california dmv law

Unfortunately there are too many car dealers ready to fraud and illegal activities. Not all dealers are bad, but the actions of a few have a stain on the industry, resulting in the perception of the American public that every car dealer is a scammer, or out-right criminal. I know that this is not the case, but I also know that there are many bad car dealers praying on consumers, as the Auto Insider I want to help protect you from a car dealer dominant SCAM, title fraud. It has been around for years and I recently published a story about a trader commit this fraud in the San Diego Union-Tribute. The history of sanctions detailed a now disused Mitsubishi dealer in Escondido California, the guilty for the crime of title fraud. The news article describes how the two dealer principles have been found guilty of misdemeanors counts of failure to comply with the ownership of vehicles. Only one owner revealed to the court day, and he was 1 day in prison, 3 years probation and to pay $ 40,000 in restitution. The second owner, not shown, has issued a bench warrant for his arrest. The Mitsubishi dealer had 32 complaints against them and the guilty verdict followed a 10-month investigation .

A trader commits title fraud for two main reasons, desperation or greed. Today there are a surprising number of car dealers who have difficulty paying their bills and their employees forcing them to desperate decisions of titles such as fraud. If a dealer is desperate title fraud is attractive because it is easy to do and offers immediate and substantial amounts of money, so it naturally attracts the extremely greedy car dealers. A car dealer may commit entitled to two types of fraud, if you have a car in the trade and buying a car from them.

I would like a typical car deal to show how a car dealer commits title fraud with your trade-in. Suppose that I do with the crooks from Escondido, and I just traded in a 2004 Volkswagen Passat. I had the car 3 + years and I have 10 months of payments left at $ 375 per month. As part of the agreement, they give me $ 14,000 for the car. Now I still owe $ 3750 on the Passat, so that the dealer is $ 10,250 for the purchase of a new car, and they will have the remaining $ 3750 I owe to the bank for the Passat, a very typical car transaction. In most states by law the dealer has between 3 to 5 business days to be given by the payment of my old Passat Bank.

This is the standard automotive dealers, but some dealers a fraudster, so that your trade-in title and use that money for themselves. You can wait a month, two months or maybe never plan to pay the $ 3750 on the trade of the bank. A dealer, so that they can not use that money without permission, interest free. And while they commit title fraud to their customers credit will be damaged. Who do you think is responsible for over $ 3750 still on the Passat in our example, you guessed it .... ME! A car dealer will pull this fraud is a major task for the lender and customer to choose from to pay off the trade-in for as long as possible.

The other way a car dealer may be hurt by the title of fraud on the car, it would sell. With the San Diego crooks again for my example, let's say, I went and bought in 2007 a new Mitsubishi Eclipse Coupe SE from them for $ 23,500. I have $ 3,500 and I am financing the remaining $ 20,000 plus interest, taxes and tags, over six years. Another simple, especially in the auto business, and I stroke them the $ 3,500 check, sign all the paperwork and drive in my hot little sports cars, everything is great, is not it? Sorry, remember I made the mistake to buy my Mitsubishi in Escondido, so instead of completing the transaction (with the California DMV and the bank, I have my loans) in 3-5 business days, you guessed it, they decide pull a scam and is not correct, a title, and not all related formalities.

If a dealer has promptly paid them my new Mitsubishi Floor of its businesses. You see, almost every dealer uses ground on their lot with warehouse inventory (I only know of two who are not). Ground is a program that allows a dealer to have cars on their lot that they have not yet purchased. The dealer uses a lender, the "loan" to the dealer to stock a large number of cars on their lot without enormous amounts of money. The lender receives interest payments from the vendors for the inventory and will be made-if a car is sold. For most merchants, they could not or do not want to keep 150 cars on their lots without a ground (150 cars, if that average cost of $ 20,000 each dealer must retain $ 3,000,000 in their stock). So when I bought my Eclipse I have a $ 20,000 loan from a bank. The Mitsubishi Bank pays the dealer $ 20,000 in my name for the car. Then the car dealer is responsible for the payment of ground bank their money. This is usually done within 2 or 3 days.

Every day car dealers ethical disbursement of its ground lender for the cars they sell, but remember I was unhappy enough to do with the San Diego fraudsters and they decided to delay paying their ground lenders, so they could use the $ 20,000 from my loans for their own purposes. Now you can not ensure that a bank will be cheated, but you are in danger. If a dealer is playing with the title of a car they sold they have to "fudge" a few formalities to ensure they are not caught in the fraud (a dealer caught this could be the ability to have lost ground and will be out of business). Normally they will delay the registration of the car (a car dealer does not register until they are sold). So in this example, we can assume that it is not my car so they can be $ 20,000 she received from my car loan and now that dealer has me in a very dangerous situation.

Imagine if I am involved in an accident, without my own, but my car is damaged, and I'm injured badly enough to need medical help. The accident is not my fault, but if the insurance for the person who made me determined that my Eclipse is not registered, that they have the right to deny my claim, because a car does not have the right to cross the street . So that the fault of the driver's insurance refuses to pay for my medical needs or the damage to my car, all the things that they would have paid for my car had been insured. To the matter worse, my insurance does not pay me anything because they are voiding my coverage for driving and not the car! Now my medical care, together with the repair costs of the eclipse from my bag, which easily total $ 75,000 to $ 150,000 or more!

So, not a dealer with your title correctly can be a big problem, but it is a simple, to prevent fraud. If you trade in a car to a dealer and the dealer is paying for your trade-in's lender and let them know that they will soon with a payoff of (name of the dealer). Nor is it a bad idea to write that lenders a letter to the state, if you traded in their car, what the trade in value was, and if you are the dealer that the possession of the car lender. The Bank will appreciate this information, they could contact the dealer for them to share their knowledge about your situation and would be very discouraging a dealer from this obligation fraud on you. And if the dealer is stupid enough to try this title fraud, the information you have to trade in the lender will prevent the bank you are looking for future payments and not to damage your credit rating.

Well, if you have a loan with a bank for a new car, I suggest you demand that the lender the day after you take possession of your new car and inform them that you are in possession of the car and ask them if your first car payment is due. While on the phone going over information such as your name and address to make sure everything is correct. A car dealer to commit this fraud is often the wrong information on bank documents to mislead the bank to delay the expectation of payment. During your phone conversation with the creditor is aware of the people you spoke with. With this call you cemented your relationship with that lender and if there is a problem in the future you already have an ownership time line. And finally, call your insurance to make sure that they are aware that you owned a new car and that all funds that were paid to them to insure your old vehicle now on the new one. If this information confirms that note, you want to know that you have the insurance, if you are driving that new car. Given these precautions can be a long way to help you avoid serious difficulties and financial losses in the future. If you buy a car, you have to be smart and be careful!

Richard Serge