Dealer Douchebaggery

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Recently by Eric Peters: 55 MPG Is Going To Cost Us

It really can happen to anyone – even someone who is pretty hip when it comes to cars. Hell, it recently happened to me!

About six weeks ago (the date’s importance will become apparent in a minute) I went car shopping with a good friend of ours. She was interested in a convertible Toyota Solara that was for sale on the lot of a local – and higher-end – used car lot. The car itself was not the problem. Low miles, great condition, as advertised. It checked out – and my friend negotiated a fair price for it. She drove the convertible home with her dealer 30 day tags that very day. But when a month had gone by by and she hadn’t received her actual tags – or her title – she went back to ask how come. Usually, you get your permanent tags within a couple weeks or so – and the title paperwork should be handled within a few days of sale. Most dealers handle all this for you – just as this dealer promised to do. That’s when the proverbial cat leapt out of the bag.

Turns out, this used car lot is also a consignment lot – a fact which they neither advertised nor disclosed.

Now, there is nothing shady or unethical about consignment lots. What is a consignment lot? It’s a place that sells cars on behalf of their owners. You have a car you’d like to sell, but you don’t want to deal with tire-kickers or the paperwork. A consignment lot handles all that for you – plus puts your car on their lot, where it will probably get seen by more people than it would parked in your driveway. In return, you either pay a fixed fee, or a commission based on a percentage of the sales price, when the car actually sells.

Again, nothing shady or unethical about any of this – as such. Consignment lots can be a great way to sell-off your old car, when you’d prefer not to sell it yourself and aren’t looking to trade it in on a new car.

But there are some issues with buying a car this way that a prospective buyer ought to know about – and more, has a right to know about. And which the dealer/consignment lot has an obligation to put on the table.

Enter the problem. Because this dealer didn’t.

This car my friend bought? The dealer didn’t actually have the title to it. So they could not transfer it to her. The car was not only still technically the legal property of the person who gave it to the consignment lot to sell on their behalf – it had a bank lien on it. It was not paid-off. The title could not be transferred until the lien holder had been paid off.

Read the rest of the article Eric Peters [send him mail] is an automotive columnist and author of Automotive Atrocities and Road Hogs (2011). Visit his website.

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