One of the most crucial vehicle systems that any licensed dealership should be familiar with is the National Motor Vehicle Title Information System (NMVTIS). The NMVTIS helps dealers and consumers gather valuable information about vehicle condition and history, including its title, recent odometer reading, brand history, and even historical theft. 

 In short, it is a tool that helps to protect consumers and dealers from fraud and unsafe vehicles¹. It also helps keep stolen vehicles from being resold. The NMVTIS does this by providing a central repository of vehicle title and history information. This information can be used by consumers, dealers, law enforcement, and state agencies to verify the title of a vehicle and to identify stolen vehicles.

Why Is the NMVTIS So Important?

Under federal law, all road vehicles must be registered in the state where they are operated. Before issuing a new title, states must perform a Federal NMVTIS title verification check for any vehicle brought into their state. This helps ensure that the vehicle is not stolen or has a fraudulent title.

Some of the key details the system includes are:

• A vehicle's title: NMVTIS provides current and previous titles issued for a specific vehicle. This may include date of issue, jurisdiction where the title was issued, and other crucial information.
• Junk or Salvage Status: The system also reveals a vehicle’s status, like salvage, rebuilt, flood, and junk titles. 
• Theft records: The database may contain information on vehicles reported as stolen. The system is designed to prevent stolen vehicles from being resold, protecting both the dealership and consumers from fraud and unsafe vehicles. 
• Odometer reading: The database contains records of odometer readings reported during title transfers or other vehicle events. This helps to detect potential odometer rollback fraud. 
• Lien-Holder Status: The NMVTIS has information on the current lienholder, the date the lien was created and the amount of the lien. Note that the NMVTIS does not provide information about the lien holder's contact information.

Is the NMVTIS Mandatory?

Federal law requires all states, insurance carriers, and junk and salvage yards to report certain vehicle information to NMVTIS and make it available to prospective buyers, state agencies, and law enforcement.²

What If the NMVTIS Flags a Car on My Lot?

Having one of your cars in your dealership lot flagged by the NMVTIS can be frustrating. For example, if a vehicle is reported stolen, law enforcement officers enter the information into the NMVTIS database. This will raise a flag against the vehicle's identification number (VIN). 

If someone tries to register or sell that vehicle, the system alerts the relevant authorities, preventing the transaction and potentially leading to the recovery of the stolen vehicle. 

Sometimes a vehicle is flagged because of duplicate VINs, or other issues. If a vehicle on your lot is flagged, here is the best way to proceed⁴: 

• Suspend the sale of the vehicle: Until you resolve the flagged status or clarify the situation, you should stop selling the vehicle. Selling a flagged vehicle without proper disclosure could lead to legal and reputational consequences for your dealership.
• Verify the information: Cross-check the accuracy of the information provided by the NMVTIS. Ensure the VIN matches the one on the car and review the specific reasons for the flag. It could be due to a salvage title, flood damage, odometer rollback, theft recovery, or other issues.
• Seek clarification: Contact the NMVTIS or the appropriate agency responsible for the flagged entry to seek clarification on the reason behind the fagging.
• Address the problem: If the flagged entry is due to a mistake or an error that can be corrected, work with relevant authorities to correct the information. 
• Informed potential buyers: Sometimes, a vehicle is flagged when you have already advertised it and even received offers from interested buyers. If this is the case, take steps to inform the potential buyers about the flagged status and any relevant details regarding the vehicle's history.
• Resolve the issue: Depending on the reasons for the flagging, the dealership should work collaboratively with the customer and relevant authorities to find a satisfactory resolution. 

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Sources

1. Texas Dealer Education. 'National Motor Vehicle Title Information System (NMVTIS).' Texas Dealer Education, www.texasdealereducation.com/nmvtis/.
2. AAMVA. 'National Motor Vehicle Title Information System (NMVTIS).' AAMVA, www.aamva.org/technology/systems/vehicle-systems/nmvtis
3. Bureau of Justice Assistance. "Vehicle History Database." https://vehiclehistory.bja.ojp.gov/2021-annual-report. Accessed 28 July 2023
4. American Association of Motor Vehicle Administrators, 'Resolving Vehicles with the Same VIN and Cloned Vehicles, from NMVTIS Best Practices for Title and Registration Program Managers', Nov 2014, https://www.aamva.org/getmedia/824a421a-ed40-4697-aaa9-d0fb11ee47dc/NMVTIS-Best-Practices-for-Title-and-Registration-Program-Managers-Ed-4.pdf