As a lender, you hope each borrower properly registers their vehicle and perfects your lien. The risk of owners failing to register cars and trucks and leaving your interest unsecured incentivizes you more than ever to help them complete their responsibilities after their purchase. Nowhere is this more important than for customers in control of commercial motor vehicle fleets — where registration is more complicated, and the cost of unperfected liens can be significant.
Registering each vehicle in a fleet is more involved than the average person registering their car. Commercial owners have to consider the impact of working across multiple jurisdictions and each state or provinces' various registration requirements, fees, and taxes.
To increase the likelihood of motor carriers perfecting your liens, you can help them navigate the registration process. But this requires you to understand the complexities of interstate and international transportation, the International Registration Plan (IRP), and apportioned vehicles.
The International Registration Plan
The IRP is a reciprocity agreement among 48 continental U.S. states, the District of Columbia, and 10 Canadian provinces. It enables fleets to register automobiles in one home location and pay apportioned licensing fees based on how much they operate in each jurisdiction.
Your customers aren't required to register with the IRP, but it's beneficial to do so if they regularly operate in two or more states or provinces. Motor carriers can register qualified vehicles in one place — where they file as doing business — instead of each in jurisdiction where they operate.
Otherwise, owners must obtain trip permits each time a vehicle ventures into a state or province outside the fleet's home base — or risk incurring potentially significant fines for operating somewhere they haven't registered and paid taxes.
Apportioned registration is the official registration motor carriers complete in their home state or states. Once completed, vehicles may move throughout several jurisdictions without multiple registrations or trip permits.
Although fleets register cars or trucks in one jurisdiction, an apportioned registration means they pay fees in each state and/or province where they operate. Most importantly, though, their payments are proportional to the number of miles a vehicle logs in each place.
What does apportioned mean?
To apportion means to create a proportionate distribution. Something proportional is directly related to a particular measurement; in this case, costs are calculated based on the number of miles the fleet's vehicles operate in each state or province.
Fleets multiply the percentage they travel in one place by that jurisdiction's fee. For example, if a motor carrier does 25 percent of its business in Texas, then the company multiplies Texas' price by .25 to determine how much it owes. The final calculation, however, is more complicated since it takes factors such as registration date, taxes, and fees into consideration.
What is an apportioned plate?
Apportioned registration is a commercial vehicle's formal registration in its home location. States then issue apportioned license plates to affix to each vehicle. These plates are specifically labeled "Apportioned," "APP," or "PRP."
States also issue Cab Cards, which remain with commercial cars and trucks and say which jurisdictions they can lawfully go to without additional trip permits or incurring fines.
Let us navigate IRP registration for you
It's simply good business to help your borrowers properly register commercial vehicles that travel through several states or provinces; it's an essential step when it comes to securing your interests. But apportioned registration isn't a simple process; each state has unique fee schedules, costs, and taxes, as well as procedures regarding altering registered gross vehicle weights and fleet management. Keeping up with 59 jurisdictions' rules and procedures is a monumental task outside of your core competencies.
The best way to tackle this endeavor successfully is to find the right partner. Lien Solutions has extensive knowledge regarding registration requirements and accurate tax and fee estimates across jurisdictions. We've become experts in vehicle titling and registration so you don't have to.
We're here to help your titling process go smoothly, no matter where your customer’s fleet operates. Speak with one of our experts today by calling (800) 833-5778, x3.