Title typically arrived from the Illinois Secretary of State’s office within four to six weeks. And by the time the title actually arrived, our restoration was complete, and we would have several “buyers” lined up. Our hobby was both fun and profitable.

On any given day, we could scan our high school lot and see several of “our restored cars” on it. The buyers always knew where we lived and could stop us in the high school hallways and seek our advice. We always stood by our “restored cars.”

Those were the “good old days.”

Today, now more than ever, with Facebook Marketplace, Craigslist, Autotrader, or eBay Motors, you need to know the answer to the question: “who is this seller?”  Then you need to answer and confirm “Is this car sold as ‘advertised?’”

This two-part series will discuss the pitfalls to avoid when buying or selling a used car today. In this part, we will discuss “Know who the other guy is.” In the second part, verify that the car is as “advertised.”

While the majority of “used car” sales are transacted at dealerships, one resource found that in July 2022 that 48% of all “used car” sales were transacted by private parties. After COVID, a significant bump in new car prices occurred and some commentators now believe that private party “used car” sales might exceed those sold at dealerships.

Buying and selling with a private party may offer significant savings but doing so also comes with risk.

One practice issue gaining increased attention from the regulators and auditors at the Secretary of State/DMV offices is “Title Curbstoning.” Simply, it is the practice of selling multiple vehicles without a dealer license while disguising those transactions as “private sales.”

Though it may appear harmless at first glance, Title Curbstoning creates significant legal, financial, and safety risks for consumers. This article outlines what Title Curbstoning is, how it violates dealer licensing laws, and what buyers and sellers need to understand about its legal consequences.

What is Title Curbstoning?

Title Curbstoning occurs when an individual or business sells vehicles to the public without a valid dealer license, often using deceptive methods to make the sale appear private. These individuals may purchase cars at auctions, from distressed sellers, or through trade-ins, and then resell them for profit without disclosing known issues or their business intent.

Curbstoners avoid putting their name on the title—either skipping ownership transfers altogether or misusing temporary registration documents. The term “Curbstoning” comes from the common practice of parking cars on the side of the road (often near curbs) with “for sale” signs, creating the appearance of a casual, private sale.

We can prevent curbstoners by either insisting that as a seller, the assignment and transfer of title will occur at the sale, or as a buyer, only proceed with the purchase with a title that will be immediately accepted by the Secretary of State/DMV. If the curbstoner insists that neither is necessary, walk away from the deal. Beware of the consequences should you proceed.

The first consequence of selling to a curbstoner is that they will ask you to leave the title blank. So, when you sell your car, they ask you to sign but leave blank to whom you are transferring or assigning the title. The rule of thumb is to ensure that you either accompany the buyer to the currency exchange or DMV to transfer title to the buyer, or complete the sale and assign the title to the buyer by executing on the title itself.

Until the Secretary of State/DMV office recognizes the transfer or assignment, you—the seller—remain on title and responsible for everything that happens with that vehicle whether it is a parking ticket, toll charge, or vehicle citation. The Secretary of State/DMV/Toll Authorities/Municipalities will come back and look to you to pay for any charges incurred. [At a minimum, take a photo with your camera on your phone and preserve that record in the event something occurs to the vehicle. Always document that you have transferred or assigned title to the private party, as well as to the used or new car dealership. If possible, then also notify the Secretary of State/DMV of the sale, too.]

By alerting the Secretary of State/DMV to the transfer or assignment of the title, that will begin to reduce the first consequence of Title Curbstoning.

The Second Consequence of Title Curbstoning

The second consequence of Title Curbstoning can occur in two ways: First, the assignment or transfer of title has not been timely satisfied.

