What is Title Fraud? – A Car Dealer Scam to Avoid

Car Dealer ScamBuying a used car can be a risky venture for reasons you didn’t even suspect.

When a customer buys a new or a used car, in most states the dealer should transfer the title into the buyer’s name. Usually, they must do this within a certain period of time (30-40 days). If the car dealer doesn’t do it in time, then the vehicle owner has right to cancel the deal according to a Title Defect Law.

According to the amendments made to the Title Defect law in a number of states the vehicle owner is entitled to inform the seller that the sale is being canceled. In the meantime, it doesn’t say at all whether the customer should inform the dealer in writing or orally.

If the vehicle owner waits with patience, and the dealer transfers the title before he actually says he is about to cancel the deal – the consumer gets stuck with the vehicle. Certainly, the problem is that major part of consumers do not know that they have right to annul the deal for such a technical motivation. And the auto dealer won’t tell you about it.

Why is the legislature so severe about providing the buyer with car title? If the car dealer is unavailable for contact then you should turn to an attorney. In some states, there are funds which buy vehicles from consumers who became victims of fraudulent dealer tricks.

As a conclusion

Certainly, the wisest thing to do is to be careful and make sure the dealer will give you the title. If the customer is paying cash, the dealer must sign the title at the same time. If he fails to do that, think twice before paying for the car. Do not just give your money away.