No, it is a legal car.
However, some value the car less since it isn't original in every way with
the original VIN plate missing.
If you do the judging route, NCRS accepts state issued VINs. I don't know
if Bloomington Gold does or not.
If you are not judging it, then it doesn't matter.
I would check the state issued VIN against the frame VIN and the engine if
it is an original engine. There is no reason to remove the VIN plate unless
they were dipping the birdcage and I seriously doubt anyone going to that
trouble and expense would not get a reproduction VIN plate made.
CHP is legally allowed to affix VINs for this reason and also for
salvage and special construction vehicles that pass standards for
registration. It may not be as "original" if that is what you are
worried about in regards to value, but it shouldn't worry you legally
but it seems you are more likely wondering about resale value.
Is it the CHP Blue tag VIN that they add when the original is not
available? It sounds like they actually used the original VIN because
they had the original from the existing paperwork so at least that will
be in your favor.
I know my friend just went through some CHP issues regarding a classic
HD M/C and they only originally used engine number as the VIN. When he
brought it into Ca. the CHP told him to either they would attach the
blue VIN tag or he would have to stamp the number into the frame. He
chose to stamp the number into the frame to try to retain as much
orignality as he could.
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