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No, that isn't legal. You should be able to get some kind of resolution from a state division of business regulation. Each state has a different organization that is responsible for that kind of complaint but a couple calls should put you in touch with the right agency. No legitimate car dealership would ever sell a car without a title. It is illegal for them to sell without a way for you to own the car. If you buy without a title, then you are wasting your money.

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Q: What can you do if you purchased a used car from a legitimate dealership and they dont have the title and do not know where the title is; is it even legal for them to sell a car without a title?
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