Many have wondered how a licensed auto dealer can sell a vehicle when they do not have a valid title in their possession. This puzzling question can be explained by the provisions of N.J.S.A. 39:10-9. Dealers often come into possession of used motor vehicles when a customer trades in a vehicle towards a new purchase or if they purchase a used vehicle from another dealer.

Dealers are often faced with situations where the title is not readily available for transfer for any number of reasons. In this situation, the law provides that if the purchaser of a vehicle is a licensed New Jersey motor vehicle dealer, the seller may execute a secure power of attorney (POA) or a document required by the New Jersey Motor Vehicle Commission (NJMVC), authorizing the licensed dealer to execute the original title when they have it in their possession. If the original title is never received or is lost, the dealer will be able to use the POA to apply for a duplicate title.

The law gives New Jersey licensed motor vehicle dealers special authorization to sell used vehicles before the title has been transferred into the dealership’s name. N.J.S.A. 39:10-9 provides that “if the seller is a licensed New Jersey motor vehicle dealer, the seller shall not be required to deliver an assignment or certificate of ownership at the time of sale, provided that the dealer has satisfied all liens noted on the certificate of title and has the right to title as of the time of sale, and provided that the dealer represents and attests to the same in a writing to be delivered to the purchaser at the time of sale.”

The law requires the dealership provides a customer with a written document, notifying them they have the right to title the vehicle and that all liens have been paid. NJ CAR created the Dealer Representation of Title & Lien Satisfaction Form to comply with the requirements of N.J.S.A. 39:10-9. The entire form must be filled out and signed by the dealership and customer, with a copy provided to the customer.

There are many challenges when selling vehicles that the dealership only has a right to tile with no title in hand. There are a wide array of things that can happen after a customer trades in their vehicle and the dealership is waiting to get title into its name. These challenges can create significant delay for customers and headaches for dealerships.

The Dealer Representation of Title & Lien Satisfaction Form (SKU: 222) can be ordered by calling NJ CAR Services, Inc. at 609.883.5056, x402 or visiting the NJ CAR Services website (https://njcarservices.com/).