The Expert Podcast

So what do the state of Vermont and Montana have in common? Well lots of things They have nice mountains. they are very rural There are great places to go into nature In fact both states. The word for the states I have the word mountain in it. Vermont means green mountain Montana means mountain So that's the comment but that's not what we're talking about Is it we're talking about car titles vehicle titles. Why did those states come up over and over and over when it comes to vehicle titles Well, it's because. People who have some problems with their vehicle titles Sometimes we'll use a procedure. The titles are registers. Their vehicle in one of those two states Why is that? What are the pros and cons? Why would you maybe not want to do it? In fact, a lot of what people do with Montana or Vermont will can get you into trouble If you're not careful Now there's a good use for these incidents. There's some. title methods that are actually faster cheaper easier, and. Less likely to be flagged by your state DMV then Montana or Vermont. A lot of times people will use Montana Vermont because it's a loophole and they feel like you're getting away with something, but there's a big downside to both of those states Let's talk about those. First of all. The Vermont process, as you've seen before on our videos. Is a method to use to get a…ownership record. From a state. That you can use to get a title in your state. Let's say you buy a vehicle you don't get the title. You get a bill of sale. You're stuck You go to your state Hey I got a bill of sale I want a title. They're not going to give you anything with a bill of sale Bill of sale means nothing. It's just a receipt Somebody wrote up that says you gave somebody money. It's not a legal document for a title. So your state's not going to give you a title with a bill of sale. But what you can do and what people is that bill of sale to apply by mail. You don't have to go there. Two. Vermont to get a registration. As long as the vehicle is 15 years old or older. Right now that means 2007 and older 2006 5 4, 3, 2 and older. They'll give you a registration license plates everything…And you can take that registration that shows you're the owner bring it to your state to exchange for a title. Well it sounds great Right Why wouldn't you want to do that Well a couple things first of all, you're going to pay sales tax to the state of Vermont heavy duty tax. They don't do this for. Entertainment in Vermont they do this because it's a revenue generating system. They get registration fees they get taxes and you have to pay tax. No they don't calculate it based on what you think the car's worth They don't calculate it based on your bill of sale. They calculate it based on. A pretty healthy book value and we've done other videos on how to calculate that. you don't want to pay that much money in taxes. Right. We'll get to Montana in a second For those of you who wanted to find out about Montana, hold on. We'll get to that momentarily. So why would you…Want to do Vermont? Well maybe you think I can. Send him pictures of my car or my bill of sale to show him it's not worth that much money. Don't make that mistake either because they only register. Proper…Equipment proper condition road worthy vehicles. A lot of times somebody will send them a picture of a bucket of bolts and a frame on their garage floor and say look, my car is not worth anything. Well guess what Now you just voided your application because now no matter how much taxes you pay they're not going to register it because your car is not. Legal for the road It's not roadworthy. So the reject it no matter how much taxes you offer to pay them. So don't try to do pictures or anything else. Paying the taxes I'll pay those. Now you pay the taxes you get a registration…You get license plates and you think well wait a minute I got license plates I'll just drive around on those plates in my state Wrong Do not do that…Those license plates are valid technically but they're valid. As Vermont plates you're not a resident of Vermont meaning that your state where you live. Has a law on the books. That says if you're a resident of that state. You have to have it registered in your state in order to legally drive the vehicle. If you registered in another state and you drive. That's violating the law We're not attorneys not giving you legal advice Check this for yourself. So. A lot of people think I'll just slap those plates on there and drive around I'll cruise around on Vermont plates Well don't think that people don't know about it. It's not a secret. This has been not You'll see on our website car and driver road and track Haggerty insurance Jalopnik all the major automotive publications even USA today. Publish stories about this Vermont loophole for many years. all the state's DMV commissioners they know about this. So they pass along the word. Two. Enforcement. police. DMV enforcement If you see a vehicle with Vermont plates If it's registered to somebody in the state, give a ticket and impound the vehicle seize the vehicle. Well you might say well I won't get pulled over They won't check me out Well they don't have to. States use it. technology called ALP our automated license plate reader. Police cars