The Expert Podcast

If you're an automotive business like a body shop, a towing company, or a repair yard, you may have found that doing mechanics has become a lot more difficult. Many of you have had a service, usually a mom-and-pop type company that works from home or some little agency that did your mechanics work for you. You would just give them the VIN number and walk away, and they would do the whole process. And a lot of those companies are now disappearing. Matter of fact, we get 15-20 calls a day from repair shops or automotive shops that say, "Look, I had a place that was doing all my mechanics leans, storage leans, and towing leans, and I can't get a hold of them. Matter of fact, they're supposed to be working on some, and they're not calling me back months later. What's going on?"

Well, the reason why is because mechanics lean is a very specific process that only a licensed automotive facility can do, and it's a way for them to get paid back for repairs that were not paid for by the car owner. So let's say somebody brings their car in for a transmission job. They get quoted $3,000, which would be cheap for a transmission, and they say, "Yep, go ahead with it." They don't show up, and they don't pay the bill. Well, how do you get paid if you're the shop? What you do is you do a mechanics lean, you auction off the car, and then you get your money for your bill. And it's a very difficult process. And part of the reason is that, starting about 15 years ago, the DMV departments, the agencies in all the states that did this for licensing, found out it was often used for fraud. People would just say, "Well, I don't have a title for my car. I'll do a fake mechanics lean. I'll just put in papers for this mechanics lean saying that somebody dropped it off for service." Well, once all the government agencies found out that half of these were fake, they started cracking down, and they said, "You have to have a signed repair order from the owner. You have to auction it off to the public. You can't just put it in somebody's name. You have to show documentation." And they audited these to make sure that they weren't fraud. And they found out that even with that, a lot of them were frauds because you could hire a third party just to rubber stamp it for you.

But now, as most states are going to, you cannot pay somebody to do all the steps. You can have somebody make the paperwork up for you. However, most states now have statutes on the books that say the actual licensee has to send the certified letters, they have to post the ad in the newspaper, and they have to hold the auction. Nobody else can do that for you because you have to sign an affidavit that says that it was all done properly. And if you hire somebody else, then you can't say that. You also have to wait certain periods of time in between each step. And that's one of the things these title services were not doing: waiting 30 or 45 days for notices to come back. So now, most states are saying you can't. If a third party does it for you, they'll reject it. So that's why a lot of these companies are going away. And even in states where it's not illegal, it's now so much more difficult that the third parties can't afford to do it for the fees that most shops are wanting to pay. It could take 10 or 14 hours of labor to do all these steps. So a lot of the third-party companies are saying, "Look, for 10 or 14 hours of labor, you know, I need to get paid 7 or 800 bucks," and most shops don't want to pay that.

So what do you do if you are a licensed repair shop? Look into streamlining the process. If you do a lot of these, get all the paperwork you can. Get it from our website. We even have videos that will give you instructions. Or you can even pay for a consultation with one of our title agents to walk you through it. We have a title service, but it only does the paperwork. We can't send out the certified letters, we can't hold the auction for you, and we can't put ads in the newspapers because, in most states, it has to be done by the licensee. But we can make it easier with the paperwork. But that's the reason why, if you've been wondering why your title mechanics lean company has disappeared off the face of the earth, that's why. And a lot of them were actually shut down because what they were doing was illegal. There's been many of them that have been arrested and put in jail, but some of them, even those who were doing it legitimately, are no longer able to operate because of the new requirements.

Also, if you're not a licensed repair shop, mechanic lean is probably not the way to get a title. But even if you are, in any case, you could do a court order title for a lot quicker, a lot cheaper, and a lot easier than a mechanics lean. You don't have to spend days in court. You don't have to spend months waiting. You could just file a court order and get it done in a few weeks, rather than a few months. So if you want more information about that, also check out our website.