Curious as to why most farm tractors do not have titles? I know I was too. It felt very odd leaving the dealership with just a receipt in hand – no title or need for registration. We kind of felt like we were breaking the law.
But later found out that title exemption on farm tractors is a common practice, globally, and for the same basic reasons. Read on to find out why tractors are not titled.
Farm tractors are not titled or registered because they have a lower rate of theft and fraud, compared to motor vehicles. And they don’t use roads, bridges and tunnels regularly so there is no need for the government to tax the owner to maintain these networks.
Vehicle titles in the United States are commonly issued by the Secretary of State in the state the vehicle was purchased by the Department of Motor Vehicles. Each state in the United States has its own distinct process for the Certificate of Title. And in some states, like California, you have the option of obtaining a title for a vehicle that is title exempt, like a farm tractor.
The purpose of a title is to assist in preventing vehicle theft, fraud and the improper transfer of vehicles with a lien. Titles also help prevent fraud by documenting the mileage at the time of sale.
According to the Texas Transportation Code, Sec. 501.003, the purpose of a vehicle titles in Texas are “to lessen and prevent” the following:
- the theft of motor vehicles;
- the importation into the state of and traffic in motor vehicles that are stolen; and
- the sale of an encumbered motor vehicles without the enforced disclosure to the purchaser of a lien secured by the vehicle.
Farm tractors are exempt from titles and registration in Texas. However, there are some restriction to this exemption. Like, the distance you can drive the farm tractor on public road.
There are tractors that do require titles and registration like commercial tractors for construction purposes. And farm tractors used to mow the lawns alongside freeways. In the United States and Canada these tractors are required to have a title and registration.
Titles and registrations are instruments that allow governments to collect annual fees from owners to maintain and upgrade the local and state transportation network and help ensure roadways are safe. Since tractors do not regularly use roads, freeways, bridges and tunnels, it really makes no sense to tax the owners.
Titles include a variety of helpful information to accurately identify a vehicle. Typically, this information includes:
- vehicle identification number or commonly called VIN;
- make of the vehicle;
- model of the vehicle;
- year of manufacture;
- weight of the vehicle; and
- odometer or hourmeter reading, as at the date of purchase.
An odometer disclosure at the time of a sale is requirement of the Federal Truth in Mileage Act.
I understand, having a mandatory title for a farm tractor would save the hassle of documenting this ourselves. But just think, we are saving some taxes here.
So, if an owner of a farmer tractor doesn’t have a title, how do we prove ownership? And how do we know if there is a lien against the used farm tractor prior to purchasing it?
Keep reading, as we’ll do our best to answer these questions and more.
How to Prove Ownership if a Farm Tractor Doesn’t Come with a Title?
At the very minimum, you will need to keep a copy of your purchase invoice, receipt, or bill of sale.
It would also be very helpful to document the following items on the day you purchase your farm tractor.
- Odometer or Hourmeter Reading – write the date and the hours on the odometer down and take a photo of the odometer and save the image with a date stamp on it. For example, save the image as “Kubota MX5800 Tractor Odometer Reading – March 2, 2020.jpeg“.
- Serial Numbers – write down all serial numbers and take photos of the various parts with serial numbers on the tractor. There are usually separate serial numbers on the parts and implements. I’d also recommend taking photos of these serial numbers and save the images with a date stamp it. Like the example mentioned above.
- Photos of you on the tractor – this wouldn’t hurt and likely would be a good idea; god forbid someone should seal your tractor.
How to Ensure There isn’t a Lien on a Tractor When There is No Title?
It’s a bit tricky to find out if there is a lien against the a used farm tractor when they don’t come with titles or registrations, but it’s not difficult if you follow these easy 2 steps.
- Ask the owner if there are any outstanding liens.
- Conduct a lien search using the tractor made, model, year and serial. But be sure to complete the lien search in the state or county where the current owner is located and not where the sale is being completed.
If you find out there is a lien on the farm tractor make sure to follow these important steps.
- Get payout instructions directly from the creditor or lien-holder. You may trust the seller but to be sure it would be best to deal with the lien-holder or creditor directly. There are some pretty hard consequences should you not follow the correct instructions and payout the total owed to the lien-holder or creditor.
- Obtain a signed lien release letter from the creditor or lien-holder.
- Paper trail the sale. Get a signed copy of the bill of sale. Make sure all the appropriate information is listed on the bill of sale. for example, you’d want to ensure the following information is listed on it:
1) Model of tractor;
2) Make of tractor;
3) Year manufactured;
4) Hourmeter reading, as at the date of purchase;
5) Color of tractor; and
6) All serial numbers; including the ones on parts.
I’d also suggest taking a photo of the sellers ID and stapling that to the bill of sale.
There are a several other important details you might want to learn more about when someone has a lien on a used farm tractor. Or you may end up with the sellers debt if you aren’t careful. Read our other post on liens here.
Happy tractor hunting!