| For
immediate release -- Thursday, July 30, 1998. |
Miller: Used Car Buyers Gain Car Titles and Refunds
DES MOINES -- When the Ankeny Motors used car dealership went out of business last year it raised a crucial question for nineteen car buyers: Who had rights to the car titles -- the consumers, or four lending companies that had financed the vehicles for the dealership and still held the titles?Citing Iowa law, the Attorney General's Office successfully fought to obtain the car titles for the consumers, as well as refunds for other customers. The case wrapped up this week.
"We argued that Iowa law is clear," said Attorney General Tom Miller. "If a car dealership goes out of business, car buyers have legal right to the titles for cars they purchased from the dealership. Finance companies that provide loans to dealers have other options, but they must turn over the titles to the car buyers, and they cannot attempt to repossess the cars."
Ankeny Motors, the used car dealership, closed its doors August 1, 1997, leaving many customers who bought cars in the preceding weeks without titles -- and legally unable to drive the vehicles. The titles were held by four different lenders (called "floorplanners") that were unwilling to relinquish the titles because they had not been repaid for loans they provided to the dealership.
In the succeeding months, with cooperation from the Iowa DOT, Miller's Consumer Protection Division ultimately was able to win release of all nineteen titles, citing Iowa law and the fact that the lenders had to seek any remedies with Ankeny Motors.
In a related matter concluded this week, Miller said his office also obtained over $9,000 in refunds for 28 separate car buyers who had paid Ankeny Motors for government-required fees -- fees the dealership had failed to pay to the State. The funds, averaging $334 per consumer, were paid from Ankeny Motors' dealer bond held by Merchants Bonding Company of Des Moines.
"Except for the refund, these consumers would have had to pay twice for the fees such as use taxes and title and license fees," Miller said. The Attorney General credited the bonding company for its cooperation and said his office will contact the consumers this week. He said the refunds will be issued soon from the State to consumers who sign an agreement to release and assign their claims against the dealership to Merchants Bonding.
"We are very pleased to obtain both the titles and refunds for consumers," Miller said. "When you buy a car, you should be able to legally drive it in Iowa, regardless of whether the dealership goes out of business. We were pleased to be able to get the buyers on the road and make sure they didn't have to pay twice for taxes and fees."
Miller urged any car buyers similarly affected by the closing of a car dealership to contact his Consumer Protection Division at 515-281-5926.