WRAL Investigates: Buyer beware if you're in the market for a car

Imagine buying a used car, only to find out two months later you can’t legally drive it.

A change in state law gave dealers wiggle room on securing titles and tags, but WRAL Investigates found that it can put some buyers in a predicament. When it comes to "title in transit," buyers need to know the risks and their rights.

"The experience was excellent at the dealership," Sammy Rackley told WRAL Investigates after finding the 2018 Ford Expedition Max he had been looking for.

However, when Rackley drove the Expedition off the Capital Ford lot in Raleigh, he didn’t realize there was a "title in transit."

Just a few years ago, dealers had to hold titles to sell cars and trucks,, but in 2017 state lawmakers gave them more leeway. They now get 60 days to secure the title after sale and get the license tag issued.

"Title in transit basically means I don’t have the title, but it is in transit somewhere coming to me," says Lt. Charles Taylor, an investigator for the Division of Motor Vehicle’s License and Theft Bureau.

In the past two years of supply chain challenges, his office has launched 46 formal investigations where customers were left with no tags or title after two months of paying and waiting.

Taylor said when that happens, drivers are out of luck, "Operation of the vehicle must cease, so it really puts a bind on customers that purchased vehicles."

Jeff Ketcham, pre-owned sales director at Johnson Lexus, said the new law doesn’t favor dealers over consumers, "No, I don’t think so. I think it’s pretty equally beneficial."

Ketcham said before "title in transit" dealers might have dozens of vehicles sitting on the lot with unsecured titles due to unforeseen liens or out of state complications, which holds up the seller and buyers.

Ketcham says that hurts his bottom line.

"Because everyday that they’re sitting is money," Ketcham said. "Maybe there’s the perfect car sitting back there somebody’s looking for, and they never knew about it because we didn’t have the title to it …

"Whereas, now, they can end up with exactly what they were looking for."

The risk is title complications that can’t be resolved before the temporary tag runs out, leaving buyers like Rackley in a bind.

"It was a little frustrating," he said. "Not having tags, we’re from a small town, you get pulled over, it’s kind of a big deal if you have an expired tag. For me it’s not our fault, it’s the dealership’s fault."

Rackley complained to Capital Ford and the DMV. Investigators informed him the law gives him recourse.

"You have a right to request in writing liquidated damages and liquidated damages are 5% of the sales price not to exceed $1,000," Taylor said.

Rackley wrote a letter and Capital eventually made it right.

"A couple of weeks later we ended up with a check, so it worked out and tags," he said.

Taylor says Rackley’s outcome is rare, "I’ve only to this day had people two who requested liquidated damages and received it."

The bottom line, check on the status of the title before you buy that used car, understand your rights and seek out reputable dealers who will be transparent about any problems.