In Tx., how long does a used car dealership have 2 xfer a title from previous owner (individual) to them?

Question

I bought a 2001 Xterra (put down $2000, financed the rest) from a dealership (A & M Motors). I have the bill of sale. Approximately 6 weeks later, car had been towed (no parking zone). I went to get it from tow lot and showed insurance, ID, bill of sale. I got the car out, but towing co. told me that car was in an individual's name (Mary Halliwell). This is not the dealership or auto dealer's name. Did dealership have a responsibility to transfer title to themselves (A & M Motors) from Mary Halliwell before selling me the car? Now, the car was in an accident and I don't know who is going to be compensated.....A & M (are they the lienholder?), Mary Halliwell (owner of vehicle per the title) or me (I have the bill of sale and I financed the car through A & M Motors). What is the law in Texas regarding transfer of title from person to dealership to person. Isn't there a legal time frame to transfer title at least from Mary to dealership? I am at my wit's end! Help!!!!

Answer 1

First off, let's talk about the sale. For legal purposes (assuming they did in-house financing), A&M is the lienholder on your vehicle. When you financed the car through A & M, I am assuming it was financed with them and not a bank, etc. In such case, they don't have to immediately do anything with the title, as long as it's signed to them from the previous owner (Mary). Mary left the picture when she signed over the title to A&M.

It's possible that they weren't going through the process of the actual title transfer until you paid off the car, which I believe they can legally do (consult your state DMV office to be sure). At any rate, it doesn't really matter anyway; they wouldn't be relinquishing the title until you either paid the car off or traded it off. If you pay the car off, they do the transfer, and then you get a new title in your name from the DMV. If you trade it off against a new car before it's paid off, then the payoff amount on the Xterra is figured into your new financing, and then A&M would be paid off and would send the title to them...you would never actually see it.

Now, as far as the accident goes...if you are insured, and the insurance policy is in your name, then the check would be made payable to you. You would then be responsible for using that money to repair the vehicle (unless you want to drive a damaged car around town). If the car is totaled, you would use the proceeds to pay off the car...and if the amount you get from the insurance company is less than what you owe on the car, then unfortunately you get to make up the difference...because you would still owe A&M the outstanding balance due as per your sales agreement.

Bottom line...Mary's out of the equation so she won't get the insurance money, and A&M isn't getting the insurance money, unless the car's totaled and you use it to pay them off.

I hope I explained this adequately.

Answer 2

I use to own a used cardealership in TX. If the car is a trade in the lot can not resale with out transfer of ownership.. If at a auction it (title) must be sign upon entrance to auction. the insurance money will go to whomever is the named insured holder but the person named on the title will be responsible person for damages, or whatever since they still own the car. Calling the tax office in the county in which the title is held and requesting information is the beginning. These office are usually where the circuit courts are as well if it is a small town.. give more information and I can help you further.

Answer 3

Texas, 10 days.