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Red flags in buying a used car?

Hi there, I’m in the throes of buying a used car from a dealer (independent) I liked after visiting about 8 different dealerships and test driving about as many cars. Here’s the deal, I’m finding out later in the game that the title has not transferred yet to the original “owner” from which this car was bought from. Therefore the title is still in the original lender’s name. I’ve been told the title is “on the way” back to the first seller, they’ve been waiting for it so it can be transferred to the dealer, though this fact didn’t come out until I was figuring out financing with a credit union. In fact, I was told that they did have the title when I asked and signed the bill of sale shortly after. I then got financing for the vehicle and was planning on bringing all payment later this week to finalize the deal. But obviously, the details about where the title is is a red flag. I also ran into another huge red flag concerning the background history of the salesperson, won’t get into it on here. I’m planning on calling our state’s DMV (Ohio) to tell them the situation and see what they suggest. As I’m typing all this out, it seems I should walk away from the deal but I signed the bill of sale. How binding is the BoS? The only $ I put down was a $300 refundable hold on my credit card to hold the car. Many thanks for your input


I have seen this happen. It sounds like someone forgot to get the lean signed off. Most times it go’s ok. Just some paper work. I think what I would do is get my deposit back and tell them to call you when the title is clear. I would keep looking also.
The bill of sale IMHO is not binding because they cant sell a car thats not in their name.
I hope you did take it to someone to have it inspected.

They fumbled the ball. Get the deposit back. Used cars are a dime a dozen.

The bill of sale is good when the seller owns something, in this scenario that is not the case.

My personal rule on used cars; ANY red flag–> walk away.

I was once trying to buy a car from a private seller. After we went through carfax-test drive etc, he told me that he never registered the car to his name (owned for a year+), I said no go. His reactions after this was proof that I was correct, he showed what a jerk he was with constant harassing calls.

My bigger concern in this case is what you say-or not-about the salesman.

Get your money back. If the dealer is honest, they should not put up a fight. You might find another car on their lot that you like, and should let them know that. We often learn the most about someone when something goes wrong. Here’s your chance to see if this dealer is a straight-up guy or not.

Thanks so much for your input everyone, I really appreciate it! What I didn’t reveal before in my original post was that a simple google search of the salesperson revealed that he was charged with fraud, not to car buyers, but of an investment case that IS car related. I was shocked. What drew me to this dealer in the first place is that it’s certified green business in our city, selling hybrid and electric cars and I liked their vibe versus the other dealerships I visited. I work in the green industry too so it was a great alignment with my values. The other folks at the dealership, including the owner, have no sordid records on them. In some ways, I’m like, well, the guy is charged and he’s serving his punishment (a big fine). He hopefully learned his lesson and wouldn’t do it again and he’d like to move on, right? How many people do we deal with who have a “past” and would just like to put their nose to the grind and move on? And this person I just happened to have googled versus all the other people I’ve had business transactions with on a typical work day. On the other hand, no title is no title, right? Even if it is “in transit” or “being processed”, it’s not your car until you have the official title IN HAND, is that correct?

Thanks again for everyone’s input,


I should add too that the fraud took place 10 years ago at another city and car business so it’s not this current dealership that I’m dealing with.

It is not unusual to see a salesman sell a vehicle from the back lot (trade-in) without knowing the status of the paperwork. Often the deal works out but if the title can’t be cleared the deal becomes an “unwind” and you will have to return the car.

As far as “title in hand” in the state of Nevada the dealer holds the used car title in the former owers name until the vehicle is sold. The transfer information is then filled out on the title and then sent to the Carson City DMV office. The vehicles new owner or lien holder will receive the title in the mail. A look at the Illinois DMV web site shows the dealer is to handle the transfer. This allows a dealer to buy and sell vehicle the same day without having to store each vehicle for two to three weeks while waiting for a fresh title.

Everyone in America gets a second chance. Just ask for your money back. If the salesman balks, ask to speak to his supervisor. Go up to the owner if you have to.

I think the dealer needs to produce a “clear title” in a reasonable time or you are entitled to your down payment ($300) back. A reasonable period is 7 business days IMO. Tell the dealer to have a title so you can complete the deal by a certain date (not sure when deposit was given to dealer) and if there is no title by that date you expect a full refund of your deposit. All verbal communication should also be confirmed with a written record, letter or email, to make sure you have a paper trail of documentation.

Zebra doesn’t change his stripes.
If you get ripped off, you DESERVE it.
Now, go get your money back.

Hmmm. Green is just a marketing ploy IMHO so it wouldn’t get much weight from me. A guy who committed a fraud ten years ago is still the same guy with the same values. likely to react the same way in the same circumstances unless there was some major change or he is rendered powerless in his current position. In Minneapolis a major major multi-dealership went down in flames with things like not paying off the previous lien holder to clear the title. Might be a common problem but you need to make sure the lien holders are paid before they get your money.

Thanks everyone for your input. I talked to the state DMV, secretary of state investigative officer and the original owners of the car (an organization) and asked the dealer a lot of questions. Weighing everyone’s input, I went with it. The title came in to the dealer the day I got the car. The car, a prius, has gotten 59-69 mpg thus far so I’m happy with it. Overall, it was an educational experience. Thanks again!

Thanks for the update, chicagoanne. I’m glad it worked out for you. Stop back and tell us how you like the Prius as time goes on.