Understanding Vehicle Titles:Today we’re going to talk about a couple of types of titles that you may be running into if you’re buying cars at Copart or IAA or you have a car that came from there. Many times these are called junk or parts-only vehicle titles. In some states they’re called non-repairable. For example, in Florida they call them certificate of destruction. There’s a version in Kentucky called a Kentucky red title and that’s their version of what’s called the non-repairable certificate.
Impact on Different States:What does this all mean and how does it affect different states? Well, a vehicle that goes through an insurance claim process where the insurance company decides they do not want the vehicle back on the road can issue this designation called a junk or parts-only or non-repairable and they put it into a system that goes to all 50 states.
State Regulations and NMVTIS:Here’s what Tennessee says about it in their state. This is from the Tennessee Department of Revenue. They talk about the other states. Kentucky red titles are the equivalent of a Tennessee non-repairable title. They’re damaged beyond repair. Now, you may find vehicles that have no damage that have this, and we’ll talk about that.
National Motor Vehicle Title Information System:A vehicle that is not repairable may not be registered in Tennessee or really any other state. Why is that? Well, there’s such a thing as the National Motor Vehicle Title Information System, and that is a federal government record system that takes information from one state and transmits it to all the other states.
Purpose and Coverage of NMVTIS:Every time a vehicle is titled, changes ownership, or is registered, all states get that information from this National Motor Vehicle Title Information System. And it’s originally designed to prevent stolen cars and title fraud and different types of problems that somebody would want to know about.
Legal Implications and Enforcement:What happens is anytime there’s a title brand put on a car, it goes to all 50 states plus Guam, Puerto Rico, and Washington DC participate in this. And what does the law say? The law says that information within NMVTIS, the National Motor Vehicle Title Information System, shall be available to jurisdictions, states, federal and local law enforcement, insurance companies, and prospective purchasers.
Protection and Prevention Measures:So, it’s saying that this information is out there. It’s for people to see. It allows jurisdictions to verify the validity of titles prior to issuing new titles. It prevents title fraud and auto theft. So that’s the reason for having this. In addition, it tracks odometers to make sure nobody’s rolling back mileage on vehicles.
Minimum Capabilities and Functions:And the federal law that went into place has five capabilities at a minimum. Five minimum capabilities. First of all, validity of a title. Second, the title state for a vehicle. What state is a title in? Number three, whether an automobile is non-repairable or known as junk or salvaged vehicle. That’s the number three one. And it repeats it again.
Data Transmission and Record Management:Has it been reported as a non-repairable or junk? It’s so important they put it twice on the list. Now, it also does something else. When a vehicle moves to a new state, the NMVTIS notifies the old state, allowing the old state to inactivate the title record, which means you can’t get a duplicate title in the old state.
Vehicle Safety and Inspection:They can purge the record. So, if you move from one state to another, your old title becomes invalid. And why do they want to have this out there? Because it gives buyers the ability to check for vehicle safety and reduce unsafe vehicles on the road.
Florida’s Implementation:Things like salvage or crash vehicles might have safety issues that need to have inspections done or more thorough investigations into the repairs and they check this. This is the procedures manual that happens to be from Florida. All title transactions performed on Florida title vehicles will make an inquiry to NMVTIS.
Title Brands and State Regulations:This will ensure that the vehicle has not been titled in another state since being titled and brought back to Florida because people sometimes will do that to try to remove a title brand. They’ll flip it from one state to another. But NMVTIS prevents that from happening and this includes the title brands.
Brand Validation and DMV Process:When an application for title is being processed, emphasis must be placed on the brands reported by NMVTIS rather than the brand that’s on the title. This is important. Your title certificate, if you have one for the vehicle, might not have any brand on it. Might be clear, right? However, the DMV is going to go by what’s in the record, not by what is on the title.
Types of NMVTIS Brands:Brands reported by NMVTIS will be automatically carried forward to the title. There are two NMVTIS brands, which will result in no Florida title certificate being issued: dismantled or junk. And then junk has those different versions in different states: non-repairable, parts-only.
Recovering Title Status:So, how do you undo this? If it’s a junk title, how do you get a title for it? Well, there are two ways to get a junk, non-repairable certificate of destruction vehicle back on the road.
Options for Resolution:One is to get a new VIN number, and the other is to have the brand undone. Why would you need a new VIN number? Well, like the manual said, if you have a vehicle with a junk VIN number, they can’t give a title, but you could get a new VIN number.
