Trading In a Car Without a Title

As most auto dealers know, they cannot sell a vehicle without a title.  Auto dealers should also not take a trade-in without a blue title in the customer's name.  If the customer does not have the title, but the vehicle is subject to the lien, the lienholder, such a bank or credit union, may have the title in their possession.  Dealers should contact the lender to discuss payoff for title release if applicable.

So what do you do if your customer claims to have a “clean” title, but can't remember where it is or is lost or destroyed?  Be Careful!  You could ask that the customer go to the local DMV regional service center with a VTR 34, Application for a Certified Certificate of Copy of Title.  Also some local tax assessor or title deputies may process a replacement for title, but wait times may vary. 

However, losing a potential sale is not always practical.  If you are able to confirm the identity of the person and vehicle ownership, then there may be another option to accept a trade in without a title.  Some potential issues to be aware of:  Pending divorce or bankruptcy proceedings could really spell trouble for a dealer that accepts a trade in without a title.    

Texas Motor Vehicle Power of Attorney (Form VTR-271), also known as a “Power of Attorney To Transfer Motor Vehicle,” is the form a vehicle owner can use to grant authority to a dealer to perform certain administrative tasks with his or her vehicle. For instance, the dealer may transfer titles to a motor vehicle in Texas using the principal vehicle owner's name. This is a type of limited power of attorney that pertains to transferring title of motor vehicles only.

From the VTR-271: “This completed and signed form grants the grantee, with full power of substitution, full power and authority to perform every act necessary and proper to purchase, transfer, and assign the legal title to the motor vehicle described on behalf of the grantor. “Full power of substitution” means that whoever is given this power of attorney may delegate that power by putting another person in his or her place by a substitute power of attorney. This power of attorney cannot be used in a dealer transaction to complete a title assignment on a motor vehicle subject to federal odometer disclosure. Federal law specifies a motor vehicle is subject to odometer disclosure if it is self-propelled, less than 10 years old, and has a gross vehicle weight of 16,000 pounds or less.

In compliance with federal law, the secure Power of Attorney for Transfer of Ownership to a Motor Vehicle (Form VTR-271-A) must be used when use of a power of attorney is permitted by the applicable regulations for a vehicle subject to federal odometer disclosure. If a power of attorney is used to apply for title, initial registration, or a certified copy of title, the grantor (person signing this form) and the grantee (person signing the application) must include a photocopy of their photo identification as required by state law.”

(Remember that Form VTR-271-A is not available on the TxDMV's website and must be picked up a a DMV Service Center.)


By: camilo guerrero
On: 10/18/2019 01:47:58
i would run the mvr 1st either in house or go to dmv or your local tax office as you could be taking a forged title or even a bad dl or id or a title with remarks that will not be good.

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