On a small dealership lot northeast of downtown Baltimore, dozens of used cars await new owners. Just around the corner, a banner on the side of a building promotes “VIRGINIA TAGS” and lists a phone number.

This sign isn’t the only one making such an offer. The promotion for “Virginia tags” can be found on signs around the city and on social media posts, with some even offering delivery.

Marylanders have been flocking to Virginia for decades to register their cars there because that state allows drivers to pay an uninsured motorist fee in lieu of buying auto insurance, and because Virginia’s Department of Motor Vehicles doesn’t require that those getting registered live in that state.

Some have noticed an increase in vehicles with Virginia plates on Baltimore’s streets in recent years, as the cost of auto insurance has spiked.

The Baltimore Banner thanks its sponsors. Become one.

“Everywhere you go, someone is talking about this at this point,” City Councilman Ryan Dorsey said. “It’s happening everywhere.”

But Maryland vehicle owners may soon have less incentive to pop over to Virginia to register their car or truck. Starting July 1, Virginia will no longer allow motorists to pay the $500 uninsured motorist fee instead of having auto insurance.

View post on Instagram

Meanwhile, a Maryland state lawmaker has introduced legislation that would empower the city to tow cars not properly registered with the Maryland Motor Vehicle Administration. Although Virginia allows out-of-state residents to register vehicles there, new Maryland residents are required to register their vehicle with the state within 60 days of moving here or face steep fines and losing their license plates.

“My city is just getting in front of it,” state Sen. Cory McCray, a Baltimore Democrat, said at a recent hearing of the Judicial Proceedings Committee. “What we want to do is get these cars removed.”

But, as the bill sits idly in committee, city and state officials are stuck wondering what else they can do to curb two forces: the pull of cheaper insurance in Virginia compounded by the push of the high cost of owning a car, which is increasingly inaccessible for many Baltimore residents.

The Baltimore Banner thanks its sponsors. Become one.

Decades-old loophole

It has been an open secret for decades that Maryland residents have been getting their vehicles registered in Virginia to save money.

The Washington Post reported in 1987 that as many as 40,000 Marylanders were registering their cars in Virginia to avoid higher taxes and insurance, costing the state up to $10 million in lost revenue.

A spokesperson for the Virginia Department of Motor Vehicles confirmed that a Virginia address is not a requirement for legally registering a car or truck in the Old Dominion. It is among only a handful of states with such a policy on the books.

“There’s a loophole that incentivizes you to go to Virginia,” McCray said.

A white and red banner advertising Virginia license plates hangs on a building wall. The Baltimore skyline can be seen in the background.
A banner advertises Virginia license plates on a Baltimore street. (Daniel Zawodny / The Baltimore Banner)

When a Baltimore Banner reporter called the number on one of the signs offering Virginia tags, a man who identified himself as the owner explained that he sells used cars but refers buyers elsewhere to obtain tags and title. He declined to give his name.

The Baltimore Banner thanks its sponsors. Become one.

Many customers can only afford cheap, old cars, he said, and Virginia’s rules make it easier to get on the road. The sign later came down, not at the behest of the MVA but because the proper city fees to hang an advertisement hadn’t been paid, he said.

The Banner tried contacting others behind such offers, but none was willing to talk on the record or offer insight.

According to Bankrate, the average premium for auto insurance in Maryland is $2,496 a year, compared to $1,990 a year in Virginia.

Baltimore’s rates are even higher — the highest insurance rates in Maryland — thanks in part to a 2023 surge in car thefts. A change in driving habits since the dog days of the pandemic is also to blame, according to David Rosario, a local insurance agent who sells policies through State Farm.

“Folks got used to not having a lot of people on the road,” Rosario said. “I think it affected people’s judgment.”

The Baltimore Banner thanks its sponsors. Become one.

Transportation experts and psychologists have theorized that pandemic-related stressors and a false sense of security on less congested roads pushed motorists toward more aggressive driving habits. Crashes and roadway fatalities have been on the rise across the country.

“Some of the fender benders that I would see before are now total losses,” Rosario said.

More frequent and worse accidents, rising car thefts and increasing car values as supply-chain problems affect inventories have driven up vehicle prices, Rosario explained.

And an uninsured motorist claim, which a person would make when involved in a crash with an uninsured driver or possibly when the victim of a hit-and-run, places an undue burden on the one following the rules.

Baltimore City Councilman James Torrence believes affordability is the main reason city residents have been crossing the Virginia state line to get their license plates. He said he first noticed more drivers with Virginia tags on the road during the pandemic, when unemployment soared and credit scores went down. Torrence said race is also an important factor — he said, when he moved from a predominantly white neighborhood to a predominantly Black one, his insurance costs skyrocketed.

The Baltimore Banner thanks its sponsors. Become one.

“Both [are] middle-class neighborhoods, but as soon as I moved to a ZIP code with a large number of people who were African American, my actual insurance rate increased by $200 a month,” Torrence said.

Only about 55% of Baltimore-area households in 2023 were spending an affordable and sustainable amount of their income on housing and transportation combined, according to the Central Maryland Transportation Alliance’s recent report card. For the affordability metric, the alliance gave the Baltimore region an F.

