The Expert Podcast

So, do you ever wonder why it's so hard to get a title for a vehicle if you purchase one? And when you buy it, if you don't get a legal title certificate like this one that has all the vehicle information and ownership information on it, you can't just stroll into the DMV and tell them to give you a title. The reason why is because having the old title provides protection that the ownership is legit. In this article, we're going to talk about one reason that protects you when the DMV is giving you a hard time getting a title.
Right, you might just think, "Well, just give me the title; how hard could it be? Why do you give me the runaround?" Well, the reason is that when you have a title printed with your name on it for that vehicle, that declares you to be the owner. And if anything happened with the ownership of that vehicle before you bought it, then they're not going to give you the title, just like once you have the title, you don't want somebody else just demanding a title from the DMV and taking away your ownership.

Here's a good example of the kind of things that people come up with in crazy creative ways. This happened in Oklahoma, where they were defrauded out of a hundred thousand. Well, how did this work? Well, what happened is that this kid, who's 19 years old, walked into a car dealership with a vehicle that was worth forty-eight thousand dollars. The dealership agreed to purchase the vehicle for forty-eight thousand dollars, but there was a loan on it, and the loan was for seventeen hundred and thirteen dollars, okay? So, the dealership said, "I'll give you forty-eight thousand, we'll pay off your loan of seventeen thousand, and we'll give you the difference. We'll give you a check." You received the check for forty-six thousand two seventy-two.

Now, before they gave them the check, they verified with the lien holder, the bank, and the lender that it was actually seventeen hundred dollars owed, right? Dealerships do this all the time; they contact lien holders, and they buy vehicles with liens on them all the time. And what happened is that he also came back to the dealership a couple of days later with another car, where the payoff amount was twenty-two forty-four and the vehicle was worth sixty-six thousand. So, they gave him the difference on that one too.
But here's what happened: right before he went into the dealership, he made fraudulent transfers on the balance of those loans. So what he did was go into the bank and owe, let's say, sixty thousand dollars on the vehicle, and he made a fake wire transfer or wrote a fake check to the lien holder to pay the loan down, to pay it down from sixty thousand down to two thousand, right? So now on the books, it looks like there's only two thousand owed, but in reality, that transfer that reduced it was fake.

So, within a few days, the bank reversed that payment, and now the payoff went back up, but by now the kid already had the money, right, and he ran off. So the bank now pays the payoff to the lien holder for two thousand dollars, but they don't get the title because the lien holder says no; the payoff is sixty thousand. Well, we thought it was two thousand. Yeah, but that was because of a fake transfer. And these fake transfers can be made in a number of ways: you can write a bogus check, you can do a fake wire transfer that doesn't clear, you can do an ACH that is invalid—there's a lot of ways to do it.
And in the meantime, the dealership is holding the bag. The same thing could happen to you as a car buyer; you could have somebody say, "Look, I want to sell you this car; you pay off my loan; give me the difference; and you'll be the owner." And you call the bank, verify the payoff, and send that much, and the same thing happens. There's another reason why it's not good to buy a car without a title. Even if you do get a title, you want to verify it. If somebody hands you this title and you give them the money, what if you find out later that that title was a duplicate title and they got a fresher, newer title since then that they signed over to somebody else?

Many times, what these sellers will do is get a duplicate title; they'll keep the old one; they'll say they lost it, but they keep the old one. They'll take the new title and transfer it to another state. That way, if you contact your local state, it's still going to be in that person's name, but you won't know that another state has it because it takes several weeks or months for other states' records to come back to your home state. So there's a lot of ways that titles can be scammed. So unless you're handed an actual legal title when you buy a car and you can verify that that title is the most active one with the DMV, you're at risk.
And that's why the DMV goes through a lot of steps to verify these things before they hand you a new title. It may seem like a pain in the neck; it may seem like they're giving you the runaround—a lot of red tape. In some ways, it is. But it's there to protect you because if later on down the road you own that vehicle fair and square and somebody else does one of these funny business with a title, now you're out of your vehicle. So there's a reason that titles, by definition, are difficult to get. It's kind of like if you walk into the bank and say, "Hey, just give me ten thousand dollars." Well, they're going to verify that you actually have ten thousand in the bank and verify your ID because handing you a title is just like the bank handing you ten thousand dollars.

Whatever the value of that vehicle is, when somebody gives you a title with your name on it, that's like giving you the value of that vehicle. And you might say, "Well, the vehicle is not worth that much." Doesn't matter, they take it one thousand dollar vehicle just as seriously as a ten thousand dollar vehicle or a hundred thousand dollar vehicle because to somebody, that money is real money. So be aware that when it comes time to get a title for a vehicle from the DMV, the fact that that government agency is kind of being a little difficult about it is there because they're considering that to be a serious thing.
When they give you that title, they're granting you legal ownership. And if you don't have the right proper paperwork, just a bill of sale, they don't know who signed that bill of sale, they don't know if it's the actual owner, and they don't know if maybe the owner signed it over to somebody else. So, a bill of sale normally is not sufficient to get a title by itself, and that's why they make you jump through some hoops.

There's solutions to these problems; don't despair if you bought a car without a title; as long as it's legitimate, no liens, no salvage, no theft, you can get a title for it. Just remember, it's not going to be as easy if you get the title like you're supposed to. In fact, in most states, it's actually illegal to buy and sell cars without titles; people do it all the time. So don't worry about the fact that it's going to be a big deal unless there's something wrong with the history of that vehicle.
If you have other questions, you can reach us at cartitles.com or email our help desk at help@cartitles.com.