Finance, Credit and Repossession Information Resource

Can a Dealer Repossess a Car Before Registering it

leinregisteringOver the years of being in both liquidations and repossessions I have encountered the problem of needing to repossess a car or vessel before actually titling it for several reasons I will outline below. First off quite often someone makes a car purchase and might be short on the registration fees or the tax money or even a touch short on the car so the dealer figures OK no problem I just won’t register the car until they pay it. I used to think like that years ago, until I tried to do a legal repossession and ended up having an issue and almost taking the loss.

If someone buys a car from you and there is any kind of balance due or if it is a check transaction you must go on as a lien holder. The customer will not like this but too damn bad, nobody can be trusted and it is what it is. If they are unwilling to allow you to do them a favor and be a lien holder on the vehicle the only other thing you can do, is have them bring the balance in cash before releasing the vehicle otherwise there will be no legal repossession. Remember that possession is nine tenths of the law so if they really rob you and you take the car back quick enough you may be in good shape but you want to look at the legalities a little closer in your state.

Will I lose money if I go on the car title as a lien holder

What the customer doesn’t understand is that you really are risking your money even if you do go on as a lien holder. Lets say he owes you $300.00 on the total balance, it doesn’t matter what its for, registration, taxes or whatever. It is the balance on the car sale, so if you go on as lien holder you will actually have to follow through with registering the car which costs money in which was not paid in full. Do I like this law, no not at all but the law is the law and if you want to make the sale and allow them to leave it must be done like this so that you can repossess the car and later file for a repossession title.

If you end up repossessing the car, it will cost you the amount of the repossession, the amount of the registering of the vehicle and if it was a bounced check, you are at a loss, if it was a balance due, you will then send them a check less the repossession fees of what they did give you for the car. Usually it will never get that far unless it is a total bounced check. Not many people will lose a car over a short $300.00 for registration.


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