Torrence hopes future legislation can help change that, and that insurance companies will stop considering outside factors such as marital status and homeownership when adjusting rates.

“We have to talk about where accidents are actually placed, too,” Torrence said.

If a driver who lives outside the city of Baltimore causes a crash within the city limits, Torrence doesn’t think Baltimore should be deemed less safe for insurance purposes.

Cracking down

Although the decision of many Maryland drivers to skirt state law has saved them money and perhaps allowed them to afford to have a car, it has been a long-standing financial drain for Maryland.

Some legally registered Maryland drivers and pedestrians also may feel anxious, knowing there are likely more uninsured drivers on the road due to the Virginia loophole.

Maryland and Baltimore have few mechanisms to crack down and recoup the millions in lost revenue. Meanwhile, the state’s Department of Transportation is delaying projects and roadway maintenance and cutting local commuter bus service in an effort to close a six-year shortfall of more than $3 billion.

In fiscal year 2023, the MVA collected $255 million in titling and registration fees. Such fees make up about a quarter of the transportation trust fund, the main pot that state officials use to fund road repair, transit service and other transportation projects.

A Maryland MVA spokesperson told The Banner it worked with Virginia’s DMV to identify approximately 34,000 Maryland residents they suspected of circumventing Maryland registration law.

The MVA recently sent letters to all of those car owners, including 6,100 people in Baltimore, reminding them of the requirement. It caught the attention of one local Instagram account.

A white and red banner advertising Virginia license plates is hung up on a blue building wall. A truck bed is in the foreground and a city intersection in the background.
A banner advertises Virginia license plates on a Baltimore street. (Daniel Zawodny / The Baltimore Banner)

The MVA’s Office of Investigations and Internal Affairs tracks issues such as misuse of disability parking, title and ID fraud, and complaints of improper out-of-state tags. In the last year, the office has received just 10 complaints statewide for Virginia license plates and two for tag and title businesses in Baltimore suspected of improperly registering vehicles, an agency spokesperson said.

Though penalties exist, enforcement is complicated, Dorsey said. The city’s transportation department cannot place wheel boots on a vehicle with out-of-state tags even when it has racked up red light and speeding violations. Some city officials worry this lack of accountability encourages dangerous driving, placing all road users at risk.

And the state has enough trouble enforcing the law for expired Maryland registrations.

On a recent drive, Dorsey said, he stopped behind two cars with expired registrations at two red lights — a common occurrence for him. Out of curiosity, he ran the license plates — both from Maryland — on the city’s public website to check for citations. One car’s registration expired in 2020 and had 27 outstanding red light and speeding citations. The other, whose registration had expired in 2022, had 48 violations.

“A cop driving a patrol cruiser all day every day, how frequently are they seeing this problem and not doing anything about it?” Dorsey asked.

In an email statement, a spokesman said the Baltimore City Police Department “continues to enforce expired registrations, unregistered and improper out-of-state registered vehicles in the city to ensure compliance with state laws.”

A Baltimore bus stop that includes a brown bench and a light post. A sign advertising Virginia license plates is also attached to the light post.
A sign advertises delivery service for Virginia license plates at an East Baltimore bus stop. (Daniel Zawodny)

McCray said in an interview that he’s been hearing complaints from constituents for years about out-of-state plates. His bill would authorize Baltimore to “tow, remove, or impound a vehicle owned by a new resident of the State who fails to register the vehicle with the Motor Vehicle Administration and display valid registration plates issued by the Administration within 60 days.”

A companion bill in the House of Delegates by Del. Jackie Addison, another Baltimore Democrat, has multiple co-sponsors. Similar legislation has been introduced in the last three years, according to a legislative note. Both measures remain in committee.

McCray told The Banner his bill is designed to help the MVA with enforcement. The city would still rely upon MVA investigators to determine if a vehicle owner is a Baltimore resident. A 311 call could initiate an investigation, for example, and if it were determined that the owner of a vehicle with out-of-state tags lived in Baltimore, the car could be impounded to a city-owned lot.

The bill drew questions, along with a heated exchange between McCray and state Sen. William Folden, a Frederick County Republican, during a state Senate committee hearing. Folden pushed back on the idea of impounding vehicles, saying they might belong to a college student or a worker who drives in from Virginia every day.

The bill raises other questions, such as how to treat temporary workers who are in town for only a couple of months, or active-duty military who wouldn’t see a notice in the mail requesting they verify their address.

New rules in Virginia

As the Virginia loophole closes, Maryland drivers who paid the $500 uninsured motorist fee there will see their budgets take a hit. People with vehicles registered in Virginia will be required to reregister with that state’s DMV and show proof of insurance come July, a Virginia DMV spokesperson said in an email.

But there’s still another state out there that doesn’t require auto insurance: New Hampshire.

Will Baltimore start seeing more license plates from up north?

Daniel Zawodny covers transportation for the The Baltimore Banner as a corps member with Report For America. He is a Baltimore area native and graduated with his master's degree in journalism from American University in 2021. He is bilingual in English and Spanish and previously covered immigration issues. 

More From The Banner