By: Young Walgenkim
On July 15, 2019, Governor Brown signed into law a bill that will greatly benefit consumers in Oregon. SB 113 is a bill intended to help Oregonians get title to the vehicles they purchased from car dealers. Yes, you read that correctly. Currently, Oregonians are purchasing vehicles from dealers and they are not receiving titles to the vehicles they purchased.
How does this happen?
In Oregon, when a dealer sells a vehicle to a consumer, the dealer typically does not have the title because the dealer purchased the vehicle on credit. After the sale to the consumer, the dealer is required to take the proceeds from the sale, pay off the lien on the vehicle to receive title, and submit the title transfer documents to the DMV all within 30 days of the sale.[1] However, dealers often fail to pay off the vehicle or otherwise transfer the title within the deadline dictated by the vehicle code. Sometimes, if the dealer goes out of business or is otherwise running a scam, consumers never receive their title. Some examples from the past news include Northwest RV Sales in Salem and Jones 5 Auto Sales in Corvallis.
Yes, but is this really a problem in Oregon?
Oregon DMV regulates vehicle dealers for violations of the vehicle code, which includes many different aspects of the dealer’s business. In its quarterly periodical, the DMV publishes a list of dealers who have been sanctioned for violations of the vehicle code, which can be accessed online. Tracking the data back to 2011, there have been an average of about 750 dealer sanctions per year, and about half of those are due to failure to process title on time. This is clearly a serious problem, and there are real victims to this practice. Several individuals came forward to testify at legislative hearings in 2017 as victims of this practice. One woman testified that she purchased a car, paid the entire amount but did not receive her title for two years.
But why can’t the DMV issue new title?
When these consumers find out that the dealer will not help them, the first thing they do is to contact the DMV. The victims at the hearing all testified that they called the DMV and asked them to issue new titles. They were all told that DMV could not do that and they need to hire an attorney to file an action in court to receive a court order before a new title would be issued. This means the consumer will have to pay out of pocket to hire an attorney to get them the title to the vehicle they already paid for. Clearly, something is not right with this situation.
How does SB 113 help?
SB 113 bridges this gap by allowing the victims to receive their attorney fees from the dealer or the dealer’s bond. The dealer had a duty to process the title, and its failure to process the title is already a violation of Oregon’s vehicle code. The consumer currently has a private right of action to get their remedy in court, but they rarely do so because they often don’t have the money to hire an attorney to get the title for the vehicle they already paid for. With the enactment of SB 113, Oregonians can finally receive title to the vehicles they purchased.
[1] If the dealer cannot meet the 30 day deadline, it can request an extension up to 90 days.