Accident or Theft before Title Transfer
TIADA has consistently advised dealers that they must transfer title to vehicles within 30 days of a sale (45 days for BHPH dealers). If the title is not transferred by the deadline, then the dealer's other option is to unwind the deal. As my predecessor Danny was fond of saying, either transfer or unwind. There is no try. There are some situations in which a dealer need not transfer title within those timeframes. Most Texas dealers are familiar with the exceptions for exports, out-of-state sales, and vehicles with a gross weight over 11,000 pounds. However, there are two more exceptions dealers should be aware of.
Vehicle Totaled in an Accident
If a vehicle is in an accident and is declared a total loss, then the dealer should apply for Title Only on behalf of the customer. VTR Form 130-U has an option for “title only” application. Check this box, follow the remaining instructions on the form, and submit Form 130-U to the tax office. The insurance company will need the Title Only in order to pay the claim.
If the dealer charged the customer for registration that was not issued, then the dealer will need to refund that fee.
If a vehicle is stolen before a dealer transfers the title to the customer, then the dealer will apply for Title Only, just as they would in the case of a totaled vehicle. Here, the customer will need to report the vehicle as stolen, then give a copy of the written report to the dealer. The dealer will take the copy of the police report to the tax office and include it with the VTR Form 130-U. The dealer will check the box for “Title Only” application.