car is all in parts So you shouldn't charge me that much and they'll send pictures Of their vehicle Or a letter explaining that their car is you know not Ready for the road At that point it will get rejected By the Vermont DMV because they only register Road legal vehicles So that's another downside
We'll get back to a few more Downsides of the Vermont process momentarily but what are your alternatives Well we'll talk about two or maybe three alternatives that might be of interest But they also have downside So you have to pick your poison Which one do you like The most or hate the least
One of them is a court order title What this entails is you go to the court in the county where you reside And you file a court case against the vehicle To have a judge declare you to be the owner of the vehicle by court order Once that judge gives you that court order You bring it to the DMV slap it on the counter and they have to give you a title period End of story This will work in any state This will work in any jurisdiction It'll work on any vehicle Now What are the downsides Well first of all it takes a long time You might have to go to court two or three times to get through this process might take you three or four months
It's pretty cheap You probably only have to spend 50 or a hundred bucks on court filing fees And it's almost a guarantee as long as your vehicle is not stolen or sketchy or you have liens on it It's going to work That's what the process is for You're probably going to have to face some bureaucracy of how to fill out the paperwork because they don't give you any blank Fill in the blank type forms You have to start with a blank sheet of paper and type up what's called a complaint or petition And you might need some guidance on doing that You can check out our website for information on that But once it gets in the court system the rest of it they'll tell you what to do You might have to send out some notices You might have to put an ad in the paper But once it's done it's done And now you have a clean title Based on a court order
So It works What about a bonded title Well This is something that works in most parts of the country There's 50 states I believe 38 of them do bonded titles In some form or fashion What you do is you get a surety bond from a bonding agent And instead of having the prior title you use that surety bond to Convince the DMV to give you a new title What are the pros and cons Well the advantages are it's cheap You don't have to pay tax to Vermont You don't have to do the two-step process of going to Vermont and then waiting and going to your state It's all done in your state Downsides are you have to buy the surety bond not going to cost that much If the car is worth you know seven or 8,000 or less The bond will probably cost you about a hundred bucks The downside is if you're looking to sell this car or flip it it might be a problem There are some buyers that don't want to buy a title that says bonded on it Oh that's up to you to figure out what your buyer would want or if you're not selling the car then don't worry about it If you're going to trade the car into a dealership some dealerships don't want a bonded title Now the bonded title designation will only stay on that document for probably three years Some states it's five some states it's less depending on what the value of the vehicle is So check with your state And check with our website for which they even do this So if you're going to keep it for three years anyways don't worry about it After three years it falls off the title Another downside is you're not totally off the hook for liability If you're not sure of the history of that vehicle That may be somebody really is looking for it or there's maybe somebody that's supposed to have it If somebody comes forward And says wait a minute That's my car Then the bonding company will give them the car back or pay them their money And you got to pay back the bonding company So you bought a car that's a barn find and maybe you know it was grandpa Joe's old car and he died three years ago And you know some cousin slipped it out of the garage and sold it to you Well if there's a family member that Deserves that car is entitled to that car with a will or some other document You might run into a problem with a bonded title Also if there's any liens on the car Forget about a bonded title they won't issue a bond For a car with a lien on it
So there's pros and cons to that one as well One other method will mention briefly Is A prior owner contact And what you do is You prepare Title transfer documents From the legal title owner to you and what legal title owner I mean who's new is in the title records Now you might not know that but it could be it could be researched There is some title record for every vehicle You might not have a title You might not know about the title but some DMV in some part of the country has a record of that title It might even be 10 years old
With a person's name Joe Schmo is the owner of this vehicle Now it may have been sold five or six times and flipped and dipped and finance or whatever but some DMV thinks that somebody owns that car And if you can have that person sign certain documents then you will be the owner of that car The downside to that is first of all you have to research and investigate who that is And it's a difficult process for a civilian As a licensed investigator there's easier ways for us to do it But for you to do it you have to jump through a lot of hoops You have to fill out a DPPA form and do some affidavits to get the name And then it's contacting that person in a way that makes them want to help you Look if you just call them up on the phone and say Hey give me a title for that car They're going to think you're some kind of a scammer They didn't own that car for the last five years And like who are you calling me And like you're bothering them So you don't want to do it that way You don't want to Facebook stalk them You don't want to text message them There's a certain way to do it in writing with proper forms and documents and return envelopes You'll see more information about that on our website But the advantage is it's very cheap If you can look that up and get the person to agree to help you it might only cost you $20 for replacement title So that's another option I'm sure as you heard each one of these methods there's something about each one that you didn't like
There's something that's inconvenient or annoying or pain in the neck or I don't want to do this Probably is but You gotta pick one The title's not going to magically show up on your desk If you don't have the old title so Buckle down read through them See which one is the best one for you Based on what you feel like doing And go for it because the longer you wait without having a title The more chances some of these loopholes go away Some of the availability goes away Some title records get deleted over time And it could be harder to do this in the future Then if you do it sooner Look all these things you can do yourself There's companies out there charging five six $700 to get you a title You can do all this yourself With the proper education Proper instruction proper knowledge proper discipline If you want to pay five or $600 to get a title go ahead But You can do it yourself with some research And that's what our website is for to give you that research So Look at all your options Vermont loophole is one of them Not the only one See which one appeals to you the most And just start working on it It may take some time May take a few weeks may take a month But the sooner you start working on it the sooner You'll have one of these magic Legal title documents in your hand and that's what you want That's the reason you're you're trying to do all this is to get you a title in your hand So you don't have to worry about the ownership of the vehicle And Having no way to go forward after you fix it up Restore it Get it ready for the road
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