Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
a family member purchased a car at the end of March, we traded in an old car as part of the purchase. We did the customary paperwork, walked out with temporary title -- the real title from the State came a few weeks later.
I thought all was well. About 5-6 weeks later the family member who bought the car received a letter from the City in the large metropolitan area in which we bought the new car. The old car that was traded in was parked in a no parking zone and was towed to a storage lot. They obviously ran the VIN and it still came up with our name as owners. The towing took place one month and 11 days from purchase of new car.
The letter states the usual: towing fee and per day storage fee. We called the dealership 3 times and never were called back. I finally called the salesman 4 days after initiating contact and he seemed sympathetic at first. He told me the car (a real beater with over 280,000 miles on it) was sold at auction.
He stated that it normally takes 2-4weeks for the DMV/Dept. of Transportation to transfer the title and that it must be jammed up longer. He also stated that they would send a letter by Monday of this week to the City stating that we no longer owned the vehicle and that we would be sent a copy. It's Wednesday and no letter.
I want to call again but I'm looking to for his email as I feel I need to get things in writing now.
What would you guys think? Is this unusual? Has this happened to any of you? Are there shady things happening here? Should I be worried?
Dealers don't always transfer titles, nor are they required to. There are several lines on the back of the title for sequential owners to sign off. Dealers just sell you a car and hand you a signed off title, signed by the previous titled owner. It's not the responsibility of the dealer to police what happens to it after he sells the car legally and properly.
To guard against what happened to you, it is your responsibility as a seller to get a bill of sale from the purchaser, which is your legal evidence that you have surrendered the control of the car to so-and-so, and you get his DL number on the bill of sale.
The dealer, in all llikelihood, has documentation confirming that a new owher has bought the car, and everything will work itself out. But this is a recurring problem when people buy and sell cars privately, with no dealer documentation in between.
"Dealers don't always transfer titles, nor are they required to".
Contrary to the post above, ALL transfers of ownership (sale of motor vehicle) MUST BE recorded in the title trail. A dealer purchase (trade-in) must be recorded. A dealer cannot hold or legally process a vehicle on an "open title".
Yes, years ago, some dealers did so. Oft times in violation of the laws of the states in which they operated, but enforcement was lax and the risk of being caught with cars on "open titles" was minimal. Times have changed and the enforcement/penalties for a dealer holding an "open title" vehicle are rather severe these days, leading to significant fines and potential days of closure of business. State agents can randomly audit a dealership to verify all the vehicles held for sale are properly documented into the dealer's name/ownership. They're not just looking at the physical vehicles on the lot, but can audit the sales transactions of the dealership for a given time period. So each and every line item deposit of car sale income had better have a corresponding title trail ownership showing the vehicle in the dealer's name for them to be able to have legally sold the vehicle.
Many states have title document forms which allow dealers to sign off on an "assignment of title" so that wholesale transfers (tax exempt sales) can be recorded on the title form without having to record each sale with the DMV of the state.
Some states do not have such "assignment of title" on their titles and each transfer from seller to buyer must be recorded into a new title, even if an tax exempt wholesale transfer of ownership. To the extreme extent that Wyoming titles require that sellers notarized signatures document the named buyer upon their sale (trade-in) of the vehicle. It's a dead stop on the title trail, the title cannot go anywhere except into the name of the dealership that purchased the car. So when the dealership sells the car (either retail or wholesale), the transfer is from their titled ownership to the next buyer.
I've got Colorado titles which go both ways … older forms which have no spaces for "assignment of title" by dealers, so the sale for title trail must be filed with DMV to put the vehicle into the dealer's name. Newer titles do have "assignment of title" spaces for dealers to transfer ownership of non-taxable sales (wholesale sales such as dealer to dealer or wholesale auctions). But they're still required to show the title trail into any vehicle they have in inventory or process through their dealer license.
For the OP, I hope they have a dealer's "Bill of Sale" documenting that they sold (traded in) a particular Yr/make/model car and listed the VIN on the document. That should suffice to prove to the authorities that they no longer were responsible and liable for the tow/fines. Absent such proof of their sale, they may be on the hook for the vehicle. Depending upon the state where the transaction took place, the dealership forms may be lacking such details. The recent car deals I've done all have that information specified for the trade-in, but some states don't require it on their BofSales or sales order forms.