Court Order Process:It says if a new VIN has been assigned to a vehicle, you can’t use the old VIN for a title. You can get a new VIN by calling it an assembled vehicle or a kit car, and that’s a process you can go through. Or you can do what’s called a court order reduction, meaning that you can file a petition with the court to have the court override that non-repairable junk title status.
Challenges and Legal Steps:You have to give the court evidence where they will override the reason that was done. And they don’t have to do it, but that’s the only way you can even try to get the non-repairable junk status removed from a vehicle because once it’s in that NMVTIS brand code, and you can see here, number eight is junk, number seven is dismantled, then you can’t get a title in almost every state.
State-Specific Regulations:Well, in every state, certainly in Florida, there are other types of junk or salvage title determinations that some states won’t accept on top of seven and eight. Some states won’t accept reconstructed or rebuilt, right? So, you have to be very careful.
Conclusion:But if you do have a seven or an eight dismantled or junk, you have to either get a new VIN number issued or have a court override that. And there’s a court order title application process you can attempt. Again, it doesn’t always work, but that’s the only chance you have. If you don’t do it, you have 0% chance of getting a title. At least with that, you may have some chance.
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Court Order Title as a Last ResortSo, if all else fails and you’re struggling to get a title for a vehicle, every state has a method you could use that’s called a court order title. Some states call it declaratory judgment, some states call it magistrate title. So, what happens is if the titling agency in your state, normally it’s called Department of Motor Vehicles or Department of Transportation, if they’re not able to give you a title because you don’t have the right paperwork, their laws and their rules don’t allow them to.
DMV Rules vs. Court AuthorityDeviate from that, right? The person who works at the counter can’t make an exception for you just because, you know, you seem like you’re a good person. They have to go by what the rules are. However, the court in your county can override that and they have a procedure for this. This is an example of how that works—this is an affidavit and title application. Now, it’s normally not a pre-done form like this. It’s just one example, but you fill out four or five documents.
Required Documents and Court JudgmentAn affidavit, a complaint for declaratory judgment. You have to fill in all these blanks. You have to fill in an affidavit of diligent search and inquiry. You have to go through all these steps. You’ll also have to get a judgment granting vehicle ownership. So, you have to go through this process along with some affidavit, declarations of interest, and some other documents.
Court Can Override the DMVThe good news is the court has more authority than the DMV. The court can override the DMV. So, if you’re struggling with getting the DMV to not give you the runaround and not give you a title, look, you want one of these, right? You want to get a title certificate in your name. And if the DMV can’t do it, you can bypass them, go over their head, file documents with the court, and you’ll be in good shape.
Filing Without Court FormsNow, keep in mind that the court normally doesn’t have forms where you fill in the blanks like this. You have to type it up yourself. However, at least you know you have a resource and a backup option to get a title if the DMV will not cooperate with you in giving you a legal title certificate for your vehicle.
Used Car Prices Skyrocketing AgainSo, what the heck is going on with used car prices? Remember, back in 2019 and 2020, used car values spiked through the roof and they stayed high for a number of years. The last couple of years, it seemed like they trailed off a little bit. They didn’t actually go down, but they weren’t quite as dramatic. Well, in the last 30 to 60 days, we are seeing used car values again go through the roof. And here’s why: there are auto manufacturers and dealers who are expecting tariffs to affect not only the price but the supply of new vehicles.
The Tariff Effect on Dealer BehaviorWhat that does is put pressure on dealers and even buyers to try to get their vehicle purchases done before the tariffs start to raise prices. That’s putting a leading indicator on used vehicle values. So, if you have a vehicle that is a car you’re looking to trade in, now might be the time to do it.
Good Time To Buy or TradeIf you’re looking to buy a car and you think the prices will go up in the coming months, you might want to move up that purchase to a sooner date. More importantly, if you have a vehicle where you have an upside-down equity or negative equity scenario, you might want to look at seeing if the values have changed. Even if the dealer offered you, let’s say, $20,000 for your car a month or two ago, it might be worth $21,000 or $22,000, which could knock a couple thousand off of your negative equity situation to get you able to get rid of that vehicle, trade it in, and do a lien release.
