PURCHASING A NO-TITLE VEHICLE – Part II

In Part I, we looked at methods to find out if the antique vehicle you're considering purchasing has ever been reported stolen.

Now let's look at getting a title. It might be cheap and easy, or it might be a long, complicated, and expensive affair. It depends mostly on what state you live in – some states make it easy, some states make it very difficult. Unfortunately, state laws and DMV regulations change frequently, so you have to get up-to-date information on your state. What somebody else did five years ago might or might not be true today.

GETTING A TITLE IN YOUR STATE

Each state has their own laws and procedures about title-less vehicles. Some states make it very easy to get a title for a vehicle lacking one, some make it extremely difficult. As of this writing, California and South Carolina are pretty easy. New Jersey is difficult. Ohio is nearly impossible. How about Virginia?

Code of Virginia § 46.2-616 ...no person shall purchase, trade, exchange, or barter for a motor vehicle, trailer, or semitrailer in the Commonwealth, knowing or having reason to believe that its seller has not secured a certificate of title...

Code of Virginia § 46.2-617 ...any person who sells, trades, exchanges, or barters a motor vehicle, trailer, or semitrailer in the Commonwealth without first having secured a certificate of title for it or without legally having in his possession a certificate of title for the vehicle issued to its owner, except as otherwise provided in this title, shall be guilty of a Class 3 misdemeanor.

You need to find out the laws and procedures in your state, and you need to get recent information – the laws and procedures change frequently. You can ask others who live in your state how they've done it in the past, but you should go to your state's DMV and find out the current situation. I've found that telephone inquiries seldom get routed to the right person, so take a day off work and go to the DMV - it's worth the effort. Be patient with them – 99% of what they do involves five-year-old cars, so getting an answer to your oddball request may take some time.

Let's review some of the possible approaches available in your state may take, so you can ask intelligent questions at the DMV.

BONDED CERTIFICATE OF TITLE

A number of states, like California and Nebraska, offer this option. You purchase a surety bond from your insurance agent or a bonding company for a small fee, and submit it with your application for title. The DMV gives you a title marked "Bonded". After 2 or 3 years, the DMV releases the bond, and will then give you a regular title.

This is a cheap (~ $100) and simple way to get a title. The bonding company charges something like $15 per $1000 of bond amount (1 to 2 times vehicle value), meaning a bond for a $5000 motorcycle will cost you about $100. Google "surety bond" and the name of your state to find a bonding company.

This is a great option if your state offers it - it was designed to deal with the no-title problem. You may also have to jump through a couple of hoops listed below, but it's a streamlined process. You can get tags and drive the vehicle. You can sell the vehicle during the bond period.

If you are considering purchasing a vehicle with a bonded title from another state, you might want to check with your state's DMV first, but most states will accept the other state's bonded titles with no problem.

DMV ADMINISTRATIVE PROCEDURES

Some states have administrative procedures where the DMV can issue you a title after you fill out a bunch of forms and jump through a number of hoops.

HOOPS AND MORE HOOPS

The type and number of hoops varies from state to state, so here are some of the ones you might encounter:

Notarized Bill Of Sale

The DMV may require you to present a notarized bill-of-sale. Notarized is important! A bill-of-sale without a notary is pretty much worthless, as anyone can scrawl some words on a sheet of paper. A few states will still accept a non-notarized bill of sale.

Statement of Facts and Circumstances

The DMV may require you to write down a statement of how and when the vehicle came into your possession. You'll want to think carefully about what you're going to say.

Present the Vehicle at the DMV For Inspection

Most DMVs these days will require you to bring a no-title vehicle to the DMV so that they may examine the serial ("VIN") number, check for altered VIN number, and then check the NCIC and NMVTIS databases. You will have to tow or trailer the vehicle to the DMV.

Present the Vehicle to Local Police For Inspection

Some DMVs will want you to bring the vehicle to a police station, so the police can examine the serial ("VIN") number and do the NCIC/NMVTIS checks. You will have to tow or trailer the vehicle to the police station.

Present a Photograph or Pencil Tracing of the VIN Number

The DMV may want you to submit a photograph of the vehicles VIN number. Pencil tracings are obsolete. Some states want photographs of the whole vehicle too.

What Does Your State Want?

They may want any or all or none of the above, or they may have some innovative new hoop for you to jump through. You're going to have to ask them.

OTHER POSSIBILITIES FOR GETTING A TITLE

For states that do not offer bonded titles or “administrative procedures”, there are a number of other avenues for getting a title. Depending on your situation, and the laws in your state, one or more of these might be just the ticket. Read through them, and see if one could apply to you.

MECHANIC'S LIEN

When a garage or towing company customer won't pay their repair or storage bill, the garage may claim a mechanic's lien on the vehicle. After a period of time, the garage can jump through some hoops, and sell the vehicle at public auction. If no one bids on the vehicle, or if the bids are less than the repair bill, the garage may keep the vehicle and apply for a title.

The hoops are typically that the garage must ask the DMV for a certified record of the last registered owner, send a certified letter to the last registered owner, advertise the public auction in newspapers, and finally, hold the auction. In some jurisdictions, the auctioneer must be licensed.

The process is well-defined in most states, so it's pretty easy to follow. In some states, anyone can claim a mechanic's lien for storage or repairs. In other states, only a licensed automotive repair or towing facility can do this.

When I lived in Maryland, I did this to get the title for many cars, trucks and motorcycles. It cost about $75 and took about a month to do. Only once did someone show up for the auction. Unfortunately, about 10 years ago, Maryland decided that you had to be a licensed repair facility to claim a mechnaic's lien. Then I moved to Virginia...