Each state imposes specific deadlines for when a vehicle title must be registered following a sale. Failure to file within these timeframes can result in penalties, delayed ownership recognition, or exposure to legal disputes. Below are selected state requirements:

• Illinois: 5 business days after delivery of the vehicle and assigned title (625 ILCS 5/3-112(b); People v. Johns, 153 Ill. 2d 436).
• California: 20 days from the vehicle’s first operation in the state (Cal Veh Code § 4152.5).
• New York: 30 days after the transfer of ownership (NY CLS Veh & Tr § 2104; People v. Reyes).
• New Jersey: 10 days after purchase to submit proof and receive certificate of ownership (N.J. Stat. § 39:10-11; Progressive Group v. Hurtado).
• Texas: 30 days for most transactions; up to 45 days for seller-financed sales (Tex. Transp. Code § 501.145; Tex. Tax Code § 152.069).
• Florida: 30 days to apply for a certificate of title; penalties apply for delay (Fla. Stat. §§ 319.22–23)

Noncompliance can lead to civil penalties, tax liabilities, loss of marketable title status, or failure to perfect liens. In some states, late filing may expose the buyer to criminal liability, especially where fraud or evasion is involved. Delays in filing also increase the likelihood of curbstoning-related risks and ownership confusion.

The second way that Title Curbstoning arises is when the state’s threshold for the number of vehicles that can be sold by an individual as a private party has been exceeded within a twelve month period.

States have regulations that are triggered when a private party sells a specified amount of vehicles within a twelve month period. When that happens, it triggers the requirement for a dealer license. These limits are designed to distinguish genuine private sales from unregulated business activity. Once someone crosses that line—by selling multiple vehicles for profit, operating without a license, or failing to follow title laws—they are in violation of state dealer licensing statutes.

Title Curbstoning is illegal for several reasons:

• It circumvents consumer protection laws such as vehicle disclosure requirements.
• It avoids tax and registration obligations, resulting in potential fraud.
• It violates title transfer laws, especially when sellers skip their own registration to avoid being held liable for defects, liens, or legal issues.

States also prohibit the use of dealer-only resources, such as wholesale auctions, by unlicensed individuals. In many jurisdictions, offering even one vehicle for sale without proper ownership documentation may qualify as an illegal sale.

How Many Cars Can You Sell Without a License?

While laws vary by state, most jurisdictions set strict limits on how many vehicles an individual can sell within a 12-month period before being legally classified as a dealer. These thresholds are in place to prevent commercial sellers from bypassing licensing, tax obligations, and consumer protection laws.

Below is a comparison showing the maximum number of vehicles you can sell per year without a dealer license in each U.S. state. Exceeding these limits—or acting in a commercial capacity even under the threshold—may result in fines, criminal charges, or classification as an unlicensed dealer.

Some states allow zero unlicensed vehicle sales per year, meaning any sale outside of a personal transaction involving a titled vehicle in your name may be considered a violation. States like New Jersey, North Dakota, and Oklahoma fall into this category.

Even in more lenient states, selling multiple cars for profit, skipping title transfers, or advertising repeatedly may subject the seller to penalties—even if they remain under the numeric cap.

Common Red Flags of Title Curbstoning

Buyers may encounter a curbstoner without realizing it. Here are warning signs that suggest a seller may be operating illegally:

• Seller name does not match the name on the title (i.e., “open title” or “jumped title”).
• The seller claims to be helping a friend or selling a family member’s car.
• No fixed business address: cars are listed across multiple online platforms.
• Temporary tags used to extend resale opportunities without titling.
• The seller appears to sell cars frequently but avoids putting their name on any documents.

If a seller avoids paperwork or rushes the sale, it may be a deliberate attempt to avoid legal exposure.

Legal Consequences for Unlicensed Sellers

Selling cars without a dealer license is typically a civil and criminal offense, depending on the number of violations and the presence of fraud. Penalties may include:

• Fines and penalties for each unlicensed transaction.
• Cease and desist orders issued by the state Department of Motor Vehicles (DMV) or Department of Revenue.
• Vehicle seizure if the state determines the seller is conducting business illegally.
• Criminal charges, particularly if tax evasion, title fraud, or deceptive business practices are involved.
• Civil liability if the buyer sues for fraud, misrepresentation, or undisclosed defects.

