Yes, it’s unfair. And yes it’s crazy. Especially now, when California Governor Gavin Newsom and his administration are working hard to protect consumers from debt collectors during the pandemic, to mitigate the economic fallout.
But if you buy a used car in California, the California Department of Motor Vehicles can sock you with having to pay for past-due registration fees and penalties owed by the former owner.
Imagine the shock car buyers feel when they buy a used car, only to find out later that it comes with an unwanted accessory — a boatload of bad debt.
This happens even to consumers who shop at auto dealerships. And there’s no limit on how much extra you can be charged. An overdue registration can cost you $300, $1000 or more in hidden, unexpected fees and penalties.
California law allows the DMV to impose a lien on the registration, until it is paid in full. It’s illegal to drive a car with expired license tags or registration. So if you refuse to pay, or can’t afford the unexpected expense, you can lose your car. The California Highway Patrol can pull you over, issue a “fix-it” ticket that you can’t afford to fix, or impound your car. If you aren’t the registered owner, you can’t get your car out of impound, even if you scrape together the cash to pay the hefty towing and impound fees.
Glenn Harris, a U.S. Army veteran and devoted family man with a wife and three children, testified before the Senate Committee on the Judiciary and described their ordeal:
“While I was driving to work recently, the CHP pulled me over. They noticed that I was driving with a temporary sticker that had expired, and my car was impounded. The CHP also said there was over a year of back fees owed to DMV that Express Auto Sales never paid.
They said we had to pay the DMV those extra fees, from before we even bought the car, before it could be registered in our names. We can’t afford to pay DMV those unexpected fees, that were not disclosed when we bought the car, on top of what we’re already paying the bank.
I can’t afford to pay the hefty impound fees, which are hundreds of dollars. I also can’t get the car out of impound because I am not the registered owner. Even if I got the car out of impound, I couldn’t afford to get it registered, so I may get pulled over and ticketed again.”
What will it take for the California DMV and lawmakers to end this grossly unfair practice, which can ruin the lives of innocent used car buyers who have done nothing wrong? All they did was to buy a car from a licensed dealership.
How many Californians have already been made homeless because the DMV and law enforcement agencies seized their vehicles — often their only means of transportation to get to work or school, buy groceries and access medical care and other necessities of life?
Read more: California Vehicle Code Section 9562. (a) When a transferee or purchaser of a vehicle applies for transfer of registration, as provided in Section 5902, and it is determined by the department that registration penalties accrued prior to the purchase of the vehicle, and that the transferee or purchaser was not cognizant of the nonpayment of the fees for registration for the current or prior registration years, the department may [or may not] waive the registration penalties upon payment of the fees for registration due.
This means that the DMV might choose to waive the penalties, but not the past-due registration fees, even if the consumer can somehow convince the DMV that they are totally innocent and were unaware of the prior owner’s debt.