Watch Out For Title Problems From Closed Down Dealers

In recent news, financial troubles have plagued the automotive retailer Carvana, with reported losses of one billion dollars in the fourth quarter of 2022. The implications of such financial challenges extend beyond the company itself, raising concerns for individuals who have purchased vehicles from dealers facing distress or the risk of going out of business.

The Title Predicament

One of the primary concerns for buyers in these situations revolves around vehicle titles. If a dealer goes out of business before providing the title, buyers may find themselves in a challenging position. The title is a crucial document for establishing ownership, and without it, transferring ownership becomes a complex and often protracted process.

Preventing Title Woes: A Buyer’s Guide

Whether you’re dealing with Carvana or any dealership, it’s essential to take proactive measures to protect yourself from potential title problems. When purchasing a used car, especially from a dealership with financial uncertainties, consider the following precautions:

  1. Request a Copy of the Title Before Payment: Insist on seeing a copy of the title before completing the transaction. This step provides assurance that the dealership has the necessary documentation to facilitate the transfer of ownership.
  2. Be Wary of Floor Plan Financing: Dealerships often utilize floor plan financing, where they acquire vehicles on credit. In such cases, the title might be held by the bank or auction until the loan is repaid. Confirm that the dealership can promptly transfer the title to you upon payment.
  3. Act Swiftly if Title Issues Arise: If you’ve already purchased a vehicle and encounter title-related problems, don’t delay. Immediately notify the dealer, the Department of Motor Vehicles (DMV), and relevant titling authorities. Timely communication can help ensure your case doesn’t get lost in the shuffle.

Squeaky Wheel Gets the Title

In the event of title issues, assertiveness can be your ally. If a dealership is struggling to pay off multiple titles, being the proactive buyer who consistently follows up increases the likelihood of your case being prioritized. Remember, the proverbial squeaky wheel gets the worm, or in this case, the title.

Looking Ahead: Lean Releases

In an upcoming video, we’ll delve into another critical aspect of vehicle ownership — lien releases. We’ll explore the implications for borrowers as a major Buy Here Pay Here lender faces the challenges of going out of business.

When navigating the uncertain waters of a dealership in financial distress, vigilance is key. Protect yourself by ensuring the dealership can provide the title promptly, and take swift action if title issues arise post-purchase. Stay tuned for our next installment, where we unravel the complexities of lien releases and their impact on borrowers.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top