Additionally, sellers who avoid titling the vehicles in their own names may face title jumping violations, which are also illegal in all 50 states.

Risks to Buyers

Consumers who unknowingly purchase a vehicle from a title curbstoner face several potential problems:

• Undisclosed liens that prevent legal title transfer.
• Salvage or branded titles hidden from the buyer.
• Odometer rollbacks or concealed damage history.
• Void warranties and lack of recourse for repairs or refund.
• Difficulty registering or insuring the vehicle with the DMV—and then who do you turn to? The seller? The original owner who sold the vehicle to the “curbstoner”? Good luck. Even if you retain counsel, and weave through a mandamus action to order the DMV to title the vehicle, that could take months, not days.

In some cases, buyers may be forced to return the vehicle or take legal action to recover damages—often with little success if the seller disappears or cannot be located.

What Buyers Should Do Before Purchasing a Vehicle

To protect yourself from unlicensed sellers:

• Ask to see the seller’s ID and verify it matches the name on the title.
• Run a title history report through the DMV or a service like NMVTIS or Carfax.
• Avoid any sale where the seller won’t sign the title or provide a bill of sale.
• Check if the seller appears to have multiple listings or frequent turnover.
• Contact your state licensing board to report suspected curbstoners.

In Illinois, for example, complaints can be filed with the Illinois Secretary of State’s Police – Vehicle Services Department, which investigates Curbstoning and unlicensed dealer activity.

Conclusion

Title Curbstoning is more than just an informal way to sell vehicles—it is a clear violation of dealer licensing laws and a deceptive practice that leaves consumers exposed to serious legal and financial risks. From hidden liens and false ownership records to denied title transfers and undisclosed damage, the consequences for unsuspecting buyers can be significant and long-lasting.

Unlicensed sellers who operate outside regulatory oversight not only undermine public trust in the used car market but also deprive consumers of the protections guaranteed under state and federal law. States must take stronger action to identify and penalize Curbstoning activity, while buyers must remain vigilant and informed before making any vehicle purchase.

If you’ve purchased a vehicle from an unlicensed seller, suspect title fraud, or have been denied proper ownership transfer, contact FS CORPS immediately. Our legal team is experienced in handling title disputes, illegal sales violations, and Curbstoning-related fraud. We’re here to protect your rights and help hold unlawful sellers accountable.

This article examines the facts of the case, the legal analysis presented in court, and the broader implications of title jumping/skipping for both consumers and dealerships. It also provides guidance for individuals navigating similar situations, emphasizing the need for vigilance and legal recourse when faced with unethical business practices.

Background of the Case

This matter began a while ago in April 2019 when Bradley purchased a six-year-old 2013 Volkswagen Passat from B & Z Auto Enterprises. The VW was financed through a retail installment contract, a common arrangement for consumers unable to pay the full purchase price upfront. However, the VW’s reliability was immediately questioned. Bradley encountered severe mechanical issues shortly after the purchase, including backfiring, stalling, and frequent breakdowns. These issues rendered the VW practically “unusable.”

Over the next several months, Bradley returned the VW to the dealership multiple times in an attempt to resolve the mechanical problems. Between April and December 2019, the dealership undertook repairs, but the issues persisted. Despite Bradley’s repeated efforts, the VW remained inoperable, leaving Bradley with no viable transportation and significant frustration.

In March 2020, after exhausting her financial resources on attempted repairs, Bradley sought resolution from the dealership. Initially, the dealership promised to trade the faulty VW for a functional one. However, the dealership’s finance manager later reneged on this agreement. Bradley subsequently left the VW with the dealership, believing the matter would be resolved. Later when she asked about the VW’s current status, Bradley discovered that the dealership could not locate the VW.

