My brother bought a 2005 Land Rover, paid cash for it and the title was free and clear from the guy he bought it from. My brother's intention was to flip the vehicle and try to make a couple grand off of it. He has done this before, maybe 3 or 4 times over the course of the last few months. He always buys the vehicles off of Craigslist and then attempts to sell them on Craigslist also.

So, this time to avoid paying fees, he bought the vehicle and never transfered the title, so the car is still in the previous owner's name, not my brother's name. Well yesterday, he gets a call from an interested buyer and agrees to meet the guy in Detroit. My brother meets him, the guy hands him a cashier's check and they part ways. About an hour ago, my brother discovers the check is fraudulent. He has full coverage on the vehicle (or so he says) but again, it is not in his name. Can you even get coverage on a vehicle that isn't in your name? Anyway, he's freaking out right now because this guy has his Land Rover, the title (which again is not in his name) and he's got a fake cashier's check worth nothing.

What can he do? Can it still be reported stolen? Is he just SOL or does he have any recourse? I told him not to do it after the first two cars he flipped and told him I was leary about the details of this transaction, but of course he is going to do what he wants to do and not listen to me. Is he screwed on this?

 

In Texas, what he was doing is illegal without a dealer's license. I doubt he has a leg to stand on. If it is illegal there, and he got scammed, I suspect he has no recourse.

 

Yes you can insure a car that's not in your name...I do it all the time....also your bro is the owner of tha land rover even if titles not in his name. A signed bill of sale will confirm that. I flip cars al the time so I know....sorry to hear bout that bad check tho

 

He at least needs to contact the police and tell them about the bad check. Nothing will probably happen, but just in case this guy ever gets caught, your brother will have a record of the 'theft'.

Better contact the insurance company too. They might have some advice.

How much money are we talking about and how much did he save by not transferring the title?

 

Every state allows you so to buy so many cars a year without a DL...Tn is 8 but I'm not sure what TX is...

 

Buy and resale without paying sales tax? Unless it has been changed, in Texas, it is zero.

 

Some states you can only sell so many vehicles in a year.
Your brother may want to look into that.

 

This just pisses me off the more I think about it. I just found out an hour ago. He called my wife and told her. He bought the vehicle for around $17K and he "sold it" for $19,500 or something like that. I called my wife but she is on the phone with him right now, so I hope to god he still has the bill of sale from the initial purchase. I have to find out. I'm at work right now but I will find out the details in a few hours as this unravels, and I'll post up what I know. Man this kid kills me sometimes.

 

In va, it used to be unlimited back around 90, and I had a friend that would obsess over the auto trader and newspaper ads. He made quite a bit of money, but they tightened up. I think you can still sell 6 or 8 cars a year without a dealer's license.

I'd report it stolen in a heartbeat, although auto theft recovery stats are pretty poor from what I hear.

 

Man, that's a bad deal. I absolutely would report it stolen.

Not sure if the lack of registration will hurt his chances any more or than just getting burned by the bad check.

On registration, I'm sure the laws vary from state to state. In California, we have really high vehicle registration fees and the buyer essentially pays sales tax on the purchase price. The state requires you to register a purchase within weeks of buying a vehicle.

Can't hardly breathe without the state getting their cut, much less buy or sell a car.

 

I wouldn't wait any longer to notify the insurance company. Depending on insurance company...there is a wait time before any compensation is rewarded. They will only pay market value...not sure what the going rate is for his model.

So, did your brother have full coverage? Since he paid cash and there was no lien he could of opted for just minimum liability. If that's the case, he's screwed.

 

I'm not aware of any law in Texas that states you cannot buy and resell cars, as long as they are paid for. A bill of sale will work. As long as taxes are paid, there should be no problems.

In this case, I think he is screwed unless he had full coverage insurance. Actually, only comprehensive here in Texas. Collision and liability are the expensive pieces here in Texas.

 

I am a licensed insurance agent in MS and TN. So I cannot 100% tell you how it would work in Michigan. But in general you cannot insure something that you do not own. Down here if the vehicle is not titled in your name or application for title has not been made then you would have no coverage for a car that technically never belonged to you. The only usual exceptions to this that I am aware of is if you have an interest in the vehicle such as a finance company having the ability to force place insurance if you let yours lapse or if you rent a car and buy the rental company's insurance. Your brother was trying to avoid owning it to avoid the tax and very well may have avoided his right to insure the car. He still needs to contact the insurance company and the police.

 

Not sure if it differs from each State, but in order to register a vehicle you must first show proof of insurance. When you get insurance....the proof of ownership is either a bill of sale and/or title. I can't think of any insurance agent not asking for either prior insuring a vehicle. So, he can get insurance without it being registered and/or titled in his name. Each State has it's own set of time to register a vehicle. In Texas, you can transfer a title without insurance but can't register one without it. So, prior to going down to the DMV....you must show proof of insurance.

Like mentioned, curious as to what type of insurance he got.

 

I would worry more about the title that your brother got from the guy he purchased it from...not so much of the bill of sale. I recently purchased a used vehicle and all I showed my insurance agent was the signed over title. The title showed the original owner, with no lien holder, and signature of owner releasing vehicle to me. The insurance agent doesn't care what you paid for it.....only the State when you register a vehicle, and that only if the amount paid for is in question. Gone are the days when you say you paid $500 for a $5000 vehicle. States now are smarter and will tax you on fair market value if they decide that you are not truthfully stating what you actually paid for the vehicle.

Your brother should be fine as long as he got "full coverage" and got signed over title.