There’s a nasty tug-of-war going on over used-car titles in Florida. It’s a story of crazy lawmakers, greedy dealers, and record profitsĀ — and all at the expense of the consumer.
Right now, itās boom times for auto dealers, with used car sales leading to record profits across the nation. But for many Floridians, the boom has been a bust: After buying their car, theyāve had to wait months for the dealership to fork over the title. Without the title, they havenāt been able to register or drive their new purchase.
This has become rampant because dealers have been reselling used vehicles without first possessing the title. The solution some lawmakers came up withĀ is to give dealers more time to transfer titles to owners, extending it from 30 days to 60 days. In reaction, state tax collectors, who register vehicles, and the Department of Highway Safety and Motor Vehicles warning the legislation could harm consumers.
āThey think theyāre fixing it,ā Pasco County Tax Collector Mike Fasano said. āTheyāre only going to make it worse.ā
The Department of Highway Safety and Motor Vehicles has levied tens of thousands of dollars in fines for making customers wait for their titles in the last few years. One Floridian waited 209 days ā nearly seven months ā last year for the online dealer Vroom to turn over the title to the 2017 Tesla the customer purchased, according to a complaint filed against the company.
Possessing a car, but not its title, can make it illegal to drive after the 30-day temporary tag expires. A reporter from WFLA-Channel 8 in TampaĀ documented a paramedic who had to rent a carĀ to get to work because the online dealer Carvana still hadnāt provided the title to the Nissan Sentra she bought eight months earlier.
Both Vroom and Carvana have hired lobbyists to advocate forĀ House Bill 1517, co-sponsored by state Rep. David Smith, R-Winter Springs, and Rep. Andrew Learned, D-Brandon. (Smith said Vroom and Carvana had nothing to do with his drafting of the bill, and he hasnāt spoken with their lobbyists or representatives. He noted the companies āare fully responsible and accountable for any past misdeeds.ā)
The bill, which passed its first committee unanimously Tuesday, would give dealers 60 days to turn over the title and extend a temporary tag to 60 days to match. They plan to amend the bill to have it expire on July 1, 2025.
The intent, Smith told lawmakers, was ājust giving a little bit of flexibilities to these dealers that have been, through no fault of their own, negatively impacted by COVID.ā
Smith said 90% of the titles are transferred within 30 days in Florida, but dealers are having problems with their finance companies. Dealers claim that this is the typical scenario:
So, here’s how it goes…Someone will sell or trade in their car to a dealership or online dealer, such as Carvana or Vroom.Ā If the seller doesnāt have a title ā say, because they still owe money on the car ā the dealer has to pay off the loan withĀ the finance company to obtain the title. The dealer will then list the car for sale while waiting for the finance company to send them the title, often through the mail. In the red-hot car market, those cars may sell before the dealer receives the title from the finance company. Please note that not all dealers do this.
“The problem has gotten worse — finance companies have been short-staffed during the pandemic and are requiring more time than usual to send the titles,” said Ted Smith, president of the Florida Automobile Dealers Association, which represents about 850 new-car dealers in Florida.
“Dealers donāt wait to receive the title before reselling the car for a simple reason: Customers donāt want to wait around that long,” he said.
āWe want to put people in cars. We want to get people titled right there at the desk if we can do that,ā Smith said. āThereās no reason at all for a dealer not to hand over the title and registration as quickly as possible.ā
Concerns about the bill
The Department of Highway Safety and Motor Vehicles has been reluctant to allow dealers more time to transfer a title. ItĀ said an earlier version of the House Bill 1517 āwould erode much-needed consumer protections.ā
The department still has concerns about the current form of the bill. The most common complaint Floridians have about dealers is when they donāt turn over titles within the required 30 days, said Department of Highway Safety and Motor Vehicles spokesperson Aaron Keller.
Last week, the department hit Vroom, an online-only used car dealership, with a $47,000 fine for not providing titles within 30 days.
A spokesperson for Vroom said it was ācommitted to continuing to work with customers and the Florida Department of Motor Vehicles to solve any issues Florida residents might have at any point in that process.ā
The state also took action last year against Carvana, a competing online-only used car dealership, which had nearly 400 titles not filed within 30 days. The action was dropped after the company reduced that number to 29, with 11 of those customers given buy-out offers. (The remaining 18 were not responsive or failed to provide paperwork.)
āThe department believes Carvanaās change in customer service delivery and business practices, including no longer selling vehicles until the vehicleās title is in your possession, will reduce similar issues moving forward,ā the departmentās director wrote to the companyās director of governmental affairs on Feb. 1.
Fasano, the Pasco tax collector, said other companies should also not sell vehicles until they have the title. Giving dealers more time to transfer the title will give them another deadline to miss, and could complicate the situation for customers.
āItās just baffling to me that anyone is selling a vehicle you donāt have the title to,ā Fasano said. āYou canāt do that in a private sale. Youād get arrested if you did that. Itās called fraud.ā
The sponsor ofĀ the Senate bill, Sen. Tom Wright, R-New Smyrna Beach, rejected that idea.
āSo then they have that inventory sitting,ā Wright said of the dealers. āWhy not require the lenders to release the lien on time? Thatās the problem.ā