Car buying question-WWYD

[purplepenguin7]

A few days ago I bought a car at a dealership. Negotiated a trade in for my old car, except there was a small snafu of not having the physical title yet. I paid off the car about 3 weeks ago and the title process in NJ is lengthy. So the dealership said we could leave them a check for the trade amount to hold until the title arrives. Now they are saying they want the car too so they will have my car PLUS a check (10K, not a small amount). Is this normal protocol? I am not very comfortable with them having a 10K check and my car but I don’t want to push back too hard and be an asshole. We’ve already driven the new car home and taken possession.

[lucybrown]

I have no idea whether this is normal protocol, but I would not be comfortable with this either. They get the car or the check. Not both.

[TR]

I'd say they can have the car and give me back the check. Is the title being sent to you?

[purplepenguin7]

Jan 4, 2023 10:52:57 GMT -5 TR said:

I'd say they can have the car and give me back the check. Is the title being sent to you?

We got the title with the bank on it (originally financed the old car) plus a lien release which we now have to take the DMV. Going there tomorrow as it was the first available appointment. It’s my understanding that it will still take 3-4 weeks to receive the title in the mail after that. The dealership knows this all and has written “45 days” in the contact/paper work.

[livinitup]

You should definitely do all you can to be an asshole. They are.

[Pilsy]

Jan 4, 2023 10:58:58 GMT -5 purplepenguin7 said:

Jan 4, 2023 10:52:57 GMT -5 TR said:

I'd say they can have the car and give me back the check. Is the title being sent to you?

We got the title with the bank on it (originally financed the old car) plus a lien release which we now have to take the DMV. Going there tomorrow as it was the first available appointment. It’s my understanding that it will still take 3-4 weeks to receive the title in the mail after that. The dealership knows this all and has written “45 days” in the contact/paper work.

I might be misunderstanding, but I thought she was asking to clarify whether it's ultimately going to pass through you or going directly to the dealer.  

Regardless, I'm with the others and wouldn't be comfortable with this. Is the check dated for the day you wrote it or is it dated for 45 days from the sale? If it's dated far enough out so you can cancel it (despite a fee, I assume), I might be ok with it, but I still think their demand is unreasonable. 

[purplepenguin7]

Jan 4, 2023 11:29:24 GMT -5 Pilsy said:

Jan 4, 2023 10:58:58 GMT -5 purplepenguin7 said:

We got the title with the bank on it (originally financed the old car) plus a lien release which we now have to take the DMV. Going there tomorrow as it was the first available appointment. It’s my understanding that it will still take 3-4 weeks to receive the title in the mail after that. The dealership knows this all and has written “45 days” in the contact/paper work.

I might be misunderstanding, but I thought she was asking to clarify whether it's ultimately going to pass through you or going directly to the dealer.  

Regardless, I'm with the others and wouldn't be comfortable with this. Is the check dated for the day you wrote it or is it dated for 45 days from the sale? If it's dated far enough out so you can cancel it (despite a fee, I assume), I might be ok with it, but I still think their demand is unreasonable. 

Ah sorry if I misunderstood. I believe the title will be mailed directly to me from the DMV, not to the dealership. I don’t think I’d want it to be sent directly to them just so I can make a copy and also have proof it was hand delivered. The check is dated the day of purchasing the new vehicle.

[ohgillian]

Nopity. They can have one or the other.

[fiddles]

Maybe regional but, why isn't the dealership handling all of the DMV paperwork?

We traded in a car that was paid off, didn't have a title, and the dealership handled it all. No way would I give them a $10k check and the car. Is that car just going to sit on their lot until they get the title?

[flygirl]

I don’t know the normal protocol but I’d give them the check or the car. They don’t get both otherwise your collateral is more than they gave you.

[meanie]

Here to commiserate. When I moved from MA to NJ it took the entire 9 months I lived in NJ to get my car registered because the DMV kept losing the paperwork.

How do they plan to ensure the check is not cashed? What if they sell the trade in, do they return the check or destroy it? I don't know if that is normal practice but it sounds like a disaster waiting to happen.

[mustardseed2007]

Jan 4, 2023 13:16:30 GMT -5 ewall said:

From their perspective, they have money tied up in this deal until you can produce a title. They have essentially loaned you the $10k (or whatever they gave you on your trade that was applied to the deal) until you produce the title. So they are out those funds and they can’t sell your trade. I’m not saying they are right, but it’s a messy deal for sure. Also - do not cancel full insurance coverage on your trade until you hand over the vehicle and the title to them!

Yeah I agree. From their perspective it makes some amount of sense. The other thing is, if they don't have the car in their possession there is no telling what could happen to it. She could drive it or loan it out and it could get totaled. On the flip side, if you give them your car and it's damaged I would want to know in writing that they accept full responsibility and risk for that. 

[puppylove64]

If they have the old car and cash and you both signed a Bill of sale and you have the new car, I would say the transaction is complete. The title often takes time to come and is just formality. You both have the cars you are keeping and the cash is transferred. In my state, the Bill of sale is enough to apply for tag and insurance

[puppylove64]

I wouldn’t even go apply for the title myself. I would sign it over to them and give them a copy of the lien release.

[treschic]

I don’t think this is normal because how would it work if someone didn’t have $10k to write a check for? People trade in cars all the time without title in hand.

[sonrisa]

So is the $10K (1) the amount you are paying for the new car beyond the value of the trade in? (ie. they will be keeping that and the old car long term in payment for your new car) or (2) the value they are giving you for the old car that they are buying from you?

