Whenever the title or interest of an owner in or to a registered vehicle shall pass to another otherwise than by voluntary transfer, the registration thereof shall expire and the vehicle shall not be operated upon the highways unless and until the person entitled to possession of such vehicle shall apply for and obtain the registration thereof, except that such vehicle may be operated by the person entitled to its possession or his legal representative upon the highways for a distance not exceeding seventy-five miles upon displaying upon such vehicle the registration plates issued to the former owner, or in the event title has become vested in the person holding a lien or encumbrance upon said vehicle, such person may apply to the department for and obtain special plates as may be issued under this chapter to dealers or others and may operate any said repossessed vehicle under such special plates only for purposes of transporting the same to a garage or warehouse or for purposes of demonstrating or selling the same: Provided, That the commissioner is authorized to transfer the plates and registration of a deceased person to his legal heir or legatee without payment of any fee and the legal heir or legatee may keep and use the same license plate until it regularly expires.

Upon any transfer the new owner may secure a new registration and certificate of title upon proper application and upon presentation of the last certificate of title, if available, and such instruments or documents of authority or certified copies thereof as may be sufficient or required by law to evidence or effect a transfer of title or interest in or to chattels in such case. In the event title has become vested in the person or financial institution holding a lien or encumbrance upon said vehicle, such person or institution need not obtain a new registration of said vehicle or forward the certificate of title to the department in order to sell the vehicle, but the person or institution upon transfer of title or interest to another shall execute and acknowledge an assignment and warranty of title upon the certificate of title and deliver the same not later than sixty days from the date of sale to the purchaser. The person or institution holding a lien or encumbrance upon the vehicle who acquires the vehicle as a result of the lien or encumbrance and subsequently, within sixty days, sells the vehicle in satisfaction of the debt creating the lien or encumbrance, shall not be subject to any privilege tax or personal property tax on the vehicle imposed by any other section.