Paper work to transfer property at a dealer auction.
By Christopher Morabito, J.D. | August 3, 2008
Paperwork
After your cars are sold for the day and after you have checked arbitration, now is the time to transfer ownership of the cars to each individual buyer.
There are three things you need to transfer ownership at auction. They are the Title, reassignments and auction invoice. Every vehicle after 1973 has a “Certificate of Ownership” called a title. They vary in shape, size, color and format but essentially, they are all the same in the following respects. They include the following information:
· name of car maker
· name of car’s model
· year of the vehicle
· color of the vehicle
· size of the engine
· type (example 4-door sedan)
· VIN # (vehicle identification number)
· title number
· number of owners
· mileage (actual or TMU which stands for true mileage unknown)
· state of origin (state originally sold it)
· name of owner
Every time you buy a vehicle you will receive a title. Consequently, every time
you sell a vehicle, you will give a title to the purchaser. You must, however, do more than just hand the title to the purchaser. You must “assign” it over to him. To “assign” ownership is a legal term of art which means you are handing over the rights of ownership of the vehicle to another party. To assign = to transfer ownership. The car business term of art in this instance is “re-assign.” The phrase re-assign is used in the car business because usually it was assigned to one dealer by another dealer so, therefore, you are reassigning the vehicle to your purchaser.
To re-assign the car to the purchaser, you take the title which has someone’s name on it as the owner, which has now been assigned to you, or another dealer, who re-assigned it to you. Now you take your state issued reassignments and assign the vehicle to the purchaser.
Reassignments are self-explanatory, asking you to fill in the blanks with information. The re-assignment process is simple; however, it is very important that you do it correctly because if you foul it up the first time you may have to get a duplicate title, in which case your payment of the vehicle will be delayed or the deal may be off all together! Therefore, you must do your paperwork correctly.
The following is an example of re-assigning a car. NOTE all the car’s papers, that is the title, assignments, re-assignments, are called “back-up” papers.
Title:
Front: Assume the title has as the owner’s name as ABC Company on the front.
Back: The back must show ABC Company as the seller and your company as the buyer.
Now take your reassignment and transfer the car to the purchaser by listing your company as the seller and your buyer’s company name as the purchaser.
The exception to the above is when the title is blank on the back when you get it. In this situation, you simply fill in your name on the back as purchaser and then use your re-assignments to assign it to your purchaser.
When not selling at auction, you may, in some cases, when the title is blank on the back, you may just fill in the purchaser’s name without using any re-assignments at all.
Most of the time, a car dealer gets a title for a vehicle and he puts it in a file and then does the same for each vehicle he has. However, there are a growing number of states that require that a dealer title a car in the dealer’s own name if he keeps it in inventory for more than fifteen days. The reason for this is that if a car remains titled in the prior owner’s name, that titled owner could always go to the motor vehicle office and say that he or she lost the title and apply and receive a duplicate title. Then that party has title to a car that the dealer thought he owned because a duplicate title supercedes any title before it. Therefore, some states make it mandatory that the dealer title the car in his company name, while some states make it optional. This is called “flipping” the title.
To flip a title, one needs only to take the old title, along with the back-up papers to the motor vehicle office and make an application for title. The cost to get a new title is very inexpensive and it is worth every penny for three reasons:
1. Peace of mind that the car is titled in your name.
2. By titling the car in your company name, you can now use the title as collateral to give to a bank to hold if you want to arrange a loan with a bank.
3. Makes getting duplicates much easier.
Topics: sell at auctions |
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