Chapter 12, Section G:
Dealer Titles with Wrong Title

December 8, 2011

A Dealership Titles a Vehicle with the Wrong Title (You did what?!)

Note: Though this problem is a more common with vehicle dealers, everything in this section applies equally, when a boat dealer makes the same mistake, to vessels and their titles and hull identification numbers (HINs).

It is not uncommon for a dealership that is handling the title transaction for a used vehicle to mistakenly submit the wrong title, i.e. the title for a different vehicle, with a different VIN.

The result is that the customer (buyer) gets a title for the wrong vehicle with the wrong VIN. In some cases the title (and VIN) will be for a vehicle that the dealer has already sold to a different customer.

Dealers handle a huge amount of paperwork. Sometimes (sadly, but understandably) the paperwork gets mixed up. This is one of those situations. Fortunately, we can fix it.

How to Fix It

The dealership needs to re-register the correct vehicle with the correct title and VIN to the correct customer, as follows:

  • The dealer must provide all original documents and must pay all fees (including any late fees for time elapsed from the original date of sale) to get the title and registration issued correctly to the owner with the incorrect title.
  • If there is a lien on the vehicle, a release of lien must be provided.
  • The dealer must also provide:

    - duplicate title application in the name of the previous owner
    - power of attorney from the previous owner
    - copy of the previous owner’s driver’s license
    - copy of the previous owner’s title.

    If the title is from another state, the dealer will have to go to the other state to get a duplicate title from that state.
  • MVD will cancel the incorrect title.
  • The dealer then needs to request a refund, in the name of the dealership, on the incorrectly issued title. The original title (issued in error) must be attached to the request for refund. A copy is not acceptable.
  • MVD (Field Operations) can then reactivate the VIN number.
  • The issuing office should process the title as a first time out-of-state title, using the correct state and title number.
  • After the title is processed, the dealership needs to verify that the VIN is correct.

This is a costly and lengthy process for dealers which is why it is imperative that they always be careful to use the correct titles when titling vehicles and vessels.

MVD field offices and title service companies should not attempt this process by themselves, but should contact Vehicle Services in Santa Fe for guidance and assistance as soon as it becomes apparent that a dealer has titled a vehicle or vessel with the wrong title.