Personally, I've been insisting that the dealer note on the BofSale the time of day that the transaction took place. Why? because I've seen traded in vehicles involved in injury accidents on the same day they were traded in, so the timing of the release of title/ownership was critical to protecting the seller. In one case, a buyer … just a few hours after a car was traded in … was involved in a "hit and run" accident that injured a dentist and caused him the loss of his practice. So the dentist pursued his damages against the vehicle owner of record, who had sold the vehicle earlier in the day. Even though the owner of record was ultimately able to prove that he no longer owned the vehicle at the time of the accident, it still cost him a lot of money to defend himself. He'd cancelled his old insurance with a call to his insurance agent when he got the temp insurance card to show proof of insurance so he could legally drive off the lot with his new car.
Dealers don't always transfer titles, nor are they required to. There are several lines on the back of the title for sequential owners to sign off. Dealers just sell you a car and hand you a signed off title, signed by the previous titled owner. It's not the responsibility of the dealer to police what happens to it after he sells the car legally and properly.
To guard against what happened to you, it is your responsibility as a seller to get a bill of sale from the purchaser, which is your legal evidence that you have surrendered the control of the car to so-and-so, and you get his DL number on the bill of sale.
The dealer, in all llikelihood, has documentation confirming that a new owher has bought the car, and everything will work itself out. But this is a recurring problem when people buy and sell cars privately, with no dealer documentation in between.
I’ve bought used cars from dealers and there is usually a poa that gives them the right to do the transfer paperwork. That’s part of the fees normally charged. It may be different in some states, but I’ve never had a dealer hand me the title from the previous owner
To stop the recurring problem you speak of what I do is simply meet at a AAA or DMV to transfer title. People tend to be lazy about certain things so I simply don’t trust people to do it in a timely manner and I dont want to deal with such scenario as op described. Sure it may work itself out. I don’t care to deal with it.
I simply tell the person that the title transfer must be completed the day of the sale. If they don’t want to then I don’t sell it. I’ve done this stipulation theclsst three vehicles I sold and nobody had a issue with it.
You can also get the poa paperwork and have the buyer sign it, collect the sales tax, registration and/or transfer fees or all three fees and go to the dmv for them to transfer title. The caveat is knowing how much the cost of individual fees that need to be paid
"You can also get the poa paperwork and have the buyer sign it, collect the sales tax, registration and/or transfer fees or all three fees and go to the dmv for them to transfer title. The caveat is knowing how much the cost of individual fees that need to be paid"
an interesting approach to these transactions, quite different than the Western states I've done business in.
Are you suggesting that a private party "collect the sales tax"? not legal for somebody who doesn't hold a sales tax license in the states I do biz in; ie, you cannot collect sales tax for a sales transaction unless you've got a business sales tax license to do so on behalf of the state with all the reports and remittances required.
As well, I've never seen a POA used for a motor vehicle transaction except in the case of a deceased owner's release by a representative on a motor vehicle title. I've been doing business in the western states for 55 years now and never seen a dealer, wholesaler, or private party use a POA for a car transaction … with the one exception of a deceased owner's rep (and that was a recent transaction where my FIL's car was sold by my BIL in CA after Dad's passing a few months prior to the sale, first time I'd ever seen that done but a needed step in the disposal of the estate assets).
"You can also get the poa paperwork and have the buyer sign it, collect the sales tax, registration and/or transfer fees or all three fees and go to the dmv for them to transfer title. The caveat is knowing how much the cost of individual fees that need to be paid"
an interesting approach to these transactions, quite different than the Western states I've done business in.
Are you suggesting that a private party "collect the sales tax"? not legal for somebody who doesn't hold a sales tax license in the states I do biz in; ie, you cannot collect sales tax for a sales transaction unless you've got a business sales tax license to do so on behalf of the state with all the reports and remittances required.
As well, I've never seen a POA used for a motor vehicle transaction except in the case of a deceased owner's release by a representative on a motor vehicle title. I've been doing business in the western states for 55 years now and never seen a dealer, wholesaler, or private party use a POA for a car transaction … with the one exception of a deceased owner's rep (and that was a recent transaction where my FIL's car was sold by my BIL in CA after Dad's passing a few months prior to the sale, first time I'd ever seen that done but a needed step in the disposal of the estate assets).
You’re simply getting the poa to go and register the vehicle in the buyers name. The tax and fees you collect you turn over to the dmv. You don’t keep them. You’re basically acting as the buyers representative/ agent. The POA gives you the power to do so. You’re not collecting anything as a individual.
