What happens if a dealer goes out of business and the buyer still does not have the title and can not contact the dealer?

Answer 1

titleThe finance company not the dealer holds the title to your car, when it is paid off they send it to your state who then makes a new title in your name and mails it to you. If the dealer is the financier then they will have made arrangements for their notes to be taken over, in the event that they did not your DMV can help you acquire the title if you can prove that you have paid for it. AnswerPresumably you bought a car, that was financed by an agreement for sale...where you pay every week (or month) and don't get title until the entire amount is paid. "We tote your note". These arrangements are much different than actually financing the car with it as collateral.

That the dealer went out of biz while you still owe on the note, meaning they could claim that they want it back because you failed to make timely payments, could be a complication at some point.

2 things to do now though:

Carefully read your agreement. There is normally specific instructions on how you must tender payment - and or where to make legal contact. Make contact by certified letter saying that you have not been able to reach them at the place of Biz, as you always had previously, and have received no communications. If there are no alternative addresses, write the same type of letter, certified mail, to the address of the place of Biz that is closed. (It may well get fowarded). Your just trying to establish in a verifiable way that you have been making reasonable attempts to adhere to the agreement.

Then, and you can begin to do this at the same time, check with your State. Many, if not most, States require used car dealers to be liscensed. They should have contact information, or a process for you to follow already established to assure the title is delivered, if the dealer has flown the coop!