As more used car shoppers turn to the convenience of the internet to find their next vehicle, a surge in complaints about delayed titles from online dealers sparks concern among consumers and regulators alike. Buyers report excessive delays in receiving titles—essential documents proving ownership—from online car dealers, a situation that's prompted some states to take legal action. ABC15 highlights the growing problem, noting consumer protection attorney Hyung Choi's observation that "a lot of the dealers sell cars without titles on hand," and his worry about potential bankruptcy making these issues even more complicated.
Choi warns that there may be a "systematic problem" preventing online dealers from transferring title and ownership promptly. While he didn't mention specific companies, online car sellers like Carvana and Vroom have faced legal battles over missing titles, with Carvana's stock dropping a startling 97% last year alone, leading to widespread layoffs and bankruptcy chatter online. Specifically, it was Choi who, in an interview told ABC15, "Those can get pretty messy on exactly how do you get the title for the car you bought?"
Concerned about the risk of buying from online dealers, particularly if they shutter, Choi advises customers to consider dealer-arranged financing. He asserts that through such contracts, "if it's purchase and financing in one deal, and you can't get the car or title, you're not obligated to pay the car loan." This contrasts sharply with separate financing arrangements like through a credit union, which leaves buyers obligated to pay loans despite not receiving titles or vehicles.
Rebutting concerns over delays, Vroom states that they've made considerable strides in rectifying issues with title and registration, crediting improved processes and technology. Vroom asserts a statistic whereby "98% of customers received their registration before the expiration of their initial temporary tag in October 2022." Alongside this, Carvana points out collaborations with DMVs and government bodies to streamline vehicle registration, aiming to make it "easier for consumers" through actions such as advocating for electronic signatures. These details were provided in a statement obtained by ABC15.
Given the framed picture by Choi's commentary and the online dealers' rebuttals, car owners face challenges that extend beyond just buying. Selling a car can also be complicated without access to a physical title, especially when a quick sale is needed, for example, due to owners leaving the country, as told to Stack Exchange. Dealers cannot apply for a title duplicate on behalf of an owner without power of attorney, necessitating owners to secure a new title before a sale can be completed. The urgency reflected in the anonymous car owner's predicament underscores the advisory from Choi: The complexities of car ownership and the labyrinth of bureaucracy surrounding it remain a challenge to navigate in the digital age, an age where ownership documents are as much a part of the vehicle as its wheels and engine.
