AutoNation to Pay $650,000 Over Slow Title Transfers

The parent company of a network of auto dealerships that sells used vehicles agreed to a six-figure civil settlement with three Bay Area and three Southern California counties this week to resolve allegations it was slow to transfer ownership titles.

AutoNation, which owns 42 dealerships around the state, agreed to implement practices to comply with the state’s 30-day deadline to transfer vehicle titles, which it had allegedly failed to do. The settlement did not include an admission of liability.

The suit was brought in Santa Clara County Superior Court by the district attorneys of the counties of Santa Clara, San Francisco and Sonoma. The counties of Los Angeles, Ventura and Riverside also signed onto the suit.

“People who buy cars with their hard-earned money rightfully expect to receive ownership on time,” Santa Clara County District Attorney Jeff Rosen said in a press release.

“Dealerships, especially large ones, need to meet their legal deadlines,” he said.

Delays in transferring the ownership titles, known in the state as pink slips, allegedly impacted customers who bought vehicles from AutoNation dealerships by denying them the ability to resell or refinance their vehicles, or use them as collateral for loans in a timely manner.

In an emailed statement, the company attributed the title transfer delays at least partially to what it said were disruptions caused by the COVID-19 pandemic.

“Customer service, including timely registration and title processing, is a top priority at every AutoNation dealership. While we regret any delay, many of these delays occurred as a result of COVID-19 pandemic challenges or for other reasons outside a dealership’s control,” an AutoNation spokesperson said.

The company agreed to pay $650,000 in the civil agreement. That figure included $450,000 in civil penalties, $150,000 for the counties to recoup investigative costs, and another $50,000 to fund future consumer protection actions in the state.

“The AutoNation dealerships cooperated with the district attorneys’ investigation and quickly took steps to improve their compliance with consumer protection laws,” said a press release from San Francisco DA Brooke Jenkins’ office.

The company agreed to implement several controls and practices to ensure it was following timely title transfers in future, including having at least 10 employees available to process ownership transfers, and establishing regional managers as responsible for compliance issues.

It also agreed to put “stops” on sales of vehicles for which the dealerships did not already possess the title or have a clear path to obtain it within 30 days. The company also will perform smog checks or Vehicle Identification Number (VIN) verifications as needed. Finally, it agreed to defer sales commissions for vehicle transfers that cannot be completed within 30 days.

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