Can I take legal action if a Dealership financed me a car and didnt legally hold the title at the time?

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Can I take legal action if a Dealership financed me a car and didnt legally hold the title at the time?

I fiananced a car at a bhph on 06/2018. In
09/2018 they were shut down for fraud. I never
received my permanent tags or registration. I
was contacted buy a company that told me
they bought my loan but also dont have the
title. I was told that they cant obtain the title
because the title was being held by the
previous lien holder because the dealer never
paid off the loan. Its now November and I
havent been able to drive the car since
September due to my temp tags expiring.

Asked on November 17, 2018 under Business Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Yes, you can sue the dealer for both fraud (misrepresenting or lying to you about having title and being able to turn over the car) and breach of contract (violating their agreement with you). Both of these legal grounds would provide a basis to recover monetary compensation. Of course, if the dealership was an LLC or corporation (so effectively you could only sue the dealership itself) but has been "shut down" and so either no longer exists or exists but has no money or assets, even if you sue and win, you won't recover any compensation: a successful lawsuit does not make money appear where is none.
However, in addition to providing a basis to recover monetary compensation, fraud can also provide grounds to void any contracts which were the result of the fraud--that is, to undo them, and escape their obligations. Even if you can't get the money back, it may be possible to void the financing agreement and so not owe any money under it. If you wish to explore this option, consult with an attorney.


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