For the past several years, it’s been an open secret that Vermont is America’s Department of Motor Vehicles. Everyone from Doug DeMuro to myself have talked about registering some crapbox or school bus using the once-magical Vermont DMV. Seriously, Vermont was willing to register just about any vehicle to any person living anywhere in the United States so long as they could fulfill some very basic requirements. This has been a godsend to anyone rescuing a barn find motorcycle, saving a car from the crusher, or building a bus into a motorhome. Unfortunately, not everyone had honest intentions and many people used Vermont to register stolen cars or to run a weird quasi DMV of their own. Now, because of these people, Vermont has closed up its DMV to outsiders.
Nearly three years ago, I was a fresh face over at Jalopnik. My girlfriend (now wife) bought me a school bus and I bragged to my colleagues about how I made it legal to drive thanks to Vermont. Normally, you would need a CDL to drive a large school bus, but thanks to Vermont’s then incredibly loose rules, my bus was easily registered as a motorhome.
This shocked my colleagues so much that my editor told me to write about it. I obliged, and ever since, I worried that my article was going to be the reason Vermont reversed course. But I wasn’t the only one. YouTube personalities like Doug DeMuro talked about using the Vermont registration “loophole” and even Hagerty still has multiple articles up about Vermont that predate my own. In fact, I learned about the loophole from someone on Opposite-Lock and used the plethora of then-existing online tutorials to figure it out for myself.
Following that article, my inbox was filled with nastygrams from people saying–and this is watering it down–that I killed a secret. However, the piece didn’t actually get as many clicks as you’d think, and for more than two years after, you could still register vehicles in Vermont while living anywhere in the country. Weirdly, Vermont temporarily even extended the scope of its mail-order DMV during the pandemic. For the price of just $6, you were able to register any car in any state and you didn’t even need to prove that you owned it. You got your plates instantly onto your phone or printed out. Absurd, right?
Back in 2020, I spoke with a Vermont DMV official and they informed me that they were well aware that people in other states were using Vermont as a mail-order DMV. At the time, the general consensus appeared to be that car and motorcycle enthusiasts were basically paying the state money to never drive their cars in the state. Vermont requires inspections and Vermont can’t inspect a car that’s in, say, Wisconsin. Thus, Vermont-plated cars from other states were technically illegal to drive in Vermont unless they were inspected.
Unfortunately, the wrong crowd got attracted to the Vermont loophole and started using it to register stolen cars as well as other shady practices. Things apparently got violent, too. So, as of June 26, 2023, the loophole is officially closed.
What Was The Loophole Anyway?
I could not determine the exact moment when Vermont became a mail-order DMV, but I can tell you that it’s been going on for at least a decade. I’m sure many readers are scratching their heads about this, too. Over the years, I’ve met countless people who couldn’t wrap their heads around how Vermont’s DMV operated. Since the loophole is now closed, I’ll explain how it worked.
Here’s a situation perhaps countless car enthusiasts have encountered. You found a rusty car in a barn and have decided to save it. It doesn’t have a title and who knows when it last had one. This car is savable, but you live in a state that requires a title. Sure, you could go through your own DMV to get a bonded title or some other route to make the car legal, but this takes time and often lots of money. For example, here’s how my state of Illinois handles bonded titles:
A bond is required when standard ownership documents (i.e., assigned title) cannot be surrendered with an Application for Certificate of Title (625 ILCS 5/3-109). The Secretary of State may, as a condition of issuing a Certificate of Title, require the applicant to file a bond in the amount equal to one and one-half times the current wholesale value of the vehicle. The filing of this bond will protect the Secretary of State’s office and any prior owner or lienholder as well as any subsequent purchasers, or person acquiring security interest or respective successors, against any expense, loss or damage due to the issuance of a Certificate of Title. The bond (and the deposit filed with a cash bond) must be returned at the expiration of three (3) calendar years from the date of filing, unless the Secretary of State has been notified pending any action to recover on the bond.
For Illinois, wholesale value is determined by a written appraisal by a licensed new or used car dealer. Fellow hooptie lover Stephen Walter Gossin tells me that in his state, the previous owner has to go to the DMV with you and there are additional hurdles that make it not worth it for cheap cars. This all sounds like a major headache if you’ve just rescued a $500 car or motorcycle from the scrapper. And remember, you can’t legally drive the vehicle to get it appraised, so there’s another expense. Would I have gotten a bonded title for this clapped out Toyota Camry that I used as a rally car? Absolutely not!
