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CA used dealer: buyer took the title, resold the car without registering, and I can't reach either one. What are my exposure and next steps?

david.909

Green Pea
Jul 13, 2026
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david
Hi all, first-year independent used dealer in California (San Bernardino County). Looking for anyone who has dealt with this in CA.

What happened:
- I sold a used car in July. I filed the REG 51 in QuickTags and issued TLPs.
- The buyer asked me for the title and said he would do the registration himself. I gave him the title. I don't have a signed written statement from him about taking the title.
- He never registered it. I have since learned he resold the car to a third person using a "report of sale" (I don't know if that was an NRL or a bill of sale). The new owner may not have registered it either.
- The 90-day TLP expired this month.
- I collected sales tax from the buyer on the buy order and I'm still holding it. I did not submit any application to the DMV for this sale.
- I can't reach the buyer or the third person right now.

My questions:
1. Under VC 4456, does handing the title to a buyer who asks for it satisfy my 30-day application duty? Or am I still exposed to the late penalties (the 50-day ones)?
2. Has anyone been in this spot with a title-skipped car? What did the DMV tell you to do?
3. What do I do with the sales tax I collected? Is it paid to the DMV with the application or to CDTFA on my return? I'm new and don't know if I'm in the DMV sales tax program.
4. Anything I should or should not do with QuickTags (void, amend, etc.) here?
 

✨ AI Highlights

A first-year California independent used dealer explains how he handed the title directly to a buyer who never registered the vehicle, then resold it to a third party — leaving the dealer exposed on unremitted sales tax, an expired TLP, and no DMV application filed. Respondents warn that releasing a title without a signed statement is a regulatory violation, urge him to contact the DMV's dealer unit and a dealer compliance attorney immediately, and flag that the dealer may be liable for use tax and potential fraud exposure until the chain of ownership is legally resolved.

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