The Expert Podcast

Okay Here's a title nightmare waiting to happen. Big time article today in fortune magazine one of the largest financial publications about a subprime auto lender going out of business Right. And we get hundreds of calls every day from people who bought a car from a dealer and they went out of business before they got their title. After they paid it off meaning that they did a buy here pay here with this dealer So they paid payments directly to the dealer one year two years whatever it is at the end of that period of time. The dealer had gone out of business and they never got their title Cause you don't get your title until you make your last payment. So if. dealer goes out of business within that period of time, you're out of luck and it's a very serious problem to get a title. And you can see the link below of some methods to get your title If you've been a victim of a dealer going out of business but what does it mean for this particular dealer and how big of a problem is it? Well this dealer is called American car center. And they closed their doors. And it had a $222 million bond sale that they just pulled They were trying to get some money. they have 288 people that work for them. at their headquarters, they have 40 dealerships across 10 states So what does that mean? Well if each dealership let's say sells. I don't know What is the dealership going to sell 30 40 cars a month Maybe probably more but let's say 40 cars a month That means every month they're putting like 1,600 cars in the street over the. Overall their dealerships There's probably more than that right. But let's just call it 1600 cars. Every year, right That's like 20,000 cars that they're putting in the street. Without giving titles because they hold the title until it's paid off. So even if their loans are. for a year long, That's 20,000 people. Who are at risk of not getting a title? 20,000 people. And if their loans are two years or if they sell 50 cars a month you could be talking. 30 40 50,000 There's a possibility there could be a hundred thousand cars out there with title problems. So what happens. So you buy a car from this dealer, you pay payments for six or eight months, and then they go out of business. And now how do you get your title? Right. Presumably there may be a company that comes in and buys up their assets or takes over their operations or whatever it is or they go bankrupt. But in the meantime, your title is now. At risk. Right? So what you want to do is if you are a. customer of this dealer or any dealer for that matter. That goes out of business while you're making payments to them right away. You want to get good legal advice. This may be something you contacted an attorney about at least make a filing with the licensing board. How do you go about getting a title Well what you need to do is you need to file for a court order title or a magistrate title sometimes called a civil lien. Right And it may eliminate you having to make the rest of your payments to. But what you want to do is start that process early. Because in some cases, the titling division of your state has a victims restitution fund. That this dealer has been paying into for years. Once that fund is exhausted maybe it's not going to be as easy to get a title you want to be at the front of the line. So if you are a customer of this dealership or any dealership that has gone out of business, first thing you do is you file for a magistrate title. Or a civil lien title or a court order title every state and even counties call it different things. But this is huge news This could mean tens of thousands of vehicles out there with title problems with lean release problems, because there's really nobody around anymore that can issue these titles and sign off on lien releases because they're going out of business. You know they they said right here, You know they laid off. 288 people. All employees will be terminated. By the end of the business day. So it's not like they're going to be around to finish up on paperwork or to get people their titles, all employees are gone that same day was very sudden. So it's not like they're going to have a staff that says Hey let's wind it up Let's get these people their titles they're done. Office is closed. That's going to be a problem. So anybody who has this type of scenario you want to start right away with getting the process going to make sure that you don't lose out on your vehicle and all that money you spend on payments is down the drain.