NMVTIS 101: Federal Reporting Requirements for Tow Companies

for Wreckers on Tuesday, March 15, 2011 by Jay Svendsen

On January 27, 2011, the Department of Justice (DOJ) issued a policy clarification for towing companies regarding the National Motor Vehicle Title Information System (NMVTIS). The clarification explains the federal reporting requirements, and provides specific guidance on tow company reporting.

What is NMVTIS, exactly? The National Motor Vehicle Title Information System (NMVTIS) is a U.S. Department of Justice (DOJ) database that contains automobile information from states, insurance carriers and businesses that handle junk and salvage automobiles.

NMVTIS is a national program, and the reporting requirements are separate from your state regulations. It is important to understand the requirements, because it is up to each affected business, not its state, to ensure that the proper reports are made to the national database.

So, do you have to report? In general, if you own, control, handle or acquire more than five junk or salvage vehicles a year, you must report to NMVTIS. The DOJ clarification states that tow companies, wrecker operators and tow truck services are included in the NMVTIS program regulations, and those businesses should be reporting information about the junk and salvage vehicles they handle.

What qualifies as a junk or salvage vehicle? According to the federal rule, junk vehicles are vehicles incapable of operating on public streets, roads and highways or have no value except as a source of parts or scrap. These vehicles may be bought and sold in their entirety or as spare parts, used for rebuilding, restoration, or they may be crushed.

Salvage vehicles are automobiles that have been damaged to the extent that the fair salvage value plus the cost of repair for legal operation would be more than the fair market value of the automobile immediately before the damage occurred. The definition of junk and salvage automobiles includes all automobiles declared to be a total loss by a state or an insurance carrier. Please keep in mind that the federal junk/salvage definition does not consider title brands or status– even a car with a “clean” title must be reported if it fits the federal salvage definition.

Tow companies will need to report all junk and salvage vehicles that they purchase from a private party, take possession of in lieu of towing or storage costs or sell at auction. NMVTIS reporting also applies to any vehicle you part out or crush, or any vehicle for which you obtain a salvage certificate, a certificate of destruction or similar document. If you have the right to sell or re-title, rebuild, restore or crush the vehicle, and it is a junk or salvage vehicle under the federal definition, you must report the vehicle to NMVTIS.

What vehicles do NOT have to be reported? Any vehicle that is merely transported or stored, or for which you did not have the right to determine what would happen to the vehicle does not have to be reported. Any vehicle that does not meet the definition of a junk or salvage vehicle should not be reported.

How do you report? NMVTIS reporting is done through approved data consolidators. Consolidators collect the required information from towing companies, format it and insert it into the NMVTIS database. ADD is an approved NMVTIS data consolidator, and offers both paid and no-cost NMVTIS reporting accounts. ADD accounts also include access to other products designed specifically for the towing industry, such as certified mail tools, forms tools and real-time owner/lien holder searches in seventeen states, including Florida and Texas. For current ADD account holders, simply click on the NMVTIS Vehicle Upload tab to begin reporting.

What do you report? For each junk and salvage vehicle you handle, you will be asked to provide your business contact information, the VIN, the date you obtained the right to determine the vehicle disposition, and who you obtained the vehicle from. Towing reports will include a statement of what will happen to the vehicle (if it will be used for parts or rebuilding, crushed or sold), who purchased the vehicle if it was sold, and if it will be exported out of the US.

Is it too late to begin reporting? If you haven’t ever made a NMVTIS report, it’s not too late to catch up. The Department of Justice has stated that even if you are late beginning NMVTIS reporting, when you do make your first report, you should include ALL junk and salvage vehicles that you have handled since the regulations went into effect on March 1, 2009.

Read the Policy Clarification Regarding Tow Operators/Towing Companies Reporting Requirements to the National Motor Vehicle Title Information System (NMVTIS).

More information is available at www.vehiclehistory.gov and www.add123.com, or you can email us for more information.