Some dealerships not delivering on titles
Posted December 7, 2009 6:59 p.m. EST
Updated December 7, 2009 8:12 p.m. EST
Raleigh, N.C. — The North Carolina Division of Motor Vehicles says that within the past two years, 62 auto dealerships statewide have not delivered titles on vehicles paid in full within the time required by law.
By law, the lien holder has 30 days to deliver.
"This is a problem, and it's gotten worse since the economy went down," DMV Commissioner Mike Robertson said Monday.
The reasons why vary, Robert said. One reason, he said, is that the economic downturn has caused dealerships to make bad decisions to keep businesses afloat.
In these "out-of-trust" situations, dealers borrow money for vehicle inventory on a vehicle-by-vehicle basis, also known as floor-plan financing. The dealers, however, do not repay the lender.
"It's sort of like a Ponzi scheme," he said. "You're taking proceeds from one sale to pay off another sale. Eventually is catches up to you."
Robertson said that 11 of the 62 dealers investigated were large franchises backed by manufacturers. Locally, that includes:
- Olde Raleigh Motors on Glenwood Avenue in Raleigh
- 919 Motorsports on Capital Boulevard in Raleigh
- Security Auto on N.C. Highway 50 in Benson
- Neil Ward Boulevard Auto Sales, Capital Boulevard in Raleigh
- Auto Brokers in Goldsboro
- Paragon Pre-owned, U.S. Highway 401 in Raleigh
- AutoX in Zebulon
Robertson said out of the 861 reported cases of consumers not receiving their titles, 520 are still unresolved because the state agency can't locate the title.
Mike Karaman is one of those cases.
Having bought the car of his dreams earlier this year, he paid it in full nine months ago but still hasn't received the title.
"It became a surprise, because with a dealership, you trust them to do the paperwork," he said.
He says he is hopeful for a positive outcome but admits that every time he parks his car, he's concerned it might not be there when he gets back.
"They have right-of-ownership of the car until the lien has been paid of, so, if they come with a court order, then I have to surrender the car," he said.