Can a dealer sell you a car without a title? – Jalopnik

A car title may feel like an afterthought when purchasing a vehicle, but this document is essential for financing and registration. Buying a car without a license plate from a dealer is possible – and in many states it is even legal. Yet it is far from a risk-free transaction.

At many dealerships, used cars from auctions may arrive without titles. Some dealers choose to hold the vehicles until the paperwork arrives, while others are willing to take the risk of putting them up for sale sooner. This latter approach can delay registrations and frustrate customers if titles do not appear on time. Carvana’s highly publicized struggles with delayed titles and registrations show that even large, tech-savvy retailers are not immune.

A missing or delayed title can develop into bigger problems. Without it, you will not be able to register the vehicle, and if financing is involved, the lender will usually have the title as collateral. Without a title, lenders can prepay the loan or reclassify it as a personal loan with less favorable terms, such as a higher rate or a shorter repayment period. The dealer can issue temporary license plates, but this is a short-term solution. Some states prohibit paper tags from being issued more than once on the same vehicle.

In many states it is legal for a licensed dealer to sell a vehicle before the title paper arrives. It’s not necessarily the best business practice, but it happens. This can happen when the dealer receives the car before a previous lien holder’s title has been cleared or the seller has not filed the title. In the case of a wholesale auction, the time frame for title availability is usually announced in advance. However, all it takes is a hiccup with the bank or auction company to cause a delay. A dealer could sell a car in good faith, expecting the title to arrive shortly, only to find that the paperwork was taking longer than planned.

Nevertheless, most states dictate how long dealers must obtain title and registration for the new owner. For example, dealers in Florida have 30 days, and the same is true in Georgia. California gives dealers 30 days for used cars and 20 days for new vehicles. Texas is less specific and the regulations state that the seller must apply for title within “a reasonable time.”

Delays of more than a week or two in receiving a title are red flags. There may be an unpaid lien, complications with a trade-in, problems with the auction house, or the vehicle may have a title mark (such as a rebuilt title versus a salvage title).

The best first step before buying a car is to check the vehicle identification number (VIN). You will want to confirm if there is an active lien on the vehicle and verify that it has a clean title. Most state DMVs offer a title search service, but the information may not be immediately available. Online companies (such as CarFax, AutoCheck and GoodCar) provide more immediate information. You then want to confirm that the dealer has the title. Ask to inspect it. If the document contains the name of the previous owner, the dealer has not completed the necessary paperwork to title and register the car to a new owner. That’s another red flag.

Keep in mind that more and more states are using digital titles, especially after the title paper shortages of a few years ago. This technology speeds up the titling process, but means that touching a physical title may not be possible. You may have to settle for an image. If the seller says the title is pending or something like that, proceed with caution. Request proof that the transfer of ownership has been initiated from the DMV or the previous lien holder. You also want the deal to specify in writing when the title will be delivered. Do not pay in full for the car until you are sure there will be no problems getting the vehicle registered in your name.

If you’re already having trouble waiting for a car title, contact the DMV, attorney general, or your state’s consumer protection agency. Florida, for example, makes the process simple. Buyers in that state can file a complaint statement if they do not receive title and registration within the 30-day period.