New owner with big problem

Deb and Ed M wrote:


As a small used-car dealer: we have a large bank that we've done business with several times (customers obtained car loans through them). We are expected to make out all the State's paperwork issuing the title to the customer (and listing the bank as a lienholder), give the customer the car - and then we get to wait approximately TWO WEEKS for a check to arrive paying for the vehicle. It's "just the way they choose to do business".

So I can see where the RV went home before financing was completed?

It is your choice to deliver on the basis of those terms. If something should get sideways, however, the bank will not cut you a check *AND* you no longer have possession of your collateral. Being in the business for 58 years, I can tell you, without question, that no money/no collateral is not a solid position to be in. If you have your inventory on a floor plan and the bank decides to come audit you, they better find all your floored units present on the lot.

Any time financing is involved, I always make the customers sign a one-pay as part of the closing documents. That is my legal guarantee that should the original financing go south, I become the defacto lienholder and anticipate the single payment of the entire balance to be tendered per the terms of the contract, nominally 7 days. That gives the buyer a week to get their money lined up and in my office in the event that their original financing does not work out. If (when?) that does not occur, then I have legal right of repossession. Without that, your rights are significantly limited.

In the case illustrated here, the buyer did not have a legal obligation to surrender the unit to the sellers representative. He could have chosen not to. If that happened, the sellers only recourse would be to file a lawsuit ($$$$$).

Dealers have to protect themselves as well.