What Happens if an Auto Dealer Fails to Provide a Car's Registration?

What are your legal rights — and a car dealer’s obligation — concerning a used vehicle’s registration?

Learning some of the possible legal consequences of driving a car that lacks valid registration registration wasn’t what “Joe” had in mind when he purchased a 3-year-old Toyota 4Runner for his nephew, “Abe,” who drove it for a local chauffeur service.

But there was a problem, as Joe explained: “I bought in February from one of the largest Toyota dealers in our town. We were told that it was a trade-in from a customer who was unable to locate the vehicle’s registration, but not to worry, because if she didn’t bring the paperwork to them, they would apply to DMV for a replacement.”

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Joe and Abe were issued a temporary registration, which was taped on the inside of the windshield on the passenger side. The car had no license plates, “as they were personal to the customer and were transferred to the new car she’d purchased.”

Abe immediately went to work, and because his employer had a contract with the two country clubs in town, he earned a very good income, both as an hourly employee and from “healthy tips,” he said.

Temporary registrations are just that — temporary

While time limits vary from state to state, in general, buyers are able to drive a vehicle for a limited time on a dealer-issued temporary registration. The vehicle was financed by Joe’s credit union, and it required full-coverage insurance with the credit union listed on the insurance policy as the lienholder.

Despite repeated calls to the dealership to ask, “Where is the car’s registration?” Joe was assured by the used-car sales manager, “We are working on it, but our customer isn’t very cooperative, and in fact, the new car we sold her had to be repossessed due to checks bouncing and a failure to keep monthly car insurance premiums current.”

What Abe and Joe are facing

Not having valid, current registration on a vehicle is nothing to sneeze at because:

• Police can ticket the driver, as unregistered vehicles may not be driven legally on public roads.
• If on a public road, the owner faces parking violations, towing and impounding.
• Fines can range from $250 to $3,000 or more, depending on the state and any prior violations.
• Penalties can include being arrested, doing time in jail, possible impounding of the vehicle, points on your driver’s license and suspension of your driver’s license.
• If auto insurance was issued under a temporary registration, coverage could lapse, depending upon the carrier. Driving a car without insurance is its own violation of law.

'Be patient!'

In Joe and Abe’s state, 90 days is the limit of validity for a dealer-issued registration. Abe had been driving the 4Runner since February, he explained, “But I just received notices from my employer and auto insurance that unless the vehicle was registered in my name before the expiration of the temporary registration, insurance would be canceled, and I could not drive for the company. Every time I call, the used-car sales manager just says, ‘Be patient, we are working on it.’ But my family depends on that income. Can you help us?”

Sometimes it’s not who you know but who knows you

It would have been easy to just send Abe and Joe down to their local DMV investigations office to file a complaint against the dealer, who had the legal duty of providing them with valid registration. But that would take time, and Abe would be out of a job.

Instead, I set up a conference call with Joe, Abe and the dealership, asking to be connected with the general manager’s assistant. “Sheri” came on the line. I said, “My name is Dennis Beaver, and I am not representing your customers as a lawyer, but I am trying to help them,” and outlined the problem.

She immediately said, “Don’t tell me that you are the guy who writes for Kiplinger? I love your column! I will have him call you right back.”

My next call was to the manager of Joe’s credit union. “Joe, your customer, really needs your help. The car dealer appears unable to produce the registration on the 4Runner you financed, and he will likely stop making payments. Would you please call the dealership and do what you can to help Joe?”

A little — very little — patience was called for now

“So, what do we do now?” Both Abe and Joe asked.

“We wait for our phone to ring, and my prediction is it’ll be no more than five minutes. You are about to see what is meant by the power of the press. Often, it is not in revealing all the sordid details in an article that problems are solved, but the fear that such an article will be written.”

Three minutes later, the general manager called: “Mr. Beaver, please tell them to bring the car right over to us, now if possible. We will unwind the sale, refund all of the payments and insurance premiums they paid. And thanks for handling this the way you did.”

If you have issues getting the proper paperwork for a vehicle you’ve bought, here is what you can do:

• If the vehicle is financed, contact your lender to ask them to intervene.
• Reach out to your state DMV for help.
• Google DMV/Lemon Law lawyers in your area — they often can help resolve these issues.
• Contact a lawyer.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.