and some other municipal vehicles, sometimes tow trucks sometimes. other vehicles, they have cameras on their cars all four sides of the car front back side to side. That as you're driving. They record and identify every license plate that drives by them or that is in front behind side to side. There even some fixed locations that have license plate readers at, intersections at parking lots are on tens of thousands of cars every day. In addition to the AOPR It also does. A another technology that's called OCR optical character recognition. That means when it takes a picture of your plate it's not just a photograph of your plate That's 1, 2, 3 ABC. It actually can read the letters and the state that it's from. So if it sees her for my license plate 1, 2, 3 ABC. It runs the plate to see who it's registered to lo and behold it's registered to Joe Smith in Iowa. Which is where you're driving. Well guess what That's a red flag. And. There are many serious consequences for. Using an out of state registration to drive around in in most states your vehicle can be ticketed It could be towed. Some states allow them to seize the vehicle…And some states can tow it but now you don't have a title to get it out of towing So they just rack up storage fees until the tow truck company owns it. So there's a lot of downsides You go to present it to the DMV in that state the title. division, they won't even accept it. And that sometimes varies by location We have, you know some states we see that applicant will go to one location They say no this isn't a title We can't do this. And then the leave they'll go to another location or another, another window And they say yeah this is okay So it's hit or miss. So be aware that. You're at risk of paying all that tax all that money to Vermont. And…maybe it's not going to go through…So…what if it does go through well that's great Well now you have to pay the fees all again in your state. Okay I'll pay those fees. You know what you could have started this whole process a lot easier by do using another. Title process There's dozens of ways to get a title without having to resort to that. What they call a loophole. you could do a bonded title in most states and not pay any tax to Vermont. Any fees. And no you don't have to put up thousands of dollars as a bond Usually it costs hunks…for fees. You can also do a Magister. title. Sometimes called a court order title. Where you can file a petition to have a judge sign a paper that says you're the owner You bring that to DMV you get a title. Certainly there's some. Red tape that you have to do. But. In the end it's a lot better than putting yourself at risk for doing an out of state process for many clients. And sometimes it's a lot cheaper and faster. Look for Vermont You first have to wait for the Vermont paper to come back and then bring it to your state and wait for them to issue a title. It could take three four weeks. Some of these other processes you can do in three four days. So. Again we're playing devil's advocate We want to give you the options. If you decide after understanding everything in detail you still want to. Go through Vermont. It's it's available to you A lot of people have done it over the years. What about Montana? What about Montana Well, Montana. It is vehicles 2008 and newer 15 years of newer that don't qualify for Vermont. And the reason that my tan is popular is Montana is a state that has no inspections no sales tax. no emissions. So no matter where you are in the country, you can. File for a title Montana What's the catch Well the catches this…First they don't title vehicles for non-residents So what you have to do is you have to form a corporation in that state which is pretty cheap a hundred 150 bucks maybe. And put the car in the name of the corporation. In Montana, then you have to apply for title. Get the title. And then once you have it you can sign it over to yourself. And now you're the owner of the vehicle and you could bring it to your state…What's wrong with that? Well, first of all you have to have the old title signed over to your corporation. Well many times the reason that you're trying to do this is you don't have a title. Or maybe it's signed over to you personally. So now you can Form a corporation. You don't have a title you get a surety bond Do you put it in the name of the corporation Now you have a bonded title for Montana. Great Now you can transfer it to your state right? Maybe. There are eight states in the country that don't do bonded titles and by don't doing them they also don't take them from other states. So, if you were going to do a bonded title anyways just do it in your state…Well, what if you decide I'll get that bond a title and I'll register it in Montana slap some Montana plates on it and I'll drive around with Montana plates Well now you have the same problem as Vermont only it's worse. Because of the fact that Montana is a no sales tax state. The DMVs and the other states are even more wary. About Montana license plates because they know a lot of people try to use Montana for tax evasion. They try to go through Montana…And you have lower insurance rates because your vehicle is registered Montana. Rather than. Los Angeles or Dallas or Atlanta where their insurance