Sacramento Area Local News

SACRAMENTO (CBS13) ― Our Investigation reveals thousands of Californians may not own the cars they're driving because dealerships aren't doing what they promised. Buyers who are making payments on their newly purchased cars are being told their vehicles could be reposessed at any time. People who traded in their cars are being told the dealership never paid off their loans, as promised.

When Jason Conant traded in his old truck for this one at Carmean Dodge in Shingle Springs last year, the dealership promised to pay off the $11,800.00 loan on his old truck. But nine months later his credit is ruined and he's getting calls from collections.

"Saying that the old loan hadn't been paid off and I was not making my payments," Jason was told.

It turns out Carmean Dodge shut down before paying off Jason's loan. He's now on the hook for both trucks. His bank wants $360.00 a month for a truck he doesn't even have anymore.

"I really feel mislead," Jason told CBS13. "I feel left out in the dark."

So where is Jason's old truck now? We found it, up for sale on a used car lot on Auburn Blvd. In Sacramento. How could that be? After all, Jason's bank won't hand over the title, that pink piece of paper showing who owns the vehicle, until they are paid off.

According to Consumer Advocate Rosemary Shahan, "the dealers are cheating, and promising to pay off the loan. Then they don't."

She says dealers across the California are skipping out on paying off trade-ins, then closing their doors. I asked her how many people are affected by this.

"It's thousands of people."

"Is it legal for these dealers to be selling cars without a pink slip in hand?" I asked.

"They can sell the car before they get the pink slip," Shahan said.

It's true, a dealership has 30-days to produce the title, but a lot can happen in those 30-days. We've learned Jason's truck has changed hands four times. But that pink slip hasn't moved once. Jason traded the truck in to Carmean Dodge, who sold it to a local auction house. Then that auction house sold it to the dealership on Auburn Blvd, where we found it, ready to be sold again.

The dealer told us he was within the 30-day period waiting for the pink slip from the auction house where he bought it. We know he may never get it, because Carmean Dodge never did pay off Jason's loan.

Shahan says, "Peoples lives are being destroyed by this."

Just ask Moriah and John Plato. They're on the other end of this problem.

"It's frustrating, very frustrating," Moriah told CBS13.

They bought their 2003 Hyundai 2-years ago from Warren's Discount Auto Sales, also on Auburn Blvd. in Sacramento. That dealership closed before handing over the car's title, and without it, Moriah says they can't register their car.

"So we're stuck with that $400.00 car payment and no registration and no way to refinance or trade it in."

To top it off, their car could be repossessed at any time, because the dealer that sold it to them never paid off the previous owner's loan, never obtaining the actual title.

So how could California, the state you live in allow you to be left holding the bag? We found somebody at the State Capitol shaking her head asking that same question.

"I was shocked to come to understand that this could happen under our system of law." Senator Ellen Corbett of San Leandro wants to change the law.

"So under your bill, if a dealer does not have a pink slip in their hand, they cannot sell the car?" I asked.

"That's right, it they haven't actually transferred the title they can't go ahead and sell it to another person."

"Seems like common sense to you?"

"Of course if does."

In addition, if a dealer doesn't follow the rules, her bill allows customers to personally sue the owner of the dealership, even if they go out of business. Under the current law, you can't. Moriah has a strong opinion regarding who is responsible.

"I really think that it's the owner of Warren's Discount Auto's responsibility. I honestly believe that we should be able to go after him," Moriah Plato told CBS13.

Corbett's bill comes too late for the Plato's and Conant. Jason tells us:

"It really makes you wonder about walking in to somewhere and just dropping off your vehicle and driving off with a new one."

Until there's a change in the law, it's up to anyone trading in, or buying a car from a dealer to protect themselves. Kurtis asked Rosemary about that.

"Walk in there and say I am not buying this car until I see that pink slip?" I asked.

"That's right."

People stuck in this situation can access bond money, meant to help consumers stuck in this situation.   You can find out the dealers bond company through the DMV.   The problem is only $50,000 is available for each dealership and when the money is gone, it's gone.    Corbett's bill would increase the bond money required to $250,000 for large Dealerships and to $100,000 for independent lots.    In this economic climate, the bill is expected to face opposition from struggling car dealers who say this added expense could put them under.

Remember Jason's old truck?   His bank finally found it, and repossessed it because Carmean Dodge never paid it off.    Jason now has a "vehicle repo" on his credit report.  We worked with the DMV and helped get the Plato's a temporary registration on their car, but it expires this month, and they still have no title. 

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