Tuesday

Motor Vehicle Title Late? Maybe You Don't Own Your New Car After All

Buying a motor vehicle can be risky for reasons you didn’t even know about.

Are you giving away your money if you don't get a title?
When a car dealer sells a new or used motor vehicle, most states require that the dealer transfer the title into the name of the buyer within a maximum number of days, often just 30 or 40 days. If the dealer fails to do that on time, then most states say that the buyer has the absolute right to cancel the sale (this is often called a Title Defect Law). But maybe not.

Many states have changed their title defect law to require that the buyer actually has to tell the seller that they are cancelling the sale. Sort of like you either say it out lout (or in writing) or it doesn't get said at all.

If the buyer patiently waits or the dealer talks them into waiting, and the dealer gets the title to them before they actually say the want to cancel the sale - then the dealer wins and the buyer is stuck - even if they got a lemon! Of course, the problem is that most people have no idea that they can cancel the sale for such a technical reason. And the car dealer sure isn't going to tell you.

Why is the law so strict about giving the buyer the vehicle title?

Having the title means you are the owner.
Nothing else counts. Period.
Because motor vehicles are “titled” property in most states, the only way a person can have a legal interest in a motor vehicle is if their name is on the vehicle title. Nothing else counts. That means you have to have the title in your name to be the owner. It also means that you can’t sell a car without having the title in your name either. 

Most states also have a law that says that a car dealer is only allowed to sell a car without having the title already in their name if they have the legal ability to transfer the title into the dealer’s name right away and they, in fact, do that and then transfer title to the buyer’s name within a limited amount of time, usually about 40 days after the sale. But each state law can be a little different on this.

Of course, dealers often buy a car and then sell it very quickly. After all, they don't make a profit until they sell it. That can lead to a dealer selling it before they even receive the title to it. That can delay you getting your title too.

If you bought a vehicle from a dealer and did not get your title in time then you probably have the right to cancel the sale if you act quickly enough and you do it right.

If you have not gotten the title at all yet, then the first thing to do is contact the dealer and ask where it is and when you will get it or, if you are tired of waiting and the time limit has run out, then you can call the dealer and tell them you are cancelling the sale and you will return the vehicle to them just as soon as they tell you they will refund your down payment and return your trade in vehicle (if you paid them anything down or had a trade in). 

Don't get stuck when the dealer closes
If the dealer is no longer in business, then you need to contact your state motor vehicle department right away and see a lawyer. Some states have a fund that will buy cars from victims of car dealers who never deliver titles to their buyers.

In fact, to find out what all of this means in your situation and in your state you really need to talk to a local Consumer Law attorney near you.

Of course, the safest thing to do is make sure you get the title. If you are paying cash, the dealer should be able to sign the title over to you right then and there. If not, you could be giving your money away.

And that is also the exact reason it is so risky to buy a car from a stranger, not a car dealer, who promises to get the title to you in a day or so. It might never come.

Be careful out there. Don't take a chance. But if something goes wrong, call us for help. Helping consumers is what we do.

Burdge Law Office
Helping consumers every day