Market Trends

Drivers are the Weak Link in License Plate Disposition

August 15, 2012

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Although fleet management requires a strategic perspective, in reality it is a detail-oriented profession. The job requires paying attention to a multitude of details crucial to ensuring a well-run fleet. But, as the saying goes, the devil is in the details. A case in point is license plate disposition. When a fleet vehicle is remarketed and there is a transfer of ownership or if it is transferred to another state, the disposition of the vehicle’s license plates is a complicated process, because it will vary by state. Although some states allow the transfer of plates from one vehicle to another, other states require that license plates be surrendered to the state DMV where the vehicle is registered. Jurisdictions that are the most problematic are Connecticut, Florida, Kentucky, Massachusetts, Maryland, Missouri, North Carolina, New Jersey, New York, Nevada, Pennsylvania, Rhode Island, Virginia, Vermont, and the District of Columbia.

Typically, license plate disposition responsibility falls upon the company driver, although vehicle relocation companies, wholesale auctions, and specialized license & title vendors also provide this service. Among commercial fleets, approximately 50 percent of all license plates are returned by drivers. “If a new plate is being issued, it is the driver’s responsibility to remove the plate from the vehicle. Also, if a vehicle is transferred to another state, it is the driver’s responsibility to return the old plates and put the new plates on the vehicle,” said Gary Wallace, manager of truck licensing & regulatory compliance for ARI.

Returning License Plates in a Timely Manner
It is estimated that industry-wide between 30 and 50 percent of license plates are not returned in a timely manner. When drivers remove plates from vehicles, they physically mail them to their fleet management company (FMC) or the state DMV. Typically, an FMC provides the driver with a pre-addressed envelope to assist in the return of the plates. However, not all drivers return license plates in a timely manner. Some don’t return them at all, with auctions and vehicle transporters backstopping these omissions. When a plate is not returned or returned late, taxes continue to be issued. “These fees include excise taxes from the local jurisdiction, property tax, miscellaneous town taxes, registration fees, and ad valorem taxes, which cumulatively can range from $100 to several hundred dollars,” said Wallace. “The main reason plates are not returned is because of driver forgetfulness and not realizing the importance of returning the plates.”

Upon receipt of the returned license plate, the FMC will immediately record it with the state DMV to stop any subsequent violations and taxes. Every license plate received by an FMC is documented in its fleet management system. States may offer refunds for the unused portion of the registration, which makes it crucial that the proper documentation is captured and sent to a state DMV. A state DMV can also hold up licensing new vehicles if there is a tax hold. It is difficult to remove a vehicle from a jurisdiction’s tax rolls, if there is no license plate disposition record.

Initiative to Record License Plate Disposition
Addressing this problem, the International Automotive Remarketers Alliance (IARA) recently launched an industry initiative to track the disposition of license plates. “This initiative involves six states (Kentucky, North Carolina, Connecticut, Massachusetts, Virginia, and Rhode Island), plus Washington D.C.,” said Levi McCoy, director of remarketing for LeasePlan USA, who is spearheading the IARA initiative.

According to McCoy, the proposed process modifications would provide consignors with the ability to report from AutoIMS (an online inventory management system for the remarketing industry) all license plate dispositions from these six states. On an ad hoc basis, consignors would be able to view plate disposition information on their vehicles, identify the actual date of plate disposition, and generate reports to state DMVs. “When we receive tax bills from these states, we would now have immediate access to license plate disposition data,” said McCoy.

The IARA initiative seeks to have condition report writers at auctions notate one of five plate disposition statuses when completing a condition report on vehicles licensed in these states. They are: 1) Destroyed, 2) Returned to state, 3) Returned to lessor, 4) Remain on vehicles, and 5) No plates when vehicle secured. The IARA proposal is currently being reviewed by the auction industry.

In the final analysis, the first line of defense to ensure the timely and proper disposition of license plates is the driver. However, the driver is also the weakest link in the process. If the license disposition process is not outsourced, it is imperative fleet managers redouble their efforts in educating drivers on the importance of returning license plates in an expeditious manner.

Let me know what you think.

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  1. 1. K.D. (Dave) Durepo [ September 28, 2012 @ 08:29AM ]

    Hi Mike, Your article on license plate returns hit a nerve with me! We do a multitude of courtesy deliveries. No one ever asks us about the old plates. In fact in Georgia getting a new plate is cheaper to get for the fleet than transferring the old one in some cases. Depending on the registration it may help the company avoid property tax for a year on the new unit. Changes in the company name is another big reason for ordering a new plate.
    These old plates are live, and not taken out of the system unless someone turns them in. These are a license to steal. They also have value to anyone how can not buy a plate. We turn many of them in. We always tell the fleet driver to go by the DMV and turn there old plate in, and get a receipt for their records. I wonder how many do? What a liability for the fleet company and their clients. Thought you would like to know.


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Author Bio

Mike Antich

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Editor and Associate Publisher

Mike Antich has covered fleet management and remarketing for more than 20 years and was inducted in the Fleet Hall of Fame in 2010.


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