rates are higher and they save money The problem is if you're driving around a Montana plates same thing police officer sees it and ALP our reader sees it, and now you're jammed up because they pull you over and they say wait a minute why is this Montana car here in…Georgia? It doesn't make any sense. You can make up a story say I'm on vacation but yeah You have a Georgia license though Right? So what's going on And if they discover that the reason you did it was to evade taxes. Not only might you have a penalty but some states that's actually a criminal. a criminal act to evade taxes. So do you want to be at risk for that? Again, people make that decision every day. Whether it's a good one or bad one We're not attorneys We're not giving you legal advice. We're just trying to tell you what goes on with these processes. In addition. So you have insurance No problem I'll call Geico put insurance on my car. What's the address What's the address of the corporation. And when you formed a Corp, you can use you know, a mail executive suite in, Montana They you know, that's part of the deal…But now when you get insurance that's supposed to be your what's called garaging address meaning that that's where your insurance company thinks your car is and they base your insurance rates on the car being there. Not in Fort Lauderdale Florida. Or not in Chicago Illinois, or not in Santa Monica California. So if your car was in one of those places your insurance rates will be through the roof. More opportunity for theft more car crashes higher repair rates a lot of reasons why. Insurance rates are higher in those areas. Urban centers. So now you have an insurance policy that you think not only did I not pay taxes but I got away with cheaper insurance. So you're driving your car an accident It gets damaged It gets stolen. Maybe. Call your insurance company Hey I'm going to put in a claim. Hey no problem. See your policy number. where did this happen? Oh…1200 Figaro Boulevard Los Angeles Oh. Okay Why was it in Los Angeles? So now they assign it. To SIU. Which is investigative unit. For claims and they're going to see…what was the use of that car. And they're going to find out that. You're not from Montana. You titled it registered it in Montana to, for whatever reason they don't care about the taxes or anything but they care that you only paid insurance rates for. A declaration of that address being in Montana but you really live in…Los Angeles or Dallas or Atlanta or Fort Lauderdale or New York. And they're going to find that out You're going to see your license They're going to look at a LPR records that show up where you're driving When was the last time you were in Montana…All right. And they'll not only deny your claim but they will retroactively cancel your insurance. So they're going to say that your whole insurance policy was no good to be. with because you made misrepresentations on the policy. One more reminder We're not attorneys We're not giving you legal advice. Get good. Consultation from an insurance agent and attorney that knows this stuff, but we've seen it happen. The other reason why these cars are. Our targeted is because there are some people that buy very high end vehicles expensive vehicles. exotic Supercars that are worth a hundred 200 grand or a million dollars, big motor homes class a diesel pushers that are worth three 400,000. And. They want to avoid sales tax So 500,000…Let's say for a big Prevost RV motor home. Time 6% sales tax in most states that's 30 grand in taxes and I don't have to pay I saved 30,000. Well…Again it's not a secret. All the enforcement agencies know this So if they see Montana plates, not near Montana. They're gonna look into it. And if they find that the driver. Is. licensed in the local state. And they're going to ask questions about the vehicle whose vehicle is it You've seen on cops and on live PD and all the other stories All the other TV shows when a cop pulls you over they ask you who's vehicles is where are you going What are you doing? And if the stories don't add up, they tow your vehicle. And it gets impounded. If they find out that there was something more devious going on they can seize the vehicle. Again we're not trying to be the bearer of bad news or to be dramatic or exaggerate. Yeah things that could go wrong But if you're going to use one of these methods you want to make sure that you're you're informed you're educated. You're not doing something just because it sounds cool that you read on some forum or some internet person told you you should do it. And not be weird to go ahead with it. Look people do these all the time, but just be aware of what the details are. Right That goes into all this. Now what if you do decide you want to go ahead with it? Well, How are you going to do it…All of these methods you can do yourself for free. Vermont Montana you can do it all yourself for free. The internet our website has instruction Step-by-step how to do it. It's not really that hard. Not really that hard. It just some paperwork You gotta fill out send it in. And you have to sign it The one thing that, that nobody can do on your behalf is sign your name You have to sign your name on paper The DMV does not take…Electronic fax email copies They do