"Dealers don't always transfer titles, nor are they required to".
Contrary to the post above, ALL transfers of ownership (sale of motor vehicle) MUST BE recorded in the title trail. A dealer purchase (trade-in) must be recorded. A dealer cannot hold or legally process a vehicle on an "open title".
Yes, years ago, some dealers did so. Oft times in violation of the laws of the states in which they operated, but enforcement was lax and the risk of being caught with cars on "open titles" was minimal. Times have changed and the enforcement/penalties for a dealer holding an "open title" vehicle are rather severe these days, leading to significant fines and potential days of closure of business. State agents can randomly audit a dealership to verify all the vehicles held for sale are properly documented into the dealer's name/ownership. They're not just looking at the physical vehicles on the lot, but can audit the sales transactions of the dealership for a given time period. So each and every line item deposit of car sale income had better have a corresponding title trail ownership showing the vehicle in the dealer's name for them to be able to have legally sold the vehicle.
Many states have title document forms which allow dealers to sign off on an "assignment of title" so that wholesale transfers (tax exempt sales) can be recorded on the title form without having to record each sale with the DMV of the state.
Some states do not have such "assignment of title" on their titles and each transfer from seller to buyer must be recorded into a new title, even if an tax exempt wholesale transfer of ownership. To the extreme extent that Wyoming titles require that sellers notarized signatures document the named buyer upon their sale (trade-in) of the vehicle. It's a dead stop on the title trail, the title cannot go anywhere except into the name of the dealership that purchased the car. So when the dealership sells the car (either retail or wholesale), the transfer is from their titled ownership to the next buyer.
I've got Colorado titles which go both ways … older forms which have no spaces for "assignment of title" by dealers, so the sale for title trail must be filed with DMV to put the vehicle into the dealer's name. Newer titles do have "assignment of title" spaces for dealers to transfer ownership of non-taxable sales (wholesale sales such as dealer to dealer or wholesale auctions). But they're still required to show the title trail into any vehicle they have in inventory or process through their dealer license.
For the OP, I hope they have a dealer's "Bill of Sale" documenting that they sold (traded in) a particular Yr/make/model car and listed the VIN on the document. That should suffice to prove to the authorities that they no longer were responsible and liable for the tow/fines. Absent such proof of their sale, they may be on the hook for the vehicle. Depending upon the state where the transaction took place, the dealership forms may be lacking such details. The recent car deals I've done all have that information specified for the trade-in, but some states don't require it on their BofSales or sales order forms.
Personally, I've been insisting that the dealer note on the BofSale the time of day that the transaction took place. Why? because I've seen traded in vehicles involved in injury accidents on the same day they were traded in, so the timing of the release of title/ownership was critical to protecting the seller. In one case, a buyer … just a few hours after a car was traded in … was involved in a "hit and run" accident that injured a dentist and caused him the loss of his practice. So the dentist pursued his damages against the vehicle owner of record, who had sold the vehicle earlier in the day. Even though the owner of record was ultimately able to prove that he no longer owned the vehicle at the time of the accident, it still cost him a lot of money to defend himself. He'd cancelled his old insurance with a call to his insurance agent when he got the temp insurance card to show proof of insurance so he could legally drive off the lot with his new car.
not true if it goes dealer to dealer.... in Ohio, there are multiple spots to sign off the car from the dealer to another dealer
not true if it goes dealer to dealer.... in Ohio, there are multiple spots to sign off the car from the dealer to another dealer
as I pointed out, some states have spaces on their title forms for wholesale (tax exempt) ownership transfers to be recorded on the title without having to have each change of ownership recorded with the DMV.
But it's interesting to have several Colorado titles in my possession where both situations present:
older titles where there are no spaces for a dealer-to-dealer transaction and the title is good for one transfer from the owner/seller to a buyer …
and newer titles that have spaces for several wholesale (tax exempt) dealer to dealer sales.
And in states such as Wyoming, a title allows for ONE sale only. From the seller to the buyer, and all of those parties have to be listed on the title form when the vehicle is sold. Not only that, but the seller's signatures MUST BE NOTARIZED on the title.
The bottom line is that individual state laws regarding chain of title and transfer of ownership vary quite widely. The OP didn't mention which state their transaction took place in, or we'd be able to specify exactly the title trail process in their state. Otherwise, we're all stuck with generalizations and guidelines on how to protect oneself in a vehicle sale.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