Learn More & Stay UpdatedIf you have more questions about how to get a lien release or how to transact a short sale on a vehicle, the used car market is dramatically different even this week versus what it was a month ago. And if you have any kind of activity planned for a used vehicle—buying one, selling one, trading one in, or doing a broker deal—you might want to take another look at the scenario to see if it’s different than the last time you checked.
Court Order TitleSo, what is a court order title and the process of trying to solve your title problem? You may have heard this term come up. It may have even been said to you by the Department of Motor Vehicles. Look, if you go to the DMV trying to get a title and you don’t have the right paperwork, they’re going to tell you that either they just can’t give you one or they might tell you about other options. In some states, one of the options is a bonded title. And that’s something we’ve talked about before.
Bonded Title vs. Court Order TitleBut in every state, every county, you can do a court ordered title. So what is it? Well, it’s a process where when the DMV is unable to give you a title because of the fact that your paperwork is deficient, and when I say deficient, I mean you don’t have a title. So unless you have the last legal title signed over to you on the back from the last owner, the DMV is not allowed to give you a title. No DMV in the country can give you a title with just a bill of sale. A bill of sale is just a receipt from somebody that took your money. It doesn’t mean any kind of ownership. So a bill of sale, even though it sounds official, is not sufficient for a government agency to hand you a title. So, a lot of times they’ll tell you, look, if you want us to help you get a court order title, now sometimes this is called a declaratory judgment or a magistrate title or some other term, but it’s a process, legal process offered by the government. Nothing illegitimate about it. It’s perfectly good. In fact, many times the DMV will tell you to do this if they can’t help you.
Legal Standing and DefinitionSo, what are the details? Well, here’s a brief overview. It’s so popular now, so common that it has an official reference in Google AI. Google AI overview says a court-ordered title is a legal document, there you go, declaratory judgment issued by a court that directs a DMV or similar agency to issue a title to a person. So, if the DMV can’t give you a title because of their own rules, you can override that by getting a declaratory judgment from the court.
When a Court Order Title Is UsedThe order is requested when a title is missing, damaged, or when there’s a dispute over ownership. That’s why it’s used. Here’s some more details. When a court order title might be necessary: missing or damaged title. If you bought a car and didn’t get a title when you purchased it, this is the perfect scenario to use a court order title. It can facilitate the issuance. Think about that word facilitate. If you’ve been getting the runaround from DMV or they’re not giving you straight answers or they’re giving you a hard time, it’ll facilitate it.
Legal Disputes and Title ProblemsIt’ll solve the problem. If there’s any legal disputes. This is usually not the case, but if there’s a divorce or legal dispute where ownership is contested, a court order can resolve the ownership. This is a lot of times the case when there is a lien on the vehicle and there’s a dispute over whether the lien is owed, or whether the lien is in somebody else’s name. It can take a lien off a vehicle as well. Unresolved title issues, discrepancy, or issue with the existing title. If it cannot be resolved directly with the DMV, a court order can override that.
Missing Title or No Title ScenarioVehicle with no current title. A vehicle might be acquired without a title. A court order can be obtained to rectify the situation. That’s 99% of what people do. What are the steps? Now, keep in mind that every county is a little different. This is done through the county court. It’s not done through the state. So, there’s 3,611 counties in the country. Every county is going to do it differently. First, you have to start with a petition. Petition outlining the reason you need a court order.
Supporting Documents and AffidavitsYou have to give supporting documents. Many times that would be a declaration of interest, an affidavit of facts, and other documents.
No Pre-Made Forms or InstructionsNow, here’s the problem. You can’t just walk into the court and say, “Hey, I want to do a court order title. What do I do?” First of all, they can’t give you instructions. Second of all, there are no pre-made forms that the court has for you just to fill in. And that is the biggest problem for a lot of people. What do you do? First of all, there’s no instruction. Second of all, there’s no preconstructed forms.
Why Forms Aren’t AvailableWhy is that? Well, think about it. That court is going to hear a thousand cases in a month. Every case is going to be different. One is my neighbor’s dog bit me. The other one is the guy down the street built the fence too high. The next one is a divorce. The next one is a small claims. Right? If they had a form for every possible type of case that would come across their desk, there would be thousands of forms. They don’t have that. You have to create the document from scratch about what you want to have happen. See what it says right here? Outlining the reason you need a court order. So, you have to come up with that language.
