Florida agency questions invoice value for used car titles

The length of time auto dealerships must provide titles to used car buyers became the subject of legislation in the 2022 session of the Florida Legislature.

The length of time auto dealerships must provide titles to used car buyers became the subject of legislation in the 2022 session of the Florida Legislature.

PA

It’s a boom time for car dealerships, with used car sales leading to record profits Across the country.

For hundreds of Florida customers, however, the boom was a failure: After buying their car, they had to wait months for the dealer to shell out the title. Without the title, they could not register or drive their new purchase.

That’s because dealers resell used vehicles without owning the title first, a long-standing practice in an industry that emphasizes selling vehicles as quickly as possible.

The solution proposed by some legislators is to give dealers more time to transfer titles to owners, increasing it from 30 days to 60 days.

This has both state tax collectors, who register vehicles, and the Department of Highway Safety and Motor Vehicles warning that the legislation could harm consumers.

“They think they’re fixing it,” Pasco County tax collector Mike Fasano said. “They will only make things worse.”

The Department of Highway and Motor Vehicle Safety has imposed tens of thousands of dollars in fines for making customers wait for their titles over the past few years. A Floridian waited 209 days — nearly seven months — last year for online retailer Vroom to return title to the customer-purchased 2017 Tesla, according to a lawsuit filed against the company.

Owning a car, but not its title, can make driving illegal after the 30-day temporary tag expires. A WFLA-Channel 8 reporter in Tampa documented a paramedic who had to rent a car get to work because online dealership Carvana had still not provided the title of the Nissan Sentra she had purchased eight months earlier.

Vroom and Carvana have both hired lobbyists to defend House Bill 1517, co-sponsored by State Rep. David Smith, R-Winter Springs, and Rep. Andrew Learned, D-Brandon. (Smith said Vroom and Carvana had nothing to do with his drafting of the bill, and he did not speak with their lobbyists or representatives. He noted that the companies “are fully responsible and liable for any wrongdoing pass”.)

The bill, which passed its first committee unanimously on Tuesday, would give dealers 60 days to return the title and extend a temporary tag to 60 days to match. They plan to amend the bill to expire on July 1, 2025.

Seeking more flexibility for dealers

The intent, Smith told lawmakers, was “just to give some flexibility to those dealers who have been, through no fault of their own, negatively impacted by COVID.”

Smith said 90% of titles transfer within 30 days in Florida, but dealerships are having issues with their finance companies.

Here’s what the dealers are saying:

Someone will sell or trade their car to a dealership or online reseller, like Carvana or Vroom.

If the seller doesn’t have a title — say, because he still owes money on the car — the dealer must repay the loan with the finance company to obtain the title.

The dealership will then list the car for sale while waiting for the finance company to send them the title, often by mail.

In the hot car market, these cars may sell out before the dealer receives title from the finance company. (Not all dealerships do this.)

The problem, which began in 2018, has been exacerbated because financial firms have been understaffed during the pandemic and are taking longer and longer to send titles, said Ted Smith, president of the Florida Automobile Dealers Association, which represents approximately 850 new car dealerships in Florida.

Dealers don’t wait to receive the title before reselling the car for one simple reason: Customers don’t want to wait that long, he said.

“We want to put people in cars. We want people to be headlined right there in the office if we can do that,” Smith said. “There’s no reason a dealer shouldn’t turn over title and registration as quickly as possible.”

The Ministry of Road Safety is concerned about the bill

The Department of Highway Safety and Motor Vehicles is reluctant to give dealers more time to transfer a title. This said an earlier version of House Bill 1517 “would erode much-needed consumer protections.”

The department still has concerns about the current form of the bill. The most common complaint Floridians have about dealerships is when they don’t turn over titles within the required 30 days, said Department of Highway Safety and Motor Vehicles spokesman Aaron Keller.

Last week, the department hit Vroom, an online-only used car dealership, with a $47,000 fine for failing to provide titles within 30 days.

A spokesperson for Vroom said it was “committed to continuing to work with customers and the Florida Department of Motor Vehicles to resolve any issues Florida residents may encounter at any time during this process.”

The state also took action last year against Carvana, a competing online-only used-car dealership, which had nearly 400 titles not filed within 30 days. The stock was dropped after the company reduced that number to 29, with 11 of those customers receiving buyout offers. (The other 18 did not respond or provide documentation.)

“The department believes that Carvana’s change in customer service delivery and business practices, including stopping the sale of vehicles until the vehicle title is in your possession, will reduce similar issues. in the future,” the department director wrote to the company’s director of government affairs on Feb. 1. 1.

Fasano, Pasco’s tax collector, said other companies also shouldn’t sell vehicles until they have the title. Giving dealers more time to transfer title will give them another deadline to miss and could complicate the situation for customers.

“It’s just baffling to me that someone is selling a vehicle that you don’t have the title for,” Fasano said. “You can’t do that in a private sale. You would be arrested if you did that. It’s called fraud. »

The godfather of Senate billSen. Tom Wright, R-New Smyrna Beach, dismissed that idea.

“So they have that inventory in place,” Wright said of the dealerships. “Why not force the lenders to release the lien in time? This is the problem.”

This story was originally published February 11, 2022 3:48 p.m.

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