Towing Issues: unknow location, dmv records, bad apples

Question
Loaned my car to nephew; they got a new house; called and went to pick up car; was on flat in driveway and they was moving the rest of week; went to get it the next day and it was gone; called the police of that area and they said no one had requested it be towed or moved; neighbor said they saw a wrecker there about an hour before I got there; can find no record of it being towed and it is still shown in my name; should I be worried and how to I let the DMV know I don't know where the car is.  It's been about 2 years and police said they have no information

Answer
well this does not sound good at all.

If you are the registered owner of the vehicle as shown on the DMV records then you should of received notification letters from either the police or tow company.  
That is if you show on the records.

But I do have to say that there have been a few cases where crooks using tow trucks, either stolen or owned and have picked up vehicles on highways or in parking lots which appear to be abandoned and then sold them for parts or had them crushed for the money.

There are a few bad apples in every bunch.

Now as to what to do, after 2 years you can be fairly sure that the vehicle is NO MORE...  So you are out of luck there. But I do not know if you can file a police report on it as stolen this long after it happened. Would not hurt to ask.   Also have you had it insured all this time?

There are a bunch of issues here and I can not cover everything in the answer as there are lots of other issues such as state laws, police reports, vehicle ownership info and the like...