Client: Steven, I just got a letter from an attorney because we messed something up.
Steven: Uh oh. What happened?
Client: We bought a car at auction, put it on our website, and sold it before we got the title from the auction. Now we are past the deadline to transfer title and the customer is furious. What do we do?
We see these cases all the time. Enough that we made a video dedicated only to this issue. Please watch this very important video to learn how to prevent this situation in the future and what issues it causes.
Below is a transcript of the video:
Let’s talk about titles, specifically how they work through the auction. The vehicle will normally be delivered from the auction first before the dealer actually receives the title. In some cases, the dealer doesn’t receive the title from the auction. Here’s where it’s important. The dealer needs to make sure the dealer has the title from the auction before putting the car for sale on the lot.
I cannot tell you how many times I’ve seen a dealer get a car from an auction, refurbish it, clean it up, make sure all of the parts are in there, the car’s working properly, the oil change is done, tune-up, maintenance, etc. The dealer puts the car For Sale three days later, has an offer and a customer buys it, while the dealer still has not received the title from the auction, and then it doesn’t, because the title is sent from the selling dealer which doesn’t always go through.
Sometimes the car gets through before the title does. It is a mess, an absolute total, utter, 100% extreme, humongous mess when a dealer sells a vehicle without a title. It’s also a violation of Georgia law. The lesson here is to make sure that the dealer has the title from the auction before listing the vehicle For Sale. If the dealer doesn’t get the title from the auction or a certain time has passed, it may be that the dealer has to initiate a repurchase from the auction or go through the title arbitration policy offered by the auction to either get the car, or send the car back, or get the title.
Every auction has a different policy, but most are governed by the Auction Arbitration Association. This becomes a huge issue if the dealer has already sold the vehicle, because more times than not, the customer then comes back to the dealer with the simple question, “where’s my title?”
The customer is a bona fide purchaser for value, meaning the customer is an innocent purchaser that’s not a participant in the dealer’s transaction at the auction. The customer cannot then be held hostage by the dealer selling the car without a title. It’s a dealer problem. So all dealers should make sure they have the titles from the auction before they put a car on their lot for sale.
For more videos on the Georgia Car Law Authority series, please visit www.georgiacarlaw.com.
For more information and to book a strategy session, click here!
P.S. Have you heard about The Driveway, our monthly legal membership program? Check it out here!
