North Carolina State Title Processing Procedures

1. What form of title must an insurer obtain in connection with the sale of a vehicle that has been acquired through the settlement of a claim?
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Certificate of Title?
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate of Title?
4. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle for parts only?
5. What documents must an insurer provide to CarBuyerUSA in order to sell a recovered theft vehicle recovered substantially intact with no substantial damage, where title is still in the name of the insured?
6. What steps must an insurer take in North Carolina to process an ownerretained vehicle?
7. What legal duties are imposed upon a lienholder following satisfaction of the lien?

1. What form of title must an insurer obtain in connection with the sale of a vehicle that has been acquired through the settlement of a claim?
   
   The following definitions applicable to vehicle titling requirements are set forth in North Carolina General Statutes § 20-4.01(33):
   
   Flood Vehicle. – A motor vehicle that has been submerged or partially submerged in water to the extent that damage to the body, engine, transmission, or differential has occurred.
   
   Salvage Motor Vehicle. – Any motor vehicle damaged by collision or other occurrence to the extent that the cost of repairs to the vehicle and rendering the vehicle safe for use on the public streets and highways would exceed seventy-five percent (75%) of its fair retail market value, whether or not the motor vehicle has been declared a total loss by an insurer. Repairs shall include the cost of parts and labor. Fair market retail values shall be as found in the NADA Pricing Guide Book or other publications approved by the Commissioner.
   
   Junk Vehicle. – A motor vehicle which is incapable of operation or use upon the highways and has no resale value except as a source of parts or scrap, and shall not be titled or registered.
   
   North Carolina Admin. Code § 3C.0202 provides that:
   
   Flood vehicles will be branded "Water/Flood Damage Vehicle" on the title. Salvage vehicles will be branded "Salvage Vehicle" on the title. Junk vehicles are marked "Junked" on the registration records only. The title must be submitted indicating the vehicle is incapable of operation or use upon the highways and has no resale value except as a source of parts or scraps.
   
   North Carolina General Statutes § 20-71.4 provides that:
   
   (a) It shall be unlawful for any transferor of a motor vehicle to do any of the following:
   
   (1) Transfer a motor vehicle up to and including five model years old when the transferor has knowledge that the vehicle has been involved in a collision or other occurrence to the extent that the cost of repairing that vehicle, excluding the cost to replace the air bag restraint system, exceeds twenty-five percent (25%) of its fair market retail value at the time of the collision or other occurrence, without disclosing that fact in writing to the transferee prior to the transfer of the vehicle.
   (2) Transfer a motor vehicle when the transferor has knowledge that the vehicle is, or was, a flood vehicle, a reconstructed vehicle, or a salvage motor vehicle, without disclosing that fact in writing to the transferee prior to the transfer of the vehicle.
   
   (a1) For purposes of this section, the term "five model years" shall be calculated by counting the model year of the vehicle's manufacture as the first model year and the current calendar year as the final model year. Failure to disclose any of the information required under subsection (a) of this section that is within the knowledge of the transferor will also result in civil liability under G.S. 20-348. The Commissioner may prepare forms to carry out the provisions of this section.
   (b) It shall be unlawful for any person to remove the title or supporting documents to any motor vehicle from the State of North Carolina with the intent to conceal damage (or damage which has been repaired) occurring as a result of a collision or other occurrence.
   (c) It shall be unlawful for any person to remove, tamper with, alter, or conceal the "TOTAL LOSS CLAIM VEHICLE" tamperproof permanent marker that is affixed to the doorjamb of any total loss claim vehicle. It shall be unlawful for any person to reconstruct a total loss claim vehicle and not include or affix a "TOTAL LOSS CLAIM VEHICLE" tamperproof permanent marker to the doorjamb of the rebuilt vehicle. Violation of this subsection shall constitute a Class I felony, punishable by a fine of not less than five thousand dollars ($5,000) for each offense. (d) Violation of subsections (a) and (b) of this section shall constitute a Class 2 misdemeanor. back to top
   
   
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Certificate of Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer or accompanied by a power of attorney), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair. A Damage Disclosure Statement (Form MVR-181) must be provided on all vehicles.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the owner’s Certificate of Title to the purchaser. [See North Carolina General Statutes §§ 20-57, 20-73, 20-75, 20-109.1(b)] back to top
   
   
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate of Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer or accompanied by a power of attorney), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair. A Damage Disclosure Statement (Form MVR-181) must be provided on all vehicles.
   
   CarBuyerUSA will fill out the assignment located on the back portion of the Certificate of Title and submit these documents along with the appropriate fee to the Department of Motor Vehicles for processing.
   
   Thereafter, the Department of Motor Vehicles shall issue a Salvage Certificate of Title in the name of the insurer. Note: Vehicles with flood or water damage will be branded “Water/Flood Damage Vehicle”.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Salvage Certificate of Title to the purchaser. [See North Carolina General Statutes §§ 20-4.01(33), 20-57, 20-109.1(b); North Carolina Admin. Code § 3C.0202] back to top
   
   
4. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle for parts only (“junk”)?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer or accompanied by a power of attorney), an odometer disclosure statement, a release of any liens, and a cover sheet stating that this vehicle should be sold as parts only (“junk”).
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will stamp “Junked” on the Certificate of Title and send it to the Department of Motor Vehicles.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction on a Bill of Sale marked “parts only – no title”. The Bill of Sale shall be sufficient title only for purposes of transferring the motor vehicle to a salvage yard or to a demolisher for demolition, wrecking, or dismantling. No further titling of the motor vehicle shall be necessary. [See North Carolina General Statutes § 20-4.01(33)a; North Carolina Admin. Code § 3C.0202(6)] back to top


5. What documents must an insurer provide to CarBuyerUSA in order to sell a recovered theft vehicle recovered substantially intact with no substantial damage, where title is still in the name of the insured?
   
