Buying a new car but dealer might not have the title

[Lel]

Okay, please bear with me here, it's been ages since I bought a car of any kind.  I don't know if this is an issue.

I'm planning on buying a new car for my wife.  We have chosen a make, model, and options packages, including the color.  The dealer that we're working doesn't have the color that we want, but he says that with a $500 deposit he can get the car from another dealership.

Once the dealer gives us a firm price on the car, we think we'll give him the deposit (refundable, of course), to get our car of choice on the lot.

However, I suspect that when it comes time to finalize the transaction, the dealer won't actually have the title to the car.  It might still be with the dealer from whom they get the car.

Is this a concern? 

We did look into buying our desired car from another dealer, but there is none in our immediate area (going out 50 miles) that has the color that we want. 

[codedoctor]

This swapping between dealers is done all the time, it won't be a problem.

I bought two cars this way. The first time dealer "B" got it from dealer "A" with whom I'd been working; it was a surprise to me. Second time, dealer "A" did not want to move off the sticker price; dealer "B" had a good price and obtained the car from dealer "A"....dealer "A"'s loss.

[Watchmann]

Actually, there is no title as commonly thought of on a new car.  One is generated when it is sold to the first owner.  Dealers move and swap new cars all the time and this is not a problem.  I bought my car from a TX dealer who had sourced the car from a dealer in CO.  Other than having the Monroney (MSRP) sticker on the window which showed the Colorado Springs, CO dealer as the original destination there was no indication in any of the paperwork I signed about the origin of the car.  As a new, untitled car it was a non issue.  You have nothing to worry about.

One issue to be aware of is the holdback (a couple of percent) that the dealer gets from the manufacturer for selling the car usually stays with the initial dealer.  What this means to you is that the price may not be quite as good on a car brought in from another dealer.  If you have negotiated well it won't be that big a deal, but it is an issue to be aware of.

Message Edited by Watchmann on 08-03-2009 10:06 PM

[Lel]

Thanks, folks, for your feedback.  I've heard of title issues with used cars, and I wasn't certain if it applied to new cars.

[Anonymous]

A new car does not have a title. It has a MSO. 99% of the time dealer trades concering the MSO are a non issue. For the other 1%? Thats why you have a 30 day tag so that the dealership can get a dupe MSO if they have to and iron out any problems. 

Dealerships in General Swap/Buy each other's inventory all the time. It is impossible for a dealarship to keep every possible combination in stock.

In reality Most dealerships have what they assume will sell in that area both historically and based on the lifestyle makeup of the area the dealership is at. (with the exceptions of force outs from the manufacturer). A dealership in a rich middle to upper class area may have more mid to high trimlevel vehicles where a more lower economic area may have less expensive models

FYI-

The cars on a dealers lot are owned by the individual dealership. There is no Mandate that a dealership has to give it's inventory to another store. There is no Franchise mandate that forces the transfer.

When a Dealership is negotiating  a Dealer trade, the dealer that has the product may:

1. Not want  to sell the vehicle at any price
2. Not want to sell the vehicle at terms that the inquiring dealership can make a profit if they finish the deal. They can demand MSRP.
3. Not be able to be reached to get a decision. There is no BAT PHONE that a Sales manager in Cleveland can call a place in Michigan at 6:00 PM on a Saturday and get someone to stop what they are doing and negotiate that trade right now.
4. Not want to do business with that dealership due to non business reasons
5. Not want to do business based on past business issues. (Some places are blacklisted between dealerships as for not working with them in the past-ie: you wont give us that car fine we won't give yo one when you call us, or every vehicle we get from you is missing something)
6. Have applied aftermarket to the vehicle that will increase vehicle costs/change the configuration of the vehicle to make the customer not want it/or pay that. INVARIABLY there is NO way out of this. Why? Simple even if they remove the item, they have some costs that were in the labor to apply and then remove the item. If the Dealership does not pass this actual cost to the dealership that wants the car, the dealership will take a loss on those costs Case in point: Dealership applied a Bedliner to the truck, their cost for the bedliner is XX there cost for the labor to install is a flat YY. Removal and installation cost 2YY. Someone has to pay that money and the Dealership is going to charge the inquiring dealership to recoup their costs- i mean they are not a charity, so that wuill get passed to the buyer. Or the buying dealership eats it. In many cases it costs just as much to remove it as to keep it on.

FFYI-

A dealer trade has to make sense for the dealership as there are additional costs associated with it:

Had a customer wanted a Stripped down manual Ford ranger. We were selling it at 100 over invoice. We had one on our lot it was exactly what the guy wanted- except it had AIRCONDITIONING. Yep $698 cost. Guy said no. he had to have one without A/C. The "profit" on the vehicle $297.00- thats what I got my pay based off it- the "gross" (please do not tell me how the dealer makes other money- Hold back and whatever- they may but I never got any of that). Guy was paying cash for the truck, didn't even want a bedliner.

Only one we found, closest, was near Nashville. Ok 580  miles away and 9 hours. Managers said NO deal.

I said Sir we arent getting that truck for you, take the one we have on the lot- thats the best I can do. He got irate and started complaining about it and how we were trying to make him pay money he didn't want to when there was a truck out there.

Sir- its not my decision I cannot get my manager to approve this. bu tthe one we have here we are one of the only dealerships that has one this stripped down left.

"Why you don't want a sale," he said?

No sir I want the sale but look here is the situation, You do not want to pay what you feel is any unnecessary cost correct? OK. How much profit do you think is on this truck it's  a base stripped down unit. I see $297 here is the paperwork, see this number?

How do you think the truck is going to get here? Well we can hire a transaport company to do it, But that's gonna be a flat 700. You my as well take the air conditioning. My boss is not going to take a $400 loss so someone has to pay it if you want to pay the 700 we can do that right now.

"NO?"

Ok we go get it. Thats a nice idea gonna be a cheaper/better one then a transport company. Has to be.

There are two way we can do it. if the dealership wants to trade vehicles and buy one of ours, thats easy, we go and one person drives one vehicle down. That will be me. 580 miles thats 2 tanks each way at 90 bucks getting down there and its a ranger at 17 Miles a gallon coming back  well $175 coming back. Not counting toll roads and what have you- thats  $265, throw in 30 for expenses like toll roads so $295 out of the $297 profit,

If they do not want a trade but demand a buy then I have to take an hourly wage employee with me at $10.00 an hour and we take two cars so thats for gas mind you: $90 down and $90 back plus the $175 for the truck. Has to be an employee to drive the vehicles, no salesman is gonna want to take a half a no money deal like this. 
Again if we pass the cost on to you you are better off buying the one with A/C.

And even if we can pass the cost on to you that's a two day commitment. At some point I have to sleep and to be honest I am not sure I want to sleep in a truck for a few hours so we have a hotel cost. I am sure my managers are going to let me leave for two days to sell a no profit deal when I can in theory sell other cars here and make the dealership more money. Especially when we have a vehicle here.

You do not want to pay what you do not think you have to, neither do my bosses.

He left, disgusted at me. 

Came back two days later and bought it. He had hit some other dealers and they had told him the "no" as well. Some not as nicely as when he got angry at me. We were still the only place that had that stripped of a down a unit. 

[codedoctor]

USMC, Great story. Thanks for sharing.

[lajntx]

Exactly, I might have been tempted to tell him where to go buy it himself so he could waste his time and transportation costs. LOL

So you sell Fords USMC?