Was I born every minute, too?

August 17, 2007 3:57 PM

Buying a used car from a dealer who bought it at an auction - and he doesn't have the title.

Heya,

I'm buying a used car from a dealer who bought it at a dealer auction. I've had the car checked out mechanically and whatnot, and I'm comfortable with that side of things. The title is "in transit" from the owner, and so the dealer doesn't have it. He says he'll complete a temporary registration in the meantime, and pass on the title when it comes.

This seems a little weird to me, but I havn't bought a car this way before. Thoughts? Preferably quick thoughts?

Thanks!

posted by metaculpa to travel & transportation (20 answers total)

You might want to include what state this is in. Laws regarding auto sales vary greatly from state to state sometimes.
posted by cellphone at 4:07 PM on August 17, 2007

If it's not in CA like it says on your profile, that is
posted by cellphone at 4:07 PM on August 17, 2007

Sorry, it's CA. Thanks!
posted by metaculpa at 4:11 PM on August 17, 2007

Pay a few dollars and check out the history at CarFax.com. In my (very limited) experience, people sign over the title as soon as they sell the car so if the car has arrived, the title should have too. I would be extremely suspicious. Also check out the dealer with the Better Business Bureau.

We had a situation where someone said he was selling his wife's car and it turned out he had bought it at auction - a slightly different situation but we deicided not to buy from someone we couldn't trust.
posted by metahawk at 4:13 PM on August 17, 2007

I had a friend buy a car like this once. Being his roommate, I got to deal with the whole mess while he was away during the summer. In short, after the 30-day temporary registration expired without seeing a title (and calling the guy 3 times a week...), I had to threaten to return the car to get the shyster to send me the damned thing.

The whole thing was a mess. It was a huge amount of stress because once the registration expires you can't drive the car anymore, can't get it permanently registered or inspected... So, I would say if you decide to go ahead with this be careful. Put the cost on a credit card if you can so you can reverse the charges if they fail to procure the title.
posted by backseatpilot at 4:19 PM on August 17, 2007

I saw his carfax report (and confirmed the VIN), and that looked fine; california sale, previous owners, etc. look fine. I'll pull up my own.

Looking at auction sites, I read that it's not uncommon for the title to be a little delayed (up to 90 days!). But I'd still like the title, so I'm not sure what to do. He offered to give me his dealer licensing information and all that, which is reassuring.
posted by metaculpa at 4:27 PM on August 17, 2007

Correct, it's not unusual for the a title to be "in transit." But it is a pain. Sometimes the original title is lost, and they had to order a replacement which can take 30-60 days in my state.

I have been at auctions where an "in transit" title does result in a lower value for the vehicle. That won't matter once the title is in-hand, of course, but it does make the vehicle less desirable at the time of the auction.

I wouldn't think it's a deal-breaker, unless you think the dealer is dishonest, or hiding something, like the title is a "salvage title."
posted by The Deej at 4:44 PM on August 17, 2007

It's not his to sell.

If that's not a deal-breaker for you, go right ahead.
posted by ikkyu2 at 4:49 PM on August 17, 2007

Used cars sold by dealers in CA are more likely to be sold without a title than with in my 20+ years experience in car business.

The vast majority of trade-ins have loans against them at the time they are traded in and the lienholder won't release the title until they've been paid in full. This usually takes 10-20 days before the title is received by the dealer who originally took the vehicle in trade and it's not unusual for a car to be sold 4, 5 or more times in wholesale transactions before it is finally retailed.

Each wholesale sale adds another few days to the total time it takes for the title to reach it's final destination at the dealer who retailed the car to the end buyer. It can easily take 4-6 weeks to make the rounds from lienholder to end seller and out of state titles can take even longer.

When a dealer buys a car from an auction or another dealer in a wholesale transaction, he/she "pays" with a draft rather than a check. A draft is basically an empty envelope that is a promise to pay the sale price by check once the envelope is returned with all the necessary title documents.

Reports of sale are filed with DMV each step of the way and the report of sale gives the dealer ownership and the right to sell the vehicle with or without physical possesssion of the actual title in California.

