This could be perfectly legitimate. Find out what the rules are for the state in which you are buying, because not everywhere will you walk out with a title in your hand.
If I buy a car with a title from Oklahoma, the previous owner or dealer should have a title with a transfer signature, even if there is a lien to be cleared. But I have to use this, and bill of sale, to get a new title. I won't have a title until the state sends me one.
If I buy in Missouri, and there is a title lien, there lien holder has the title an neither dealer nor buyer is going to see the old title until the lien is cleared, which can take a couple weeks, then I take the old title and bill of sale to the tag office, fill out an application, and get a title from my own state, at least a couple more weeks.
If I buy in Michigan, my experience was that the dealer processes everything and the vehicle does not leave the lot without a title, which may show liens.
Just because someone else's experience differs from what you face, does not mean that the dealer is a fraud or the transaction is a scam. Because procedures differ everywhere, this is a poor place to seek legal advice.
