The Expert Podcast

• What happens if a dealership goes out of business?
• Consequences and risks for customers who purchased vehicles from a licensed automotive dealership.
• Dealerships are responsible for providing the title, documents, and legal vehicle transfer, but when they close, problems can arise.

• The Shift Bankruptcy:
  • Shift, a large online vehicle retailer, recently filed for bankruptcy.
  • They are not alone—other companies like Off Lease Only (Florida) and American Car Center (2023) also closed down.
• Risks for Buyers:
  • If a dealership goes bankrupt before transferring the title, buyers may face title problems.
  • Many dealerships use a "floor plan" or line of credit to finance their inventory. If they can't pay off cars before going bankrupt, customers could face title issues.
• The Impact of Car Trades:
  • If a customer traded in a car with a loan, and the dealership fails to pay off that loan due to bankruptcy, they may still be responsible for payments on both the old and new car, leaving the buyer at risk.

• Before Signing a Deal:
  • Always ask to see the title of the vehicle before finalizing your purchase.
  • Verify that the dealership owns the car outright and isn’t still paying off a loan.
• If the Dealership Closes After Purchase:
  • Contact the dealership or DMV immediately to inquire about your title status.
  • Check with the DMV to see if the title has been processed or if there are any issues.
• Seeking Professional Help:
  • Consider consulting a certified title agent for assistance in handling title and lien issues.

• Dealership bankruptcies and title transfer issues are becoming more common, and the problem could spread further as more dealerships close down in the coming years.

• More information on lien releases can be found on our website.
• Consultation with a certified title agent is available for those needing professional advice.