May 17, 2022

Botu Linum

The Car & Automotive Devotees

Despite warnings, Florida could give car dealers more time to turn over titles

5 min read

TALLAHASSEE — It’s boom times for auto dealers, with used car sales leading to record profits across the nation.

For hundreds of Florida customers, however, the boom has been a bust: After buying their car, they’ve had to wait months for the dealership to fork over the title. Without the title, they haven’t been able to register or drive their new purchase.

That’s because dealers have been reselling used vehicles without first possessing the title, a longtime practice in an industry that emphasizes selling vehicles as quickly as possible.

The solution some lawmakers came up with is to give dealers more time to transfer titles to owners, extending it from 30 days to 60 days.

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

“They think they’re fixing it,” Pasco County Tax Collector Mike Fasano said. “They’re only going to make it worse.”

The Department of Highway Safety and Motor Vehicles has levied tens of thousands of dollars in fines for making customers wait for their titles in the last few years. One Floridian waited 209 days — nearly seven months — last year for the online dealer Vroom to turn over the title to the 2017 Tesla the customer purchased, according to a complaint filed against the company.

Possessing a car, but not its title, can make it illegal to drive after the 30-day temporary tag expires. A reporter from WFLA-Ch. 8 in Tampa documented a paramedic who had to rent a car to get to work because the online dealer Carvana still hadn’t forked over the title to the Nissan Sentra she bought eight months earlier.

Both Vroom and Carvana have hired lobbyists to advocate for 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 hasn’t spoken with their lobbyists or representatives. He noted the companies “are fully responsible and accountable for any past misdeeds.”)

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

The intent, Smith told lawmakers, was “just giving a little bit of flexibilities to these dealers that have been, through no fault of their own, negatively impacted by COVID.”

Smith said 90 percent of the titles are transferred within 30 days in Florida, but dealers are having problems with their finance companies.

Here’s what dealers say is happening:

  1. Someone will sell or trade in their car to a dealership or online dealer, such as Carvana or Vroom.
  2. If the seller doesn’t have a title — say, because they still owe money on the car — the dealer has to pay off the loan with the finance company to obtain the title.
  3. The dealer will then list the car for sale while waiting for the finance company to send them the title, often through the mail.
  4. In the red-hot car market, those cars may sell before the dealer receives the title from the finance company. (Not all dealers do this.)

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The problem, which started in 2018, has been exacerbated because finance companies have been short-staffed during the pandemic and are taking longer and longer to send the titles, said Ted Smith, president of the Florida Automobile Dealers Association, which represents about 850 new-car dealers in Florida.

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

“We want to put people in cars. We want to get people titled right there at the desk if we can do that,” Smith said. “There’s no reason at all for a dealer not to hand over the title and registration as quickly as possible.”

The Department of Highway Safety and Motor Vehicles has been reluctant to allow dealers more time to transfer a title. It said an earlier version of the 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 dealers is when they don’t turn over titles within the required 30 days, said Department of Highway Safety and Motor Vehicles spokesperson Aaron Keller.

Last week, the department hit Vroom, an online-only used car dealership, with a $47,000 fine for not forking over titles within 30 days.

A spokesperson for Vroom said they were “committed to continuing to work with customers and the Florida Department of Motor Vehicles to solve any issues Florida residents might have at any point in that 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 action was dropped after the company reduced that number to 29, with 11 of those customers given buy-out offers. (The remaining 18 were not responsive or failed to provide paperwork.)

“The department believes Carvana’s change in customer service delivery and business practices, including no longer selling vehicles until the vehicle’s title is in your possession, will reduce similar issues moving forward,” the department’s director wrote to the company’s director of governmental affairs on Feb. 1.

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

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

The sponsor of the Senate bill, Sen. Tom Wright, R-New Smyrna Beach, rejected that idea.

“So then they have that inventory sitting,” Wright said of the dealers. “Why not require the lenders to release the lien on time? That’s the problem.”

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