Team VADA eViews
The Digital Newsletter of Your Virginia Automobile Dealers Association
August 2008
It has come to DMV's attention that out-of-state repossessed vehicle titles may have previously been processed inaccurately. This letter serves as notice of an upcoming DMV policy change that affects the titling of out-of-state repossessed vehicles. As a result of this policy change, effective August 15, 2008, all out-of-state repossessed vehicles must be titled in the name of the lienholder before the lienholder may transfer title to a subsequent purchaser.
The sale of repossessed out-of-state vehicles is governed by Virginia Code § 46.2-633. This section specifically relates to vehicles acquired through the "operation of law" such as bankruptcy, repossession, legatees, or surviving joint owners. Under current titling law, a person acquiring a vehicle title must acquire title in their name before they can transfer title to another party. Similarly, in accordance with Section 46.2-633 and DMV's revised policy, a lienholder must obtain a repossessed vehicle title in the lienholder’s name before they can dispose of that vehicle at auction, regardless of whether they have a Virginia title or an out-of-state title.
Not only does this updated policy comply with the law, it also supports the integrity of the titling process and promotes consistency in DMV's handling of repossessed vehicles. The updated policy supports the integrity of vehicle titling records by including the lienholder in the title ownership chain as an owner. Accordingly, beginning August 15, 2008, regardless of whether the vehicle was titled in Virginia or another state, the lienholder must first apply for a Virginia repossessed vehicle title before selling the vehicle.
The August 15th effective date is to accommodate those vehicles that were purchased under the "old" procedure and not yet titled.