This is where Vermont came in. The state does not title vehicles that are 15 years old or older. If the hooptie you’re saving is old enough, all of the proof of ownership you need is a bill of sale and a VIN verification, both of which take no effort to obtain. If you’re dealing with motorcycles, the state doesn’t title anything under 300cc. So, you could buy a brand new scooter and register it in Vermont without issue. Vermont also doesn’t title trailers under 1,500 pounds or electric motorcycles making less than 20 kW of power.
The state was also an incredible resource for people converting former commercial vehicles into motorhomes. See, many states have a list of requirements before they’ll let you register a bus or similar into an RV. Once again, we’ll look at Illinois, which says you need at least four of the following:
a) A cooking facility with an on-board fuel source;
b) A gas or electric refrigerator;
c) A toilet with exterior evacuation;
d) A heating or air conditioning system with an on-board power or fuel source separate from the vehicle engine;
e) A potable water supply system that includes at least a sink, a faucet, and a water tank with an exterior service supply connection;
f) A 110-125 volt electric power supply
Now, these requirements aren’t too hard to meet. In theory, you could just cobble something together just to pass the inspection. Problem is, there’s a whole headache before this happens. If the vehicle is a bus, you very likely need a license in the proper weight class before you could even drive it off of the seller’s property. Even if you do have a proper license, you will need insurance and you might run into problems if the vehicle isn’t registered as an RV first. Sadly, I speak from experience. My RTS bus wasn’t registered as an RV at first and my insurance company wouldn’t even touch it. My wife’s insurance company required the bus to be converted into an RV and for said conversion to have been done by a specially-licensed company.
This is where Vermont really shined. The state does not require you to prove that a vehicle is an RV. Instead, you just told the state you wanted a motorhome registration and you’d get one.
Until June 26th, when you visited the Vermont DMV website’s FAQ section, you would find that the state said that you didn’t need to live in Vermont to register a car in Vermont. But how did that work?
It was actually frighteningly simple. All you had to do was fill out Vermont form VD-119 with your actual information, include a bill of sale, include a proof of VIN check, include a check for the fees, then send that baby off to Vermont. If the vehicle has a title or was newer than 15 years old, substitute the VIN check and bill of sale for the title. After you let it cook for about two weeks, Vermont would send license plates back to wherever you lived in the United States. Two weeks after that, you got your registration card, which stated in bold print that it was your proof of ownership. If you sent in a title, you’d get back a Vermont title. Boom, your vehicle is now legal.
Why would you register a car in Vermont if you already had a title? Well, Vermont taxes are six percent of your purchase price or NADA trade-in value, whatever is higher (minimum of $500). Registration is also just $76 for cars, trucks, and motorhomes and just $48 for motorcycles. That means if you live someplace with high registration costs, you could save a ton of money by registering in Vermont. To use Illinois again, it’ll cost you a minimum of $400 to title and register a car in this state, tack on a ton more money if you live in Chicago and even more money if it’s a car that was made in the past ten years. Registering a car in Vermont is at least half of the price of registering in Illinois.
In short, Vermont has for many years been America’s DMV. If you wanted to rescue an old motorcycle from a barn, wanted to make an old hooptie road legal again, wanted to build an RV, or didn’t like your state’s taxes, Vermont openly offered a solution. Pay the state money and get back shiny plates, often without a single question asked.
You could then take the registration you got from Vermont, turn it in to your state’s DMV, and got the title you were seeking. Back in 2021, you were even able to buy paper plates for $6 for any vehicle, without any VIN check or proof of ownership whatsoever. You could have stolen someone’s car and registered it in mere minutes. The easy temporary plate program was eventually closed down, but I did give it a try before it shuttered and it was even easier than I make it sound.
Based on this, perhaps what happened next was always bound to happen.
Locking Down The Loophole
On June 26, 2023, Vermont updated its policies on issuing registrations to people living out of state, and it effectively closes the loophole. I was tipped off to the change by TheBarber on Opposite-Lock. Here’s the document in question:
To save you the time of reading the whole thing, Vermont changed its policies so that you can get a plate from the state only if you can prove some sort of legitimate connection to Vermont. Perhaps you have a home there and your car spends most of its time there. Or perhaps you have a business in Vermont.