everything on paper. Here's an example of a form This is a Florida form. Every…state has paper documents. There are some exceptions State of Illinois has some things that are electronic Alabama has a little bit you can do it yourself You can download the form. You can print them out Our website hassle the DMV has them. filament. It's not really the hardest boxes to fill in. And you send it to the state, along with the fees What are the what. Do you send it and while you send it, the application. If you need a bill of sale you said that If you need insurance you send that it gets mailed to either Vermont or Montana or whatever state you're talking about. And they email you the documents. Certainly you can get assistance for doing that. There's a lot of ways to do that. Obviously our website assist people with that. Most cases less than $200 that we can fill out all the forms. You could pay more. For presumably. I don't know. Maybe more full service but you still have to sign the forms and mail them back to somebody. You can mail them back to the company that's doing it for you or you can mail it directly to DMV I don't know which is better. but sometimes those services cost five 600 We've seen them over a thousand for that service with the fees That's fine But the fees are normally 50 $60 for the actual title fee. What they don't do is they don't pay your sales tax in Vermont You have to pay the tax…right in Montana There is no tax. So if you do decide you want help. By all means avail yourself of it but just realize what you're paying for. How hard is it really? Right. Here's an example of a Florida form It's two pages. One page. The second page is mostly just instructions So it's not really even that hard It's really one page. Most DMV forms are one page forms. There might be other pages attached with the instructions, but that's a good thing It tells you what to do. Like me, you probably have, a convenience factor in your life where your time is worth more than money and you want to pay people to do things, pay people to cut your grass pay people to, you know maybe. trimming your hedges change your oil. That's fine, but you don't pay somebody a thousand dollars to cut your grass. Right. Filling out these DMV you could do it yourself or you can find. options that are a little bit cheaper. These options Vermont Montana. Are. Very common You'll read about them on all the forums on your gear head car form on your motorcycle forum on your import car forum People say yeah I do the Vermont loophole Do the Montana loophole. That's. But you don't know. If the person there knows all the details, we have people all the time, they come and say well I can do this. No you can't. The law says you can't and it'll get rejected. We get. Eight or 900 calls a day. About a hundred of them are people that already did the paperwork themselves They sent it in to Vermont or Montana and they got kicked back. Because it didn't work. Because they did something wrong or they have the wrong kind of vehicle. Or they checked off the wrong box and now they say well how do I fix this? It could be fixed, but if you follow the instructions couture, That you're not relying on this to have a license plate to drive around it because there's a lot of risk. I have a customer that. Had a. Seventies early seventies era Pontiac Wasn't a really expensive car that it was a Bonneville or Catalina or something. And. Did the Vermont process. Pay the tax which is you know, three. bucks. And got their plates. And put the plates on and we're driving it around went to a car show. Well guess what? There's a lot of enforcement at car shows lately. Why is that Well…The. Enforcement is now starting to kick in for modifications and emissions, because they're trying to get all these old cars off the road so they can sell you an Evie electric vehicle. So there. Inspectors or cruising car shows They see a Vermont plate. They write it down they check it out. They towed the car from the car show have a title because all he had was a registration. And he scrambled around to exchange it for a title in his state. It took. 28 days to get a title. The tow yard was charging $30 a day It was a thousand dollars in towing fees. Towing and storage. And he was lucky to get his car back because after 30 days, the tow yard was allowed to auction off his vehicle. So make sure that when you using a non-standard type process anything more than just walk into your DMV with a title, walk out with a new title, anything non-standard that You know what you're getting yourself into do your homework. You can check our website We have consultation we have videos We have all the forms that way You'll know you're not getting yourself into something that could be a problem Again we're not trying to be the bearer of bad news We're trying to save you from. Putting yourself in a bad situation accidentally without knowing it. Because that happens a lot when you don't know what the details are. Put your comments below let us know what you think about these two prompting that…you're considering and what you think are the pros and cons or if you had success with it. or not check out our next video about lean release services on a vehicle and court ordered title services on motor vehicles.