Took Vehicle In On Trade, Paid Outstanding Balance, When Should I Expect the Title?

Let's see if we can sort out what seems like an easy question in this week's blog.

Let's see if we can sort out what seems like an easy question in this week's blog. First we need to look at the Texas Transportation Code Section 501.115, this section attempts to answer the question related to the discharge of a lien. In doing so, the transportation code points to the Texas Finance Code Section 348.408, which addresses an outstanding balance payed in full. So, can we find our answer there? We'll see. 

After a dealer takes a vehicle in on trade the dealer has 25 days to pay the outstanding balance. This is triggered by two events, the motor vehicle is delivered, and the dealer taking the vehicle in on trade receives the required documents to transfer the title.

Once the dealer who took the vehicle in on trade has paid the lienholder off in full the clock starts ticking. The lienholder should release the line not later than the 10th day after the lien is satisfied. The code actually says, “If the retail buyer or the buyer's designee tenders to the holder as payment in full an amount derived from that outstanding balance information, the holder shall… release the holder's lien against the motor vehicle within a reasonable time not later than the 10th day after the date on which the amount is tendered.” We will tackle the term “within a reasonable time” in another blog on another day.

Finally, an answer! TxDMV interprets all this to say that a lienholder has ten (10) days from receipt of final payment to deliver the certificate of title to the owner. 

But what if the lien holder doesn't release the lien or deliver the title? The association encourages dealers to work diligently with lienholders and try to address the issue professionally. If you feel you have exhausted all your options, you can always contact the TxDMV enforcement department.


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