Issue with title from dealer

Long story short the Toyota dealer my wife bought her car from excluded the bank from the title. We’ve had the car for 4 months now and got a letter from the dealer asking us to transfer the title to the bank. We fully plan on paying the note on the car. But at this point I don’t see a reason to transfer the title, we have a clean pink for the car which I thought was strange but have never dealt with this bank before so I just didn’t know if it was their normal.

So my question is, can I just file this letter away and ignore it? What’s the worst the dealer or bank could do?
Maybe file a lien against the vehicle?
Could they repossess the vehicle? We are up to date obviously actual we pay extra on the principal every month.

They have the signed the contract from the sale of the car, seems like that should be enough for them to pull a lien if they feel so inclined.

 

I am no lawyer, nor want to be, but it seems to me that the dealer screwed up and did not put the bank as lien holder. If the bank files a lien against the car and wants the title back, in my thinking, the dealer should be paying any necessary title fees. Not you. You already paid fees at time of transfer. If they are an honorable dealership, it is on them to make this right at no additional cost to you -the customer. Since you did get a letter, contact the bank and ask them which route would work best for them and you both. That might avoid an un-necessary repossession tow bill and impoundment due to non communication. Just my two cents worth

 

Mmm... well, I guess if it were me, I'd go ahead and have the dealership handle that to make things right.

I'm not a lawyer, so I don't know if they do have any recourse in your situation, but I always figure if I agree to a deal, and someone messed up, why make waves and cause a headache for that person (maybe they'd even get fired over it) when in the end it really doesn't cause much issue from your perspective.

Just my $0.02

 

That’s where I’m leaning. There not asking for money just for me to sign a transfer forum so the can fix the issue. I’m more of just annoyed with the situation and the fact it took 4 months for them to catch, after we got plates registration and a pink slip. I also don’t want to give the dealership an opportunity to screw me out of paying registration fees or anything like that.

 

Just a personal thing but i’d just send it to the bank like they asked. If youre making monthly payments, the vehicle is technically the bank’s.
The dealer sent the title for my Tundra to me this spring by mistake when I bought it, my bank asked for it, I mailed it to them. Cost me a postage stamp, envelope, and two minutes of my time. (Then paid it off and they mailed it back like 3 months later which was silly)
People make mistakes.

 

Motor vehicle legal requirements vary a lot by state. It can't hurt to contact the state motor vehicle people and see if they have any insight.

 

So no lawyer and it’s been about 20 years since I was a recovery agent. But here is a list of things I would THINK they could do.

1. Change your loan from secured to unsecured. This would raise your interest rate significantly.

2. Put full coverage insurance on the loan at their cost. Again this would jack your payments way up.

3. If you didn’t surrender the title and you decided to sell said car and claim paid off the buyer would be surprised to find the repo guy in their driveway. This would probably lead to a wrongful repossession suit which they would loose. Then you would probably be facing a suit. I had this happen 1 time while repoing. It wasn’t a good situation to be in for anyone.

Just tell the dealer they can fix it on their dime. Which they will/should do.

 

I am not a lawyer and never played one on television, but I would tell them to pound sand. They screwed up and should rectify the title issue.

If you refuse, I would expect nothing less than a suit by the lender to apply a lien on the vehicle. The lender can also sue the dealership for the cost of the vehicle and the dealer could come for you. It rolls down hill. In the end, I would work with the lender and make the dealer pay any transfer title fees since you already (I assume) paid TTL during your purchase.

Like my wife says, you may have to just play nice to avoid any issues. BUT the dealership screwed up. I wonder if the title clerk at the dealership was terminated for this screw up.

 

THIS^^^^^

 

I’m going to sign the duplicate/missing title forum that the dealer sent me. But if they come back asking for money I’ll tell them they can kindly kiss my a.. and they can have the car back before I pay anything above what was on the contract.

 

I would highly doubt they would ask for any money for doing that paperwork. It was a mistake. Also pretty sure nobody is getting fired over a simple clerical error.

I would go as fas as to say even if they said you had to pay X amount of dollars to which you replied not happening this would probably still work out in the dealership favor. Read the small print on the back of your contract.

They are written so that if something happens the dealer is almost always covered. Sometimes it can benefit you. Say you agree on 2.79% apr but your credit qualifies you for say 1.79 or .99% they have to inform you and right a new contract. Had this happen when I bought some quads from Honda. Sales guy even brought me the new contracts to my house.


I guess state laws and lender terms could very your results. But I’m sure you will be fine.

 

They would not be able to do anything with loan rates, terms, etc.... due to Reg Z/Truth In Lending.

If it was me, I would just play nice and work with the bank. You have every intention of paying the whole amount anyway.

Technically, the OP has already done his part and paid TTL, so I would not pay for that. What little it costs, the bank should have no problem paying for that in order to perfect their lien on the car.

Think about it, they could pay the fees and let's say it costs $1k. Or they can not do anything, and you don't pay them another dime and they are out however much you financed. Looks to me like the $1k is small price to pay to perfect the lien.

Dealer and lender should have no problem working together with you. I do not see the big deal.

 

I don’t disagree with the no big deal. But have you ever financed a vehicle with a lender that requires full coverage insurance. If you don’t provide within usually 30 days(may be longer) they sure can add it to your “loan”. But it is usually just added as an extra cost.

Also if you get a secured loan and don’t supply title with them listed as lien holder they absolutely can change the status of your loan.

 

You can't ignore this, but someone would explain exactly what every step of the process was going to be before I signed any application for duplicate title/replacement title to my vehicle. I'm not sure a duplicate/replacement title is the best way to handle this anyway.

This actually happened to my wife and myself in Texas. When we received the original title to a new financed vehicle in the mail, I knew what had happened. I contacted the general manager who was a friend (they were still completely oblivious). She requested I bring the original title in to them. We turned it over and they got the registration straightened out at their cost. We received from the dealer a duplicate title with the lienholder named. In Texas, the buyer no longer receives anything that even looks like a title or duplicate title, it's some kind of certificate that names the lienholder. Once you pay it off, the bank sends your original title directly to you in Texas.

 

I'm a branch manager/loan officer. You could technically pay it off and ignore it, but now that financial institution has a loan for which they never had a lien perfected. Paid off or not, if a state or federal examiner audits your specific file, it could reflect poorly on them. Someone's ass could be on the line. Do the right thing.

 

this is what I’m used to. Every car I financed I would receive registration but no title. I agree the way they are handling this seems weird with a duplicate title forum. I’ve had decent luck with dealers but it’s mostly because I knew their games and played them just enough to make a deal. But part of me thinks this is another game rather than an honest mistake and I just want to make sure I’m covered.

 

This is not a game. First, find out the dealer's plan for the signed application. Then, talk to your bank. Talk to the DMV. Make the dealer explain if their plan doesn't match what DMV and your bank have advised.

The bank WILL have a lien on your truck to secure their investment, and lawyers will start suing people if they don't get it. You could very well lose your vehicle, the equity you have in the vehicle (trade-in, down payment, regular payments), plus legal expenses.

Edit: My wife's memory allows me to correct my story above. On receiving the original title, my wife called the financing credit union. They were still waiting to receive the original title from the dealer. They requested we send the original title to them which we did. They kept the original title, and I believe we later received either a duplicate title or registration certificate from the DMV. When the car was paid off, we made sure we got the original title from the credit union.