Mike Henckel, Editor - Transportation Safety
July 16, 2021
Obtaining a title is often one of the first things you must do when taking ownership of a vehicle. The Federal Motor Carrier Safety Regulations (FMCSRs) require all commercial motor vehicles to operate in accordance with the laws and regulations of the jurisdiction in which they operate, which includes titling. However, titling is not regulated by federal law. It is a function of each state, and the requirements can vary greatly depending on which state you’re working with to title a vehicle.
The following tips will help you properly manage the titles for your company’s fleet of vehicles.
A vehicle title is a legal form that includes specific information about the vehicle, but most importantly, the title is your proof of ownership. Even though you’ve paid for the vehicle, without the title in your company’s name, you don’t officially own the vehicle.
Other important items included on the title will be the vehicle identification number (VIN), technical information, such as gross weight, and whether the vehicle has a lien. If a lien exists, the lien holder’s information is included so that any debt on the vehicle is paid when the vehicle is sold.
When purchasing brand new vehicles from a dealer, often the dealer will have titling paperwork ready for you at the time of purchase. The same is true when purchasing a used vehicle from a dealer, but buying a used vehicle from a private seller may require more diligence on your part.
As a best practice, you should ask to see the title before agreeing to the purchase. The title should reflect whether there is an outstanding lien on the vehicle or whether the vehicle has been in an accident and declared a total loss. If declared a total loss, you may have more difficulty insuring the vehicle.
Depending on your company’s operations, you may or may not need to pay sales tax when purchasing a vehicle. Many states have a sales tax exemption for interstate carriers or for carriers who are for-hire.
If you find yourself needing to move a vehicle from one state to another, you might be subject to a sales tax when you re-title in the new state. Some states may accept that sales tax was paid to another state through a reciprocity agreement, but you may want to consult with a tax professional because the requirements vary from state to state.
Whether you keep paper titles or store them electronically, keeping your titles up to date may be just as important as having them in the first place. Various changes can occur to titles on your vehicles, including lien holders changing or being released after a loan has been paid off.
Having accurate information on your titles and maintaining access to them will ensure smooth transactions whenever changes need to be made regarding ownership of your vehicles.
Let J. J. Keller assist in managing your vehicle titles or call 888.473.4638 for more information.
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