The whole process is heavily regulated and the DMV comes down on fraudulent dealers with a very heavy hand that usually results in lengthy prison sentences.
posted by buggzzee23 at 5:38 PM on August 17, 2007

i bought a car once with the title still in transit. same situation--it was used, bought by a dealer from an auction. it only took a week to arrive--i didn't pay for or pick up the car until it did, although i put down a deposit.

i wouldn't buy the car or take possession until you see the title, but i think it's fair to put down a deposit to hold it.
posted by thinkingwoman at 5:48 PM on August 17, 2007

As a sidenote: All new cars are sold without title. The title isn't issued by DMV until some point after the sale when DMV receives the manufacturer's statement of origin and other docs necessary to create a first title. The tile does not exist until that point.
posted by buggzzee23 at 6:00 PM on August 17, 2007

I think buggzzee23 is right on this one, as far as I can tell. In any case, we're not transacting today as we would have to go across town to do so. He did get a bit offended when I seemed suspicious, though. I was perhaps a little bit rude, so I don't blame him, but one would think a used car salesman would have a thicker skin.
posted by metaculpa at 6:00 PM on August 17, 2007

That's very informative, buggzzee23. So how should a person handle the case where the title is slow catching up and your 30 temporary tag has expired?
posted by JackFlash at 6:19 PM on August 17, 2007

DO NOT buy it without the title. Period. I cannot stress this enough. If you really want the car, put down a refundable deposit to hold the car until the dealer gets the title within say, 45 days. Buying a car sans title is a huge headache and if you run into any problems you'll be stuck with a car you don't officially own and can't legally drive or sell.

Keep getting-the-title the dealer's problem--it's his job, and his problem. Don't let him make it yours.
posted by fandango_matt at 6:51 PM on August 17, 2007

He did get a bit offended when I seemed suspicious, though.

Shady deal or not, his offense is the clearest indication that he is not a professional and probably can't be relied upon if things don't go exactly as planned. Buy at your own significant risk.
posted by mrmojoflying at 6:57 PM on August 17, 2007

JackFlash. that is usually only a problem with new cars and one should contact the DMV and the dealer to find out what is the holdup.

fandango_matt, if it were as big a risk as you make it out to be, banks and finance companies wouldn't do business with car dealers unless they got a title up front. How many used car transactions have you actually been involved with at licensed California dealerships where you demanded the title before you made the deal?
posted by buggzzee23 at 7:12 PM on August 17, 2007

posted by buggzzee23 All new cars are sold without title. The title isn't issued by DMV until some point after the sale when DMV receives the manufacturer's statement of origin and other docs necessary to create a first title. The title does not exist until that point.

fandango_matt, if it were as big a risk as you make it out to be, banks and finance companies wouldn't do business with car dealers unless they got a title up front. How many used car transactions have you actually been involved with at licensed California dealerships where you demanded the title before you made the deal?

Buggzzee23, the question is not about buying a new car. The question is about buying a used car without a title.
posted by fandango_matt at 11:32 PM on August 17, 2007

He did get a bit offended when I seemed suspicious

He's not really offended. It's a game to make you feel bad and not question him further, perhaps feeling so guilty that he is "offended" that you will purchase the car immediately.

If you do choose to buy the car before the title comes in (and are you sure this is due to an auction situation?), I'd negotiate a discount. If the dealer tells you how offended he is about this, promptly apologize for offending him! In fact, you are so sorry for your offense that you will leave immediately, and go to another dealership. Stand up and walk out the door. This is much more effective as a negotiating technique if you have revealed a pile of cash with which to pay for the car. This pile of cash can be all ones, with a bigger bill on the end. Try this, you will never have so much fun shopping for used cars.
posted by yohko at 7:12 AM on August 19, 2007

Hi all,

So I bought the car. I'm sure it's from an auction situation, as Carfax told me. And I think it's actually common for the title to come from the DMV rather than the dealer. Anyway, I know where he lives.

fandango_matt, if it were as big a risk as you make it out to be, banks and finance companies wouldn't do business with car dealers unless they got a title up front. How many used car transactions have you actually been involved with at licensed California dealerships where you demanded the title before you made the deal?

Buggzzee23, the question is not about buying a new car. The question is about buying a used car without a title.

So this is from a dealer, and I have a photocopy of his dealer license to prove it (er, to myself). I think that gives me significant recourse if something goes wrong.
posted by metaculpa at 4:18 PM on August 20, 2007

Hi all,

So I bought the car. I'm sure it's from an auction situation, as Carfax told me. And I think it's actually common for the title to come from the DMV rather than the dealer. Anyway, I know where he lives.

I didn't threaten to walk out without a title, although perhaps I could have. If this is a risk, I'm willing to take on a little risk to be done buying cars now thankyouverymuchgodthatwasannoying.

fandango_matt, if it were as big a risk as you make it out to be, banks and finance companies wouldn't do business with car dealers unless they got a title up front. How many used car transactions have you actually been involved with at licensed California dealerships where you demanded the title before you made the deal?

Buggzzee23, the question is not about buying a new car. The question is about buying a used car without a title.


Now now, children. So this is from a dealer, and I have a photocopy of his dealer license to prove it (er, to myself). I think that gives me significant recourse if something goes wrong.
posted by metaculpa at 4:21 PM on August 20, 2007