Example Document PackageSo this is an example of a court order title package. These are the documents that are created for the court. Again, this is not something the court has a form for. You have to type it up from scratch. Now, our website, cartitles.com, will give you some suggestions on how to do it. Every county is a little different, but it’ll give you some basic instructions. We also have some videos on our channel that will give you more details on it.
Documents and Court RequirementsSupporting documents. You might need a bill of sale for that. Usually not. Photos of the vehicle, usually not. Usually, they do want a picture of the VIN number proving you’re in possession of the vehicle. It says in some cases you have to go to court. We almost never hear that. We do thousands of these on a regular basis. We almost never hear that the court wants you to be in court. Remember, this is an administrative process.
Administrative Case ExplainedThis is not like what you see on Law and Order where Jack McCoy is doing this big court case with a hearing and lawyers and juries. This is not that kind of case. It’s an administrative case where the court, the judge will look at the records, make sure the vehicle is not stolen, make sure it’s not a salvage or parts vehicle, and they give you step four which is a court order directing the DMV to issue a title. Once you get that, then you have to file it with the DMV. And that’s the other side of this package. You see, here’s the court paperwork, here’s the DMV paperwork. So, you get this first, then you file it with the DMV.
What to Include in Your PackageThe key documents and forms. You’re going to need the petition or complaint. You’re going to need an affidavit of facts. You’re going to need a declaration of interest and an application for title. We recommend that when you send the information to the court, notice I said send, not bring. You don’t want to bring this package to the court. We’ll talk about that in another video or our website will explain why you don’t want to bring it there.
Court Might File for YouWhen you send it to the court, put the title application in that package, too. Even though that’s for the DMV. Sometimes the court will do you a favor and just file it directly with the DMV. Sometimes they won’t. They’ll just send it back to you signed and then you have to file it. But at least if you give them the opportunity, they might do that for you. So hopefully that gives you some information on the court order title process.
Understanding Excessive Automotive ChargesSo, what are some things that you can do to combat excessive automotive charges? If you’ve purchased a vehicle from a dealer, many times there were add-ons and things tacked on to your loan that were not proper. Maybe added on by the dealer, maybe added on by the lender. Where did that put you? That may have put you in a position where you owe more on that car than it’s worth. You have negative equity. You have upside down, underwater—they call it different things. Basically, what it means is you owe more on that car than it’s actually worth. End of story. And it makes you buried in that car where you can’t get out of it. You can’t sell it. You can’t trade it in. The way dealers refer to it, they say you have a firm grip on that car. You can’t let go of that car. And that could be a problem for you. Maybe your payment’s too high. Maybe that car no longer suits your needs. Maybe you need a truck to haul things and you have a car. Maybe you have a sedan and you need a van because now you have kids. There are a lot of reasons why you need to get out of that car.
FTC’s Role in Car Purchase ProtectionSo, what does the FTC say about this? The FTC is a government agency called the Federal Trade Commission. They have a cars rule that requires certain things to happen on a purchase. And if it didn’t happen, you may have some recourse. And this is one of the things that we look at when we do a car short sale. You can take a look at the link below for more information about doing car short sale services and the instructions. But basically, this is from the FTC. This is a bulletin that’s a guide for car dealers. It tells dealers what to do and what not to do. And it has that in the guide. So remember, this is an insider internal guide for car dealers to know what they have to do. And a lot of times they don’t do this. It lays out principles to protect people shopping for cars and trucks—practices that are already business as usual for honest dealers.
Dealer Conduct and FTC GuidelinesHere are the practices. It prohibits misrepresentations. It requires dealers to clearly disclose the price, the actual price you can pay to get the car. It’s illegal—this is important—to charge consumers for add-ons that don’t provide a benefit. You probably have add-ons on your finance contract that didn’t provide you any benefit. You also have to get express informed consent before charging for anything. There are probably things you were charged for that you did not give consent for, especially informed consent. They may have put something in front of you.
Examples of Violations That Could Offer RecourseSo, let’s take a look at a couple of basic examples of what these types of problems could be for the dealer that could give you recourse. So, here is a more detailed breakdown of those four things. It prohibits misrepresentation. It makes it illegal for a dealer to make misrepresentations about topics that would affect consumers’ buying choices. So, when you bought your vehicle, were you misrepresented about things that were important for you to know about your buying choice? Deceptive claims about price, financing, or add-ons are examples. What add-ons did you get? Were you given proper information?
