The Expert Podcast

All right let's talk again about the infamous or famous Vermont registration loophole sometimes called the Vermont title loophole . This is something that has been going on for more than a decade 10 15 years Sometimes we've heard people that have been doing this back 20 years ago . And how does it work and what are the realities of this First of all . This is a process where you're applying by mail to the state of Vermont to get a registration You're not getting a title you're getting a registration And what some people do is take that registration and use it as their proof of ownership . In order to get a title from their state and . Many times this is perfectly fine . It's a valid registration in Vermont . there's nothing wrong with getting one . It's how you use it That's the problem . And if you use it in the wrong way you could be getting yourself into trouble and you want to be very careful of that . First of all , if you bring a Vermont registration to your state any state can decide they don't want to take it . Now the reason they decide might not be correct You can look at the statutes of your state . To see if it's right or wrong What they're telling you . But it doesn't mean that . The particular agent at your DMV that looks at it either doesn't know what it is . It doesn't say title on it So they don't give you a title or they're suspicious of it Or maybe they've seen some of the articles . Look . The Volume of articles that have come out about this process Many major insurance companies Haggerty insurance , Jalopnik car and driver , even USA today have all featured this as a legitimate way to get paperwork . It's not so much about the process itself That's a problem It's what you do with it . If you're using it to try to let's say evade taxes or evade some kind of inspection that's not what it's designed for . It's designed to give you some paperwork that might be usable in your state to get a title . Remember that this process can be revoked at any time by Vermont I mean tomorrow they could decide they don't want to do it anymore . In any state that you bring it to could decide on any given day , they don't want to take it In fact , Over the years there've been many states that have had a problem with it from time to time for a while there was Indiana they had big signs in there . DMV says we don't take Vermont registrations . And then that seemed like it went away And then for awhile Ohio didn't like them for awhile Pennsylvania Didn't like them . Last year we heard some people having problems in some locations in Florida . Usually it works itself out . But any state can decide They just don't like it Especially if you have your address on the Vermont registration locally in your state . And you're trying to get a title in your state from out of state . They could look at that as you doing something wrong . So you have to really make sure you know what you're doing when you're using this , just because you have a Vermont registration by itself doesn't mean you did anything wrong . How you use it and what you're trying to do with it . Could be something that you want to get more information about You might want to get legal advice from attorney . Because you're you're not trying to do anything illegal on purpose but accidentally you might
Don't try to make it more than it is Don't try to make it into something that is . A process to evade something that's legal like taxes like inspection . A lot of times we get people that inquire that we tell them about all the ways you can get a title Like in most states you can just get a bond a title You don't have to mess with Vermont You don't have to pay their taxes . But a lot of times people say I don't want to do a bonded title . I want to do that Vermont thing because they feel like they're getting away with something . If you ever do something that feels like you're getting away with something you want to check yourself and say , look . Am I really doing something that might get me into trouble . You want to use it What is designed for and not make more of it ? And like I said a lot of times people want to use this , even though other methods might be cheaper and faster bonded title is much quicker . It's a much faster and it's really the way that your state wants you to get a title . If you want to try to jump through hoops and do something different . it's . hard to imagine why that would be the case . Even some of these loopholes people going through Montana forming a corporation and then putting in the corporation name it just more complicated . Make sure that you also understand what goes into the tax calculation Oh , look the taxes for Vermont are always going to be more than what you want to pay . There's ways to minimize it . But they're going to go by the book value They're not going to go buy your bill of sale They're not going to go by what you paid for the vehicle What you think is worth . Even if the vehicle . Is in bad shape they're going to go by book value and it can't be in too bad shape because Vermont doesn't register vehicles that are not safe for the road So you can't send them pictures of just a frame laying on the floor of a garage because you're going to get rejected
But also be aware that if you have us prepare the documents for you , it doesn't . Get you a title sent to you we're document preparation company We fill out whatever documents your requests . make sure you're informed about which one you're picking out Should you pick bonded Should you pick Vermont ? The . Other more important thing to keep in mind is that you want to get good feedback from your state of where they currently stand . On this process There's many states we've talked to DMV employees and commissioners all the time . Yeah we're fine Get the Vermont paperwork bring it to us . We're happy to do it . you know we understand that there's difficulties in getting title and if you have this paperwork we're fine . You know many states are , are . Conspicuously intentionally Okay With it . There have been some DMV employees that we know that people have run into that give them a hard time . We recommend . If you're going to do this , bring the Vermont . Bulletin It's an official document on Vermont DMV letterhead that says this registration is the equivalent of a title because we don't give titles on cars older than 15 years . A lot of times if you bring that back and show it to the DMV , They'll read that and say oh now I understand this registration is their version of a title in a flies through half the time when we have a client , tell us that they had problems with using the Vermont process in their state . Once they go back and show them this form and give them the documentation Sometimes bring them a copy of their own statutes . It flies through with flying colors , but you want to get an idea of where your state's going to stand on this . If you want to know for sure in advance . Of trying the process And then if you're any kind of a hesitancy you're concerned about , if it's going to work , look at something else look at a bonded title Look at a court order title Look at a prior owner contact . There's other things you can do . and , you know look at the articles we have on our website car and driver Jalopnik Haggerty insurance USA today . they all talk about how they've used this process and these are legitimate people These are . editors of magazines These are insurance brokers . These are major , journalists who have been through this process and they know . what the pros and cons are , and you want to match that up with your true intentions of the vehicle . The one thing you don't want to do . Is you don't want to get that Vermont registration and the license plate and put it on the car and drive around . Because almost every state that we're aware of . If you use the plate to drive with , that's a violation of law because if you're a resident of that state , And you don't have a legitimate . Address in another state you have to have your car registered in your home state . And if you drive with it it's subject to impound and seizure and you don't want to have that happen So be aware it's not intended to do that another little secret . And if you order from us we will do this for you . If you receive your Vermont registration . And you immediately transfer it to your state . There's a method you can use to get your registration fee refunded . From Vermont . So we give you the forms to do that . If we prepare the documents for you . So you want to switch it over right away because if you do it you might be able to get money back . Keep in mind we're a document preparation company Only we don't print titles We don't issue titles Those all come from the government . We prepare documents at your request whatever you want us to prepare , we'll do that . You can do this all yourself for free , or do we do it as a convenience for clients who wish to have somebody else ? Print out documents for them . And we're glad to be of assistance , but just to make sure that you're not overestimating . What the process is . Use force not designed to let you get away with something that's illegal . And if we hear about it we're not going to do it And we have clients all the time Tell us well , I got this car , you know it's a . we're a repair shop and you know this comp this customer left a car here and we don't want to go through the mechanics process because it takes too long So we want to do Vermont we're off that deal . Right now we had a client call us up the other day . from a state that had an 8% sales tax Well I don't want to pay my 8% I'd rather pay . 6% to Vermont and I want to make up a fake . bill of sale Cause my bill of sale came from an auction it's too high . We're not interested in that because you know you're doing something wrong and if we know about it we don't want to help you do that . Many people order online and and you know whatever they're doing . if anything's illegal we're not going to process the order We're going to cancel it So make sure what you're doing . Is legal and proper because a title is a serious thing It's a government document and you don't want to be doing anything wrong . With a government request cause you have to sign the document . Certifying that what you're saying is true . And you don't want to have your title revoked later because that can happen .