What to Do If You Buy a Vehicle From a Dealer Going Out of Business: A Step-by-Step Guide

Buying a vehicle is a significant investment, and dealing with a dealership that’s going out of business can add an unexpected layer of complexity to the process. If you find yourself in this situation, don't panic. Here's a step-by-step guide to help you navigate the process smoothly.

Step 1: Stay Calm and Gather Your Documents

The first thing to do is to stay calm. It can be stressful to learn that the dealer you purchased your vehicle from is going out of business, but having all the necessary documents in order will make the process much easier.

• Sales Contract: Ensure you have a copy of the sales contract. This document is crucial as it proves the purchase and outlines the terms of your agreement with the dealer.

• Proof of Payment: Gather any receipts or proof of payment, whether it’s a bank statement, credit card receipt, or a cancelled check.

• Manufacturer’s Certificate of Origin (MCO): If it’s a new vehicle, try to obtain the Manufacturer’s Certificate of Origin. This document is essential for registering the vehicle.

• Other Correspondence: Any letters or emails from the dealer, especially if they mention the dealership’s closure, can be helpful.

Did the dealership you purchased your car from close down before you completed the registration process?

• Yes
• No

Step 2: Contact the DMV

Once you have gathered your documents, your next step is to contact your local Department of Motor Vehicles (DMV). Explain the situation clearly: that you purchased a vehicle from a dealer who is now out of business, and you need assistance with the registration process.

Step 3: DMV Investigator/Inspector Involvement for a Dealer Going Out of Business

When a dealer goes out of business, a DMV investigator or inspector typically steps in to handle any pending applications. They will collect all available registration documents from the dealer and forward them, along with any relevant information, to the DMV.

If the DMV investigator has the necessary documents for your vehicle, they will process them accordingly. However, if the documents are incomplete or missing, you will need to take additional steps.

Step 4: Complete the Required Forms

Depending on whether your vehicle is new, used, or a nonresident vehicle, you will need to complete specific forms:

• New Vehicle: Fill out the Application for Title or Registration (REG 343) form. This form can be obtained from the DMV’s website or your local DMV office.

• Used Vehicle: Submit the usual transfer requirements, which include the title (signed by the seller), a bill of sale, and a smog certification if applicable.

• Nonresident Vehicle: Submit the nonresident vehicle registration requirements, which typically include the out-of-state title, a verification of vehicle (REG 31) form, and possibly a smog certification.

Step 5: Attach Supporting Documents

To ensure your application is complete, you need to attach several supporting documents:

• Sales Contract: Attach a copy of the sales contract to your application. This proves the transaction and provides the necessary details about the vehicle and the sale.

• Investigations Letter: If you received a letter from the DMV Investigations Division, include a copy with your application. This letter indicates that the DMV is aware of the dealer’s closure and is handling your case.

• Replacement MCO or Motor Vehicle Bond: For new vehicles, a replacement Manufacturer’s Certificate of Origin can be accepted. If you cannot obtain the proper ownership documents for used or nonresident vehicles, you might need to provide a motor vehicle bond.

Step 6: Understanding the Motor Vehicle Ownership Surety Bond

If you are unable to obtain the necessary ownership documents, you may be required to submit a Motor Vehicle Ownership Surety Bond. This bond serves as a financial guarantee that you are the rightful owner of the vehicle and protects the DMV against any potential ownership disputes.

Step 7: Submit Your Application

After completing all the required forms and attaching the necessary documents, submit your application to the DMV. It’s a good idea to make copies of everything for your records before submission.

Step 8: Follow Up With the DMV

Once your application is submitted, follow up with the DMV to ensure everything is processed correctly. Keep track of any correspondence or additional requests for information from the DMV. Be patient, as the processing time may vary depending on the complexity of your case and the DMV’s workload.

Step 9: Obtain Your Title and Registration

After the DMV has processed your application, you will receive your vehicle’s title and registration. This completes the process, and you can now legally drive your vehicle with confidence.

Step 10: Seek Professional Assistance If Needed

If you encounter difficulties or feel overwhelmed at any point during the process, consider seeking help from a professional. Vehicle registration services, attorneys specializing in automotive law, or even contacting the DMV for guidance can provide valuable assistance.

Conclusion

Dealing with the closure of a vehicle dealership can be daunting, but by following these steps, you can navigate the process efficiently. Stay organized, gather all necessary documents, and communicate clearly with the DMV. With patience and persistence, you will be able to complete the registration process and enjoy your new vehicle.

Remember, you are not alone in this situation. The DMV and other professionals are there to assist you, ensuring that you can get your vehicle registered and, on the road, legally. Happy driving!

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