Add-Ons and Lack of BenefitWe’ll skip number two because that’s more about pricing. It makes it illegal for dealers to charge consumers for add-ons that don’t provide a benefit. If the consumer, meaning you, won’t benefit from an add-on, the dealer can’t charge for it. There are probably a lot of things on your vehicle that were add-ons. You have to get, as a dealer, consent before charging for anything. No surprise fees, no hidden charges. Dealers must get a clear and informed yes to what they’re buying and how much they’re being charged for.
Loan Balance and Improper ChargesI’m pretty sure that part of your loan balance that you owe on that car that’s upside down or out of equity are things that were charged improperly. Don’t you think? Remember, this is a federal government rule. This is a big win for consumers. You can expect established standards of truth and transparency. That’s what this is all about. This comes from the federal government.
Disclosure RequirementsAnd here’s the key. These add-ons that are put on top of vehicle price are not required. And the dealer has to tell you they’re not required. So, if they put on any kind of protection package or service contract, sometimes they’ll tell you it’s required. When making any representation, the dealer must clearly disclose it’s not required and the customer can buy or lease the vehicle without the add-on. The disclosure must be in writing. So, this is a big deal. Sometimes your loan amount might be 10 or 15% of it could be from these add-ons. In some cases, things like gap insurance.
Informed Consent and DocumentationWhen they charge you an amount of money, so if your vehicle is totaled, you don’t have to pay the negative equity, it would be illegal to charge that if there are certain exclusions built into it that don’t benefit you. This is a very important factor that a lot of people don’t know about. And here’s the big one. They have to get your informed consent about these add-ons, what the charge is for, how much it is, and how it benefits you. All the fees and costs will be charged over the period of repayment, meaning that if there’s interest on this add-on, they have to tell you about that, too.
Illegal Conduct and FTC StandardsThere’s a lot of illegal conduct according to the FTC, meaning that if the document has a pre-checked box or if it distracts you from knowing what you’re getting into, if they’re talking to you or they show you something else while you have to sign it, you have to have a fully informed yes before the business can charge you. And they have to keep records of that. So, if they don’t have the records, it’s invalid.
Clear Language and Visual RequirementsVisual disclosures, fine print, dense blocks of text, or language hidden where consumers aren’t likely to see it, won’t meet the FTC’s clear and conspicuous standard. So, if you have contracts with fine print that tells you your limitations that’s smaller than where it tells you what’s good about it, it doesn’t work. And they’re going to look at things like how big the text is. Does it contrast with the background? Is it the same color as the background? Is it located where consumers will easily see it? And if it doesn’t, it doesn’t qualify.
Plain Language and No JargonMost importantly, it has to be in plain language. It must use words and grammar understandable to ordinary consumers. They can’t rely on the fact that you don’t understand it. So if they use industry jargon, double talk, it does not meet that standard. So let’s take a look at your paperwork to see how they worded the disclosures. Is it valid?
Waiving Rights is ProhibitedAnd you might think, well, the dealership made me waive my rights. They answer that question. What if a car buyer agrees to waive their protections? The rule expressly prohibits that. It’s a violation of the rule for anyone to even attempt to obtain a waiver of these protections. So, if the car dealer says, “Well, you waived your rights,” they can’t do that. They have to keep records. They have to keep records that they did all this in writing, documented for at least 24 months, probably longer depending on your state. They also have to keep records that the add-ons meet the requirements, copies of all service contracts, gap insurance, loan-to-value ratios. They have to keep everything. And if they don’t keep it, again, it’s void.
Conclusion and Consumer Action StepsSo, this is right from the horse’s mouth from the Federal Trade Commission. These are all things you need to know about when it comes to looking at methods to try to get out of your car loan. Look, you’re not going to get the car for free, right? But if you do have a vehicle you need to get rid of and maybe you owe more on it than it’s worth, these are ways you can reduce some of your principal, maybe work on getting some bids on the car that are higher. And we can work on both of those to help you get out of your car loan, sell the car to a retail buyer, or pay it off with a reduced principal and be able to get that excessive high car loan off of your monthly payment.
Final Note and Related VideosAgain, it’s no magic bullet. It doesn’t get you a free car. It doesn’t magically get your payment erased, but you have to do a little bit of work, request things, do some due diligence, file some documents, and you can attempt to make your vehicle balance be reduced so that it’s closer to what the car might be worth.
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