Vermont does offer a sort of weird exception, and it’s if you live in a state that does not require you to register your car to the state. However, to use that exception, you have to physically go to your state’s DMV and have your state coordinate with Vermont, proving that you can drive a Vermont-registered car wherever you live. Only then can Vermont’s mail-order DMV still work for you.
This has generated lots of questions. What caused this to happen? Who ruined the loophole? What do you do if you own a car that’s currently registered in Vermont? Doesn’t Vermont like getting free money from people who don’t even drive there? To get the answers to these questions, I reached out to Mike Smith, Deputy Commissioner of the Vermont DMV. Smith’s office responded to my questions as follows:
An increasing number of non-Vermont residents have been requesting Vermont registrations and titles for their vehicles. The practice has increased to include a group of the same individuals making these requests a few times per week on behalf of owners who are rarely, if ever, present. The owners are residents from as far away as Florida and California.
The transactions are generally delivered by “runners” that have power of attorney for the applicants. When there are paperwork issues, these runners become very hostile and belligerent to the staff as they have traveled a long way to conduct their business. Due to these hostilities, the DMV now stations sworn law enforcement officers at several branch offices. Also, DMV is seeing the same signatures on the power of attorney forms and applications, leading us to question the authenticity of these power of attorneys.
Many applicants process their transactions, receive the necessary title or registration, and then file for a refund of the registration fees because they never actually use the plate. They are coming just for the paperwork and may never even drive the vehicle. The fees generated from our out-of-state transactions should stay in the applicants’ home states and we believe that the impacted states would agree.
Some customers have been forthright about why they come to Vermont for registration and titling. Common reasons include lower costs and shorter waiting periods in Vermont. Salvage title inspections, for example, can take upwards of 6 months to complete in some states. Some states require proof of insurance before processing a transaction. Some states require a valid driver’s license to register a vehicle. It has also been determined that some of the vehicles being registered in Vermont have been stolen and some have been found to have fraudulent ownership documents.
Other states have procedures to handle these situations, so people come to Vermont to circumvent them. Vermont is enabling this behavior by assisting these applicants in avoiding the policies and procedures of their home states.
For these reasons, Vermont has established a new policy for out-of-state residents conducting business with Vermont DMV. Such customers will now complete a form that requires them to visit their home state DMV. A member of that state’s motor vehicle department/agency must certify that the applicant is not required to register their vehicle in their home state. One form is required for each vehicle. Additionally, we have created a standardized Power of Attorney form that applicants are required to use. This form must be signed by the actual owner, be witnessed and notarized, and the form must be the original. This policy is in compliance with Act No. 60 of the 2023 legislative session creating the Uniform Power of Attorney Act, which became effective July 1, 2023.
I’ve been told that those currently with Vermont registrations may renew their plates, so this largely impacts new registrations.
The short version of the story is that along with people circumventing their states’ rules and fees regarding vehicle registration, there appears to have been some shady business going on. Some people, as I predicted long ago, were using Vermont to register stolen cars. It seems some people were also registering vehicles in Vermont to avoid having car insurance and to avoid having a driver’s license. I wasn’t even aware Vermont was sending plates out to unlicensed drivers. Overall, it sounds like a lot of people were causing the state a lot of headaches.
That aside, please don’t be hostile to DMV staff. They’re human just like you.
The concern also wasn’t just limited to Vermont. In 2022, Florida Highway Safety and Motor Vehicles issued a warning about potential title fraud utilizing Vermont registrations. Florida decided to lock down the issue by requiring the Vermont registration papers to also have a Vermont address on them.
Unfortunately, the closure of Vermont’s once legendary DMV services will mean that a lot of vehicles that could be saved will now meet the business end of a crusher. Depending on where you live, it may be difficult, expensive, or outright impossible to register certain cars and motorcycles. That classic Buick in a barn may not be worth trying to save if it doesn’t come with any paperwork.
Some states, like Illinois, won’t even register a vehicle if the previous owner is deceased. That’s a problem my wife and I encountered when we bought a $600 Dodge Dakota to make into a rally truck.
Vermont saved the day when Illinois told us to scrap the truck. Because of Vermont, that truck got to be a truck for some epic road trips rather than spend its final days rotting in a garage.
So, what can you do? We might follow this up with a 50-state explainer on registering vehicles with title problems, but for now, reach out to your state’s motor vehicle officials and ask about your options. You’ll likely be able to get a bonded title, but don’t expect that to be cheap or easy. Whatever it is, it’ll almost certainly be harder than sending a check to Vermont.
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