Car Title Delay Scam: How It Works
This scam occurs when the dealer delays paying off your car because of their floor plan. A floor plan is a credit line for dealerships to buy vehicles. It allows them to go to auctions and buy their inventory without paying for it up front.
This is obviously very handy for small dealerships that do not have enough money to pay for their cars. The lender receives interest payments from the dealer for their inventory, and are paid when the car is sold.Most dealers don’t want to keep hundreds of cars on their lots without a floor plan since they have to pay a commission every time they sell a vehicle. So, if it is a bad month, the dealership will delay the clients’ paperwork in order to manage their numbers and not have to pay the lender.
This means you have just bought a beautiful car and think everything has gone smoothly, but the dealer might have delayed the registration of your new car while they still have the loan from your bank.
Car Title Delay Scam: How To Avoid
This scam does not happen very often as the dealership could lose their floor plan forever and be out of business, but it does still occasionally occur. The worst case scenario would be if you had an accident while your car is not registered to you as you would not be eligible for your insurance, even if it was not your fault.
Make a phone call the day after buying the car to check with the dealer, just to let them know you are on the ball.
Car Title Delay Scam: How To Report
Let your family and friends know about the Car Title Delay Scam by sharing it on social media here, using the buttons provided. You can also officially report the scammers and questionable dealers to the Federal Trade Commission using the link below:Report To The FTC Here
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