The Expert Podcast

So, is the Vermont registration loophole, the Vermont title loophole, actually cancelled or not? There's a lot of conflicting information and confusing details online about the eligibility or cancellation of the actual Vermont loophole. If you actually call Vermont and ask them if you can register a vehicle, they'll say yes, and technically, that's true. However, the new requirements differ for out-of-state residents. So, how did we get here? Let's delve into this out-of-state registration certification for Vermont. But first, let's talk about how we got here.

For many years, many people used a loophole by going through the state of Vermont to get a title for a vehicle that they had defective paperwork on. So, if, let's say, you lived in Florida and you had a vehicle you bought on Craigslist or Facebook and didn't get a title, what you do is use this little kind of shell game where you send your bill of sale to Vermont. You get a registration, not a title, from Vermont, and then you kind of quickly do a runaround to go to your state DMV to switch it for a title. And for a long time, people did that. But about three years ago, other states started grumbling about it and said, "Look, this process is being used to evade some of the requirements for our state, so we don't want to accept it."

How bad did it get? Well, here's what happened in the state of Florida. They issued an information notice for fraud alerts for Vermont registrations. They considered it fraud if you got a registration for a 15-year-old vehicle and then switched it to Florida. In many instances, the registration is being issued to persons who did not present a title to Vermont, who do not live in Vermont, nor were the vehicles ever located in Vermont. So, Florida said, "Don't bring us one. We're going to consider it fraud." Due to the possibility of fraudulent transactions using registrations, effective immediately, additional documentation is now required. This came out in 2022.

But it went further. The states and the federal government put pressure on Vermont to change the requirements. So now, what are the requirements if you want to apply for registration in Vermont? You now have to get this out-of-state registration certification signed before you can apply. And it has to be signed by your state motor vehicle department, your home state. Your home state DMV agency commissioner has to sign this form certifying that they do not require residents to register the vehicle in their home state. So basically, you have to get a permission slip from your home state DMV to say, "Yeah, it's cool. You can register this vehicle out of state and then flip it back to your state."

Now, technically, you could register a vehicle, but if you don't have a Vermont driver's license, they're going to require you to have a signed permission slip from your state. So technically, is the Vermont registration process cancelled? Technically, no. But if you're not a resident of Vermont with a Vermont driver's license, you can't do it because your state's not going to let you do it. And you have to have your state's blessing before Vermont will do it.

So, what does that leave you? Well, you can check out our website, cartitles.com, for the other methods that are available. And even before this happened, with this new Vermont policy, we were telling people for years, "Don't do Vermont. It's not the best way to go because even when you could do it, first of all, you have to pay their sales tax, which is a lot higher than your state sales tax. You also have to pay their registration fees. And then you had to bring it to your state and hope that they accept it." Well, we know Florida didn't accept it because they considered it fraud. Many other states would give you a hard time and give you the runaround. Some states would actually flag that VIN number and not let you register it.
In addition, we're hearing some news that people who did use the Vermont registration loophole in the last year or two are getting revoked by their states. Some of the titles that were issued now have to go through the regular process, which is really not that much harder. It's about the same number of documents as Vermont, and you don't have to pay sales tax at the same rate. So, the short answer is that the Vermont loophole registration part is over because your state has to give permission to Vermont to give you that registration.

So, to clear up anything, the Vermont loophole is over. There are other methods. These other methods were always available and, in most cases, were cheaper and, in most cases, faster because you don't have to wait for Vermont to process a registration and then switch it to your state. You can go directly to your state to do these other things, and you can look at those methods on our website. Of course, as always, we give you the instructions so you can do this all yourself for free.

We did this for many years. Even with the Vermont registration, you know, more people actually use our website as a free consumer resource to do the Vermont thing themselves. Some people, out of convenience, wanted us to fill out the paperwork form because, for some people, time is worth more than money. So, we're glad to help either way. But regardless of how you proceed, use our website as a free consumer resource. Get the instructions and the forms. We have videos that'll walk you through it, and that way, you can be in good shape without forgetting your title.

Of course, if you have questions, you can call our customer service line. We have a number of great people that answer the phones, give you some information, and help you with titles. And we know how hard it is to get titles from DMV because it's a bureaucracy. You know, the DMV is a punchline of jokes. They use it in sitcoms to show how hard it is to get titles from them. So, use the resources available to you online to make the process a little bit easier.