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Auto Court: Ownership Transfer
I spend a good amount of time in court as an expert witness in classic car matters and I’m hoping to pass along to you some of the things that I’ve observed and learned.
The internet has revolutionized the world in many ways, including the purchase and sale of classic cars to and from virtually anywhere in the world. Today, a buyer can search the entire world for a classic car with a few clicks of a button. Thanks to the internet, hundreds, if not thousands of classic cars are bought and sold on-line every day. Great care is often exercised in safeguarding ones money and assuring safe delivery of the car, but rarely is much thought given to the nuances of ownership transfer between two different states.
As most of us are aware, each state has its own Motor Vehicle Department (NY), Registry of Motor Vehicles (MA), Motor Vehicle Administration (MD), Department of Safety (NH), Motor Vehicle Commission (NJ), Department of Driver Services (GA), Department of Highway Safety (FL), Department of Justice (MT) and on and on. The states cannot even agree on a common name, let alone the requirements for transfer of ownership.
I was recently involved in a case in which someone from New York purchased a 1955 Buick convertible from someone in Arizona who had purchased it from someone in California who had purchased it from someone in Oregon.
The sequence of events is much too convoluted to go into in detail, but suffice it to say that the car had passed through several owners who never bothered to title the car, so the title was still in the name of the seller in Oregon. Each subsequent owner had simply passed along the Oregon title in order to transfer ownership, which is somewhat of a common, if not risky practice.
If you think this was complicated before, make sure you pay attention now. The owner from New York attempted to register the car only to be told that the title was not valid because it had been signed over from the seller in Oregon to the buyer in California, so the title was only valid for the person in California that was named as the buyer on the title.
Understandably distressed, he called the seller in Arizona who sent him a Bill of Sale for the car. Once again the New York owner attempted to register the Buick only to be told that the title was in one persons name from Oregon and the Bill of Sale was in another person’s name from Arizona. Now he was at a loss as to what to do. He couldn’t register the car.
The subsequent sequence of events is less important than the lesson. Some states use titles to transfer ownership. Others use “transferable registrations,” while other use a combination Registration/Bill of Sale. Some even allow a simple handwritten Bill of Sale to transfer ownership, although I believe Vermont is the last state to allow this. Some states title all cars no matter when they were built or sold, while others only title cars that were built after a certain date (such as New York).
The lesson here is to be certain that a seller has documentation that will be recognized and accepted by your state as proof of ownership for transfer purposes. Otherwise you may end up with the most beautiful car that you can never drive.