Most used car sales transactions go by in a straightforward manner. You arrange financing, sign a bill of sale, pay for the car and receive the title. But in some cases, problems may arise regarding that last step. Issues regarding the car title can cause serious complications when it comes to registering the car and completing the sale legally.
Used Car Sales
A used car dealership is commonly a fast-paced operation. As is the case with any company that sells tangible goods, one of the dealership's main goals is to sell off inventory as soon as possible before it ages. Used car dealers commonly get their cars from private sellers, trade-ins, auctions and rental car agencies in some cases. These dealers sometimes take shortcuts to speed along the process of securing and selling their cars that could cause complications for the buyer.
Possession of Title
A used dealer isn't supposed to sell a car without having the title in possession. In some states, it's unlawful. Until the dealer has the title, issued in the dealership's name, the company doesn't officially own the vehicle. Someone who doesn't have legal ownership over a piece of property doesn't yet have authorization to enter into an agreement for its sale, in this case, the car's bill of sale.
The Reality
Though a used car dealer isn't technically supposed to sell a car without the title, it does happen. In some cases, a dealer simply takes possession of the car and displays it on the selling lot even though they're still waiting for the title to receive the title in the dealership's name. After buying the car, whether it is from an auction or a rental car agency, the state department of motor vehicles must register the title to the dealer and send an updated title for the car. This could take weeks. Also, in some cases, the title gets lost in transit on its way to the dealership.
Resolution
If you find yourself in a situation where the dealership doesn't have the title, the first step is to stay in touch with your salesperson. It is the dealership's responsibility to resolve this matter by contacting the department of motor vehicle and seller. If the temporary tags expire on the car you technically cannot drive -- the dealer can extend the temporary registration. In some states, the department of motor vehicles may accept what a certificate of origin, in lieu of the title to allow you to register the vehicle as the title paperwork is processed. If your efforts to get the title from the dealership and register the car are unsuccessful after many attempts, file a complaint with your state's department of motor vehicles and possibly seek a refund. You may also be able to sue the dealership for your inconveniences related to the transaction, especially if you've made payments on a car loan, but cannot drive the vehicle. Consult with a lawyer regarding your recovery options in an extreme case.
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