Home » Articles » Titles » Watch Out For Title Problems From Closed Down Dealers
The automotive industry is currently witnessing a wave of financial struggles, with prominent dealerships facing the risk of closure. In particular, Carvana, a major player in the automotive retail space, recently reported staggering losses, raising concerns about the fate of its customers. In this blog post, we’ll explore the potential pitfalls and proactive measures when dealing with a dealer that is on the brink of going out of business.
Carvana’s financial troubles, including a reported billion-dollar loss in the fourth quarter of 2022, have raised red flags about the future of the company. While the outcome remains uncertain, this situation prompts a crucial question for those who have purchased vehicles from dealerships facing financial distress: What happens to your title, and how can you protect yourself?
When a dealership faces closure or financial instability, two primary concerns emerge for buyers: the availability of their title and the potential release of liens on the vehicles they’ve purchased. Let’s delve into the first issue: title retrieval.
Whether you’re buying from Carvana or any dealership with financial uncertainties, it’s wise to ask for a copy of the title before completing the transaction. If the dealer can present the title, it provides a layer of assurance that you won’t face challenges in obtaining ownership later.
Dealers often operate on a floor plan, where the titles are held by banks or auctions until the vehicles are sold. If the dealer fails to promptly pay off the loan after the sale, obtaining the title might become an intricate process. As a buyer, understanding this dynamic can help you navigate potential title issues.
If you’ve already purchased a vehicle and are encountering title-related issues due to the dealer’s financial troubles, swift action is crucial. Waiting might result in delays, and you could find yourself at the mercy of a complex process.
Immediately start sending notices to the dealer, the DMV, the titling authority, and their licensing authority. Being proactive ensures you’re not lost in the bureaucratic shuffle, and your concerns are addressed promptly.
If the dealer is grappling with multiple titles to pay off, being the proactive customer can work to your advantage. Regular communication and persistent follow-ups could potentially prioritize the processing of your title, safeguarding your interests.
The risk of dealerships, including industry giants like Carvana, facing financial instability underscores the importance of buyers being vigilant. Protecting yourself from potential title problems requires diligence and a proactive approach.
As the automotive finance landscape experiences tremors, buyers must arm themselves with knowledge and take proactive steps. Whether dealing with Carvana or any dealership in financial distress, staying informed and acting swiftly is paramount to securing your title and protecting your investment.
Don’t let uncertainty hold you back. If it’s your car, you deserve a title.
Tell us about your vehicle and we'll direct you to a title recovery method that matches your scenario.
"*" indicates required fields
