The Expert Podcast

Before you start the process of using the so-called Vermont loophole in order to get a vehicle title, be aware that you may have a problem switching that Vermont registration over to your state. And why is that? Well, first of all, the document you get from Vermont is not a title; it’s a registration, not a title, and it’s going to have your name and address on it in the state where you live. It won’t have a Vermont address; it’ll have your name and address on it, let’s say, in Indiana, wherever you live. Now, what you're in theory going to do is...

You're going to bring that to your state to say, "Look, this is my ownership proof. I want to get a title." And most of the time, that’s going to work. However, if the particular agent or the office or the location, or even your entire State DMV, is suspicious of this because, wait, you have a vehicle that you just got a registration for a month ago, you live in this state where you're getting the title, you don’t live in Vermont, and this vehicle was not last titled in Vermont, they’re going to put a red flag and they may do some other research. It may turn out that you get your title, but it also may turn out that they make you jump through a bunch of hoops, give you a hard time, and reject it. There are some states that just flat out reject it. Those states usually rotate, meaning that there are usually two or three states that at any given time reject them, and then later on, they change their mind, but then another couple of states do. For example, last year, there were signs in the Indiana DMV right on the window that said, "We don’t accept Vermont registrations, period." Those signs are now gone. There was a time when the state of Hawaii just flat out rejected them; now they accept them. Recently, there were reports that the state of Florida didn’t reject them, but they said, "If you have a Vermont registration, you have to have these other documents now."

A lot of times, you might think, "Well, can I find out in advance if my state’s going to accept it?" Well, the problem with that is even if you ask a representative or an agent or a clerk at the window of your DMV, "Hey, can I bring you a Vermont registration and get me a title?" that’s all hypothetical. The person you talked to on that day, they may not know the answer to the question. They might say, "No, it has to be a title," when in fact, it would have worked, or they might say, "Yeah, no problem if it comes from another state, we’ll do it." But then when you actually bring them the registration two weeks later or three weeks later, there might be a different person, or they might have a different policy. So, you’re not going to know in advance. You just have to try if you want to go that route.

When you try, you want to make sure you have all the paperwork done correctly. For example, like we mentioned in Florida, they require extra documentation to get a title in Florida if you’re bringing them a Vermont registration. If you bring them something from any other state, it flies right through. Bring it from Vermont, and they put extra scrutiny on it because they even use the word "fraud." They have a bulletin that says, "We’re worried about people using this Vermont registration for fraud," because some people do. So, you want to make sure that you recognize that any DMV is going to be skeptical of a Vermont registration because they know the deal. This loophole is not a secret. If you know about it, the DMV knows about it. This has been going on for 20 years, so any DMV that sees it, they’re going to say, "Wait a minute, let’s take an extra look at this."

Do you want to use a process that’s going to make the DMV even have more scrutiny on your file? As you know, DMV is a government agency; there’s bureaucracy there. It’s already hard enough to get a title. Do you want to make it harder by bringing them something that they’re going to be suspicious of? The reason I say that is because there are other methods you can use to get a title. Our website lists them all out. You may look at all those and still say, "Well, I want to do Vermont anyways." That’s fine, but don’t disregard the other methods just because you think Vermont is a magic bullet that’s going to fly right through. The states that get Vermont registrations very frequently will put extra attention on your file because they think you might be trying to avoid something by going to another state. They’re going to look at your registration and say, "Look, you live in Texas, you have a Texas license, Texas address, this vehicle is from Texas. Why did you suddenly get a Vermont registration and then bring it right back? It doesn’t make any sense. There must be something else going on." So, they might do some extra research, and whether or not that’s something you want to do, that’s up to you. But be aware...

There are other methods that might be more direct, that might be more straightforward. And also, don’t forget the fact that if you go through Vermont, you have to pay Vermont sales tax, which is a big, big bill because they base it on full retail book value. Your car might not be in retail condition; it doesn’t matter. They’re still going to charge you retail book value, and that expense you have to factor in as well. So, the Vermont process is notorious and famous, and people do it all the time, but don’t jump right into it just because that’s the only thing you’ve heard of. Do your research, be an informed consumer, use our website as a free consumer resource, and that way, you won’t get forced into doing something that might not be in your best interest in the long run.