The Expert Podcast

So the famous Vermont title loophole is over. If you've been watching this channel for the last few years, you've heard us talk about how this thing was going to come to an end. Many states were giving people a hard time about going back three or four years. This shouldn't be news to many of you. We're going to talk about what to do now. What is the new loophole besides Vermont? But before we do that, let's talk about what's happening with the prior Vermont registrations.

Here's how it worked: Some of you may already know this, but maybe you just found out about the Vermont loophole now, or 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. This was talked about on Hagerty Insurance, one of the world's biggest legitimate insurance companies. They talked about the Vermont loophole many years ago, and they mentioned it on the channel.

What you would do is apply by mail to the state of Vermont to get a registration. You're not getting a title; you get a registration. Once you get that registration from Vermont, 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. The problem was 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. People took this loophole because they thought it was the easy way out. In reality, a lot of times, it was harder than just doing it the right way.

Starting in 2017 or 2018, 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 saying, "Don't bring us a Vermont registration; we consider it to be fraud." These were the pushbacks that people got.

We recommended many years ago that you 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. 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 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. A 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. It doesn't have any proof that they were the owners. So, they don't take a bill of sale to give you a title.

What do you do? Even if they wanted to, the DMV couldn't do it. You go over their heads. Who is their boss? Their boss is the court. So, what you do is you file a court order. This is an example of one from Pennsylvania. This is the procedure you follow when you wish to obtain a certificate of title for a motor vehicle if you don't have the old title. You have to prepare these forms. You have to get it notarized. 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 an Oklahoma court order to issue a title.

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 or pre-made document like this one. In most counties, you have to type this up. Some counties have it; you put in the VIN number, you put in your name, and you put in the information.

Support of this application: the applicant would state under oath that he is the owner of this vehicle and came into possession under the following circumstances: Three lines: how'd you get the car? I bought it on Craigslist for $500 or whatever. Verification: I read this application; the statements are true and correct, right? You have to get it notarized. Court order for the issuance of title. Once you get that signed by the judge, you take that to the 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. Is it a little more work? Maybe a little bit.

Is it a lot more powerful? It's a lot more powerful because there's no rejection by the DMV. Couldn't 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 are 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.

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 a checklist of what to do. They give you that. Even in the states where they don't give you that, you can use the 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. 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 are some people that are going to have a rude awakening when they get their letter in the mail from their state DMV saying, "Hey, remember that Vermont registration you brought us? We're revoking your title. We're undoing it." Be glad you didn't do it, especially in the last few years. People still wanted to do it even when they were offered other options. You know, people have the freedom of choice; they can do whatever they want. But now you do 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 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 help at 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 and see how it will work out for you.