Here is Virginia's Mechanic's and Storage Lien Process (August 2015). Note that it is only available to repair and towing businesses. But see the next method below.

VEHICLE ABANDONED ON YOUR PROPERTY - PART I

Some states have a separate procedure for the average citizen who claims that someone abandoned a vehicle on their property. This is, in effect, a lien for storage, but is handled differently. The procedure is similar to that for a mechanic's lien, but somewhat abbreviated. Note that you're going to have to prepare a statement of how the vehicle came to be abandoned on your property.

Here is Virginia's Abandoned Motor Vehicles Process (August 2015).

As part of the process, your state's DMV just might send a state trooper to your house to do a VIN inspection. If he finds a rusty bucket of bolts, that's one thing, but he's gonna be more than a little suspicious if he finds a beautfully restored complete motorcycle. Wouldn't you?

VEHICLE ABANDONED ON YOUR PROPERTY - PART II

Some states do not allow property owners to claim a lien on an abandoned vehicle. In some states (like Maryland), the property owner must call the police, and the police will have it towed away and sold or scrapped. In other states (like Orgeon), the property owner may call a towing company of his choice to tow the vehicle away. The towing company may then claim a Mechanic's Lien for towing and storage. If you have a friend in the towing business, this might be helpful.

Here's Oregon's Possessory Liens/Abandoned Vehicles information (August 2015)

LANDLORD'S POSSESSARY LIEN

In some states, a landlord whose tenant abandons a vehicle on the landlord's property may be entitled to a lien.

Here's Oregon's Possessory Liens/Abandoned Vehicles information (August 2015)

PROBATE

When someone dies, and you are the heir, the decedent's property is transfered to you by operation of law. Whether this could include an untitled vehicle is a matter for a local attorney to figure out - it might require a parallel civil proceeding (See, Judicial Decree, below). If grandpa left an untitled vehicle in the back of the barn, you might be able to get a title as part of the probate process.

JUDICIAL DECREE

You commence a civil court case, and convince a judge to declare you the sole legal owner, extinguishing all other liens and claims. Unless you're an attorney, you're going to have to hire one – and this will be time-consuming and expensive. This might be a good way for a very valuable vehicle, or if all else fails.

NON-TITLE STATES

There are a few states, like Alabama, Georgia, and Maine, that do not issue titles at all, or do not issue titles for vehicles past a certain age. They give you license plates and a registration, but no title. You can take the registration to another state, sign the back, and transfer it to yourself, or from someone else to you.

This worked well in the past when you could just present a bill-of-sale to the Alabama DMV, and get a registration and license plates. But today, most of these states now require you to take a bill-of-sale-only vehicle to their DMV or police for a VIN inspection.

Some states like Ohio and New Jersey will no longer accept registrations from non-title states at all. So, on your exploratory trip to the DMV, you might want to ask whether they will accept a registration from a non-title state. The trend is that more states will not.

TITLE SERVICES

There are some companies which call themselves "title services". This is a misnomer, as most don't give you an actual title, they give you a registration from a non-title state. In the past, this was cheap (like $75) and easy, but then as noted above, many states stopped accepting registrations from non-title states.

Today, these title services charge much more, often over $500. Not only are you sending them considerable money, you are also selling the vehicle to them – they, temporarily, will be the sole rightful owner! You'd better investigate their reputation thoroughly, perhaps through the Better Business Bureau in their area.

So, on your exploratory trip to the DMV, you might want to ask whether they will accept a registration from a non-title state. The trend is that more states will not.

GET IT TITLED IN A DIFFERENT STATE

If you live in a "difficult" state, and all else fails, you might get a friend who lives in an "easy" state to get it titled in his name is his state, and subsequently sell it to you. This will have to be a good friend, as he will temporarily become the sole owner. And he will have to assume any risk involved with getting the title to a vehicle with an unknown parentage. Often friends don't want this responsibility.

Or possibly, you could establish residence in that state, get it titled there in your name, then move back to your home state, and get it titled there. One problem though, you might have to take the vehicle to the other state for DMV inspection.

Whichever way you go, this will involve a lot of time, trouble, and money. So you are probably not going to do this unless the vehicle is pretty valuable.

SUMMARY

Before you purchase a motorcycle that does not come with a title, you have to do some homework. First, find out if it's stolen, or has some "brand" applied to it that might make it difficult or impossible to get a title. Second, find out whether you can get it titled in your state, and what the process will cost you in time, money, and trouble. Now you can determine whether you want to go through with the deal, or wait until you find a similar vehicle that comes with a title.

Editor's Opinion

July 2017 update - South Carolina used to have administrative procedures for vehicles with no titles. They recently updated their website, and it now says "The SCDMV will not register the vehicle without a title unless you buy it from a dealer or business."

Ten years from now, it will be virtually impossible to get a title for a no-title vehicle. The Federal Government, and hence the States, keep adding new regulations, and the situation keeps getting worse. Antique vehicle enthusiasts are dying-off, and the millenials are not stepping up to replace us. The motivation for states to accommodate our needs is diminishing. If you have a no-title vehicle, make the effort to get a title now - while you still can.

• Sellers – if you don't want to be bothered getting a title, consider that prospective purchasers don't either. You might have to reduce your price several thousand dollars to attract a buyer. Look into the feasibility of getting a title - a day and $100 might fix the problem.
• Purchasers – besides calculating the cost and difficulty of getting a title, and factoring that into your offer price, are you really going to get around to doing it? Or will you procrastinate until it is no longer possible? Antique vehicles require emotional involvement, but business decisions require cold calculation.

Go Back to PART I – Is It Stolen?