   When a vehicle has been stolen, the insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer or accompanied by a power of attorney), an odometer disclosure statement with last known mileage, and a release of any liens. A Damage Disclosure Statement (Form MVR-181) must be provided on all vehicles regardless of age.
   
   After receipt of these documents, CarBuyerUSA will submit these documents along with a request for Salvage Certificate of Title and the appropriate fee to the Department of Motor Vehicles for processing.
   
   Thereafter, the Department of Motor Vehicles shall issue a Salvage Certificate of Title in the name of the insurer. Upon receipt, CarBuyerUSA will forward this Salvage Certificate of Title to the insurer for safekeeping. If the vehicle is recovered, the Salvage Certificate of Title along with an ACV, a cost of repair, and a police report will be returned to CarBuyerUSA by the insurer in order to obtain the appropriate title depending upon the damage to the vehicle.
   
   CarBuyerUSA, acting upon a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s appropriate title to the purchaser.
   
   Note: If the public VIN plate is missing, CarBuyerUSA will have the vehicle inspected by the Department of Motor Vehicles so that a new North Carolina VIN can be issued. Once this new VIN is issued and placed on the vehicle, CarBuyerUSA will apply for an appropriate title with the new VIN. [See North Carolina General Statutes §§ 20-4.01(33), 20-57, 20-109.1; North Carolina Admin. Code § 3C.0202] back to top


6. What steps must an insurer take in North Carolina to process an owner-retained vehicle?
   
   Pursuant to North Carolina General Statutes § 20-109.1: (a) Option to Keep Title.--When a vehicle is damaged to the extent that it becomes a salvage vehicle and the owner submits a claim for the damages to an insurer, the insurer must determine whether the owner wants to keep the vehicle after payment of the claim. If the owner does not want to keep the vehicle after payment of the claim, the procedures in subsection (b) of this section apply. If the owner wants to keep the vehicle after payment of the claim, the procedures in subsection (c) of this section apply.
   
   (b) Transfer to Insurer.--If a salvage vehicle owner does not want to keep the vehicle, the owner must assign the vehicle's certificate of title to the insurer when the insurer pays the claim. The insurer must send the assigned title to the Division within 10 days after receiving it from the vehicle owner. The Division must then send the insurer a form to use to transfer title to the vehicle from the insurer to a person who buys the vehicle from the insurer. If the insurer sells the vehicle, the insurer must complete the form and give it to the buyer. If the buyer rebuilds the vehicle, the buyer may apply for a new certificate of title to the vehicle.
   
   (c) Owner Keeps Vehicle.--If a salvage vehicle owner wants to keep the vehicle, the insurer must give the owner an owner-retained salvage form. The owner must complete the form and give it to the insurer when the insurer pays the claim. The owner's signature on the owner-retained salvage form must be notarized. The insurer must send the completed form to the Division within 10 days after receiving it from the vehicle owner. The Division must then note in its vehicle registration records that the vehicle listed on the form is a salvage vehicle. back to top


7. What legal duties are imposed upon a lienholder following satisfaction of the lien?
   
   Pursuant to North Carolina General Statutes § 20-58.4: (a) Upon the satisfaction or other discharge of a security interest in a vehicle for which the certificate of title is in the possession of the secured party, the secured party shall within 10 days after demand and, in any event, within 30 days, execute a release of his security interest, in the space provided therefor on the certificate or as the Division prescribes, and mail or deliver the certificate and release to the next secured party named therein, or if none, to the owner or other person authorized to receive the certificate for the owner.
   
   (b) Upon the satisfaction or other discharge of a security interest in a vehicle for which the certificate of title is in the possession of a prior secured party, the secured party whose security interest is satisfied shall within 10 days execute a release of his security interest in such form as the Division prescribes and mail or deliver the same to the owner or other person authorized to receive the same for the owner.
   
   (c) An owner, upon securing the release of any security interest in a vehicle shown upon the certificate of title issued therefor, may exhibit the documents evidencing such release, signed by the person or persons making such release, and the certificate of title to the Division which shall, when satisfied as to the genuineness and regularity of the release, issue to the owner either a new certificate of title in proper form or an endorsement or rider attached thereto showing the release of the security interest.
   
   (d) If an owner exhibits documents evidencing the release of a security interest as provided in subsection (c) of this section but is unable to furnish the certificate of title to the Division because it is in possession of a prior secured party, the Division, when satisfied as to the genuineness and regularity of the release, shall procure the certificate of title from the person in possession thereof for the sole purpose of noting thereon the release of the subsequent security interest, following which the Division shall return the certificate of title to the person from whom it was obtained and notify the owner that the release has been noted on the certificate of title.
   
   (e) If it is impossible for the owner to secure from the secured party the release contemplated by this section, the owner may exhibit to the Division such evidence as may be available showing satisfaction or other discharge of the debt secured, together with a sworn affidavit by the owner that the debt has been satisfied, which the Division may treat as a proper release for purposes of this section when satisfied as to the genuineness, truth and sufficiency thereof. Prior to cancellation of a security interest under the provisions of this subsection, at least 15 days' notice of the pendency thereof shall be given to the secured party at his last known address by the Division by registered letter.
   
   Pursuant to North Carolina General Statutes § 20-59:
   
   It shall be unlawful and constitute a Class 3 misdemeanor for a lienor who holds a certificate of title as provided in this Article to refuse or fail to surrender such certificate of title to the person legally entitled thereto, when called upon by such person, within 10 days after his lien shall have been paid and satisfied. back to top



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