42 California AutoNation Dealerships Fined

Nearly four dozen California AutoNation dealerships are being fined a total of $650,000 for failing to give its customers their car titles on time. The fine was recently ordered by a judge in San Jose, California .

A press release shares details of an investigation by the Santa Clara County District Attorney’s Office that found that over the past five years, AutoNation had a pattern of transferring ownership of used cars to purchasers late. Until ownership is transferred, purchasers cannot resell, refinance, or use their vehicles as collateral for a loan.

The settlement includes $450,000 in civil penalties, $150,000 in investigative costs, and $50,000 to support statewide consumer protection efforts. The case was brought by the Santa Clara County District Attorney’s Office and five other California district attorney’s offices.

“People who buy cars with their hard-earned money rightfully expect to receive ownership on time,” District Attorney Jeff Rosen said. “Dealerships, especially large ones, need to meet their legal deadlines.”

In California, used car dealers must submit to the DMV an application to transfer registration to a buyer within 30 days of the date of sale. That same 30-day deadline applies to the certificate of ownership (“pink slip”).

As part of the settlement, the 42 AutoNation dealerships agreed to create and enforce policies to protect consumers so that they will receive registration and ownership paperwork in a timely manner. These include: placing a “stop” on the sale of used vehicles when they do not have title in hand or a clear path to getting it within 30 days; requiring that a smog check or VIN verification is performed prior to any sale; deferring sales commissions on the sale of any used cars that are not capable of timely transfer; having at least 10 employees at all times to process ownership transfers; and ensuring that a designated employee at the level of regional manager or higher is responsible for overall compliance.

The Santa Clara County District Attorney’s Office says the AutoNation dealerships cooperated with the investigation and quickly took steps to improve their compliance with the consumer protection laws brought to their attention by prosecutors.