I understand it as the latter (#2). If so, they either get to physically have the old car and wait for title, or have the uncashed check and wait for you to bring in the old car and title, at which time they need to return the uncashed $10K check to you. Given that checks are now deposited electronically, right before handing over the car, I would verify with the bank that they did not deposit or cash the check - perhaps even going so far as to cancel it. The paper check itself is no longer evidence it wasn't cashed.

If it is the former, (#1), then I would give them the car and wait for title to arrive and then hand that over.

[Pilsy]

Jan 4, 2023 13:16:30 GMT -5 ewall said:

From their perspective, they have money tied up in this deal until you can produce a title. They have essentially loaned you the $10k (or whatever they gave you on your trade that was applied to the deal) until you produce the title. So they are out those funds and they can’t sell your trade. I’m not saying they are right, but it’s a messy deal for sure. Also - do not cancel full insurance coverage on your trade until you hand over the vehicle and the title to them!

Valid point. I still don't like it, but I think ewall is right. Excellent advice re: insurance, too. 


Why am I so invested in this??  lol  

OP, congrats on the new wheels. I hope it's all sorted shortly. 

[purplepenguin7]

Jan 4, 2023 17:32:28 GMT -5 puppylove64 said:

If they have the old car and cash and you both signed a Bill of sale and you have the new car, I would say the transaction is complete. The title often takes time to come and is just formality. You both have the cars you are keeping and the cash is transferred. In my state, the Bill of sale is enough to apply for tag and insurance

They do not have the old car yet. They asked me to bring it down which triggered this whole question. I called the dealership this morning trying to get some clarity and the person who valued the trade and came up with the check deal wasn’t in. I told our salesperson I wasn’t going to drop off the car without fully understanding the deal and he said fine. As someone else said, it was a messy deal combined with two different people negotiating it so there is a lot of back and forth.

[purplepenguin7]

Jan 5, 2023 2:46:18 GMT -5 sonrisa said:

So is the $10K (1) the amount you are paying for the new car beyond the value of the trade in? (ie. they will be keeping that and the old car long term in payment for your new car) or (2) the value they are giving you for the old car that they are buying from you?

I understand it as the latter (#2). If so, they either get to physically have the old car and wait for title, or have the uncashed check and wait for you to bring in the old car and title, at which time they need to return the uncashed $10K check to you. Given that checks are now deposited electronically, right before handing over the car, I would verify with the bank that they did not deposit or cash the check - perhaps even going so far as to cancel it. The paper check itself is no longer evidence it wasn't cashed.

If it is the former, (#1), then I would give them the car and wait for title to arrive and then hand that over.

It is #2. $10k is the value on the trade. I am considering stopping payment on the check now just so it doesn’t get cashed by accident. Is there any way for them to find that out, aside from if they try and cash it?

[purplepenguin7]

Jan 5, 2023 7:45:50 GMT -5 Pilsy said:

Jan 4, 2023 13:16:30 GMT -5 ewall said:

From their perspective, they have money tied up in this deal until you can produce a title. They have essentially loaned you the $10k (or whatever they gave you on your trade that was applied to the deal) until you produce the title. So they are out those funds and they can’t sell your trade. I’m not saying they are right, but it’s a messy deal for sure. Also - do not cancel full insurance coverage on your trade until you hand over the vehicle and the title to them!

Valid point. I still don't like it, but I think ewall is right. Excellent advice re: insurance, too. 


Why am I so invested in this??  lol  

OP, congrats on the new wheels. I hope it's all sorted shortly. 

Thank you! And yes we have it fully insured right now. One of things I am trying to sort of with them is what happens if something happens to the car when it’s on their possession but I am still the title holder.

[Deleted]

I would abide by the written contract. If they only wrote to leave a check and then title and car would be given in 45 days and the check would be returned then do that. They wrote the contract. Too bad, so sad that they want more security. They can't even sell your car until they get the title BUT it's safer to hold the car (because you can put a stop on the check and they wouldn't know).

[dexteroni]

Even if this is technically correct, I wouldn't feel comfortable with a big check out there as part of a transaction I didn't understand. If you can do so now, I would just go to the dealership and ask for the check back and/or more information. If you can't go, then call back and ask to speak to a manager and get it straightened out. Even if the person who set it up was available, I would want someone else involved now.

FWIW when we bought our car, we forgot to bring the title for the trade in, and the dude at the dealership was like "no rush, whenever." When I brought it the next day he was like "wow that was fast." So I think they're used to not having the title right away, and even more so in a state where the process is slow.

[fiddles]

Jan 5, 2023 11:43:36 GMT -5 purplepenguin7 said:

Jan 5, 2023 7:45:50 GMT -5 Pilsy said:

Valid point. I still don't like it, but I think ewall is right. Excellent advice re: insurance, too. 


Why am I so invested in this??  lol  

OP, congrats on the new wheels. I hope it's all sorted shortly. 

Thank you! And yes we have it fully insured right now. One of things I am trying to sort of with them is what happens if something happens to the car when it’s on their possession but I am still the title holder.

Not sure if this is a mom and pop or a large dealership. We actually had this happen to us a few years ago. Traded in a car and 2 days later someone hit it on their parking lot and caused damage. The bill of sale we signed was fine. That showed the vehicle was no longer “ours” and we were not responsible for any damage. This was also on a vehicle we had paid off but I lost the title. The dealership handles all paperwork with getting a new title

[purplepenguin7]

In case anyone wants an update, I scheduled a meeting with both sales people I worked with on the deal for tomorrow but then I was given the physical copy of the title at the DMV today. So I will turn in the car and title tomorrow and take back my check and should be done with it.

[dexteroni]

Glad to hear it’ll be done sooner than you expected. Congrats on the new car! What kind did you buy?

[purplepenguin7]

dexteroni thank you! It’s a 2021 (preowned) Volvo XC40.