Testimony from a dealership representative revealed that the VW had remained in the dealership’s possession until May 2020, when the dealership sold it at auction. A Carfax report introduced into evidence confirmed the auction date and indicated that the VW was listed as a “dealer vehicle.” This revelation raised questions about whether the dealership had engaged in title jumping/skipping, a deceptive practice that leaves buyers without proper ownership documentation as well as violating New York consumer protection laws.

Legal Analysis and Court Ruling

The court’s decision in Bradley v. B & Z Auto Enterprises centered on the dealership’s failure to adhere to its legal obligations, particularly concerning title transfer and disclosure. Title jumping/skipping occurs when a dealership fails to properly transfer ownership of a vehicle to the buyer, often leaving the title in the name of a previous owner or listing the vehicle as a dealer asset. This practice violated New York consumer protection laws and also exposed buyers to financial and legal risks, such as unpaid taxes and disputes over ownership.

In this case, the court relied heavily on the Carfax report, which provided a clear timeline of events. The report indicated that the VW was sold at auction on May 25, 2020, while still listed as a dealer vehicle. The court determined that this action constituted a breach of the dealership’s obligations under New York law. By failing to ensure a proper title transfer and selling the vehicle at auction without resolving Bradley’s claims, the dealership had engaged in deceptive practices.

The court ruled in Bradley’s favor, awarding her $7,438 in damages. It cited the auction date as the “earliest ascertainable date the cause of action existed” and granted prejudgment interest from that date. This decision underscored the dealership’s accountability for its actions and provided a measure of financial relief to Bradley, who had suffered significant losses due to the dealership’s misconduct.

Understanding Title Jumping/Skipping

Title jumping/skipping is a pervasive issue in the automotive industry and is a “practice” often driven by smaller used car dealerships seeking to avoid taxes or fees associated with proper title transfers. However, this practice comes at a significant cost to consumers. When a dealership fails to transfer ownership properly, buyers are left in a precarious position. Without a clear title, they may be unable to register the vehicle, obtain insurance, or sell it in the future. Additionally, unresolved liens or unpaid taxes associated with the vehicle can become the buyer’s responsibility, leading to further financial hardship.

In Bradley v. B & Z Auto Enterprises, the dealership’s actions exemplify the detrimental impact of title jumping/skipping. By listing the vehicle as a dealer asset and selling it at auction, the dealership effectively denied Bradley her rights as a buyer, leaving her without a functional vehicle or legal recourse to address the mechanical issues.

Broader Implications: Protecting Consumer Rights

The judgment in Bradley v. B & Z Auto Enterprises serves as a stark reminder of the importance of consumer protections in vehicle transactions. It highlights the need for dealerships to adhere to legal requirements and act in good faith when resolving disputes with buyers. For consumers, the case underscores the importance of vigilance and awareness of their rights under the law.

Legal Obligations of Dealerships

Under New York law, the court held that dealerships are required to:

• Ensure Proper Title Transfer: Dealerships must transfer ownership of the vehicle to the buyer promptly and accurately, ensuring that the title reflects the buyer’s name.
• Disclose Vehicle History: Any known issues with the vehicle, including previous accidents, repairs, or liens, must be disclosed to the buyer.
• Resolve Disputes Transparently: When disputes arise, dealerships are obligated to engage in good-faith negotiations and seek equitable resolutions.

Failure to meet these obligations can result in legal consequences, as demonstrated in Bradley’s case.

Lessons for Consumers

For consumers, the case provides valuable insights into navigating vehicle purchases and addressing disputes with dealerships. Key takeaways include:

• Document Everything: Maintain detailed records of all transactions, agreements, and communications with the dealership. This documentation can serve as critical evidence in the event of a legal dispute.
• Verify Title Transfer: Ensure that the title is transferred into your name promptly after the purchase. Request a copy of the title to confirm that it accurately reflects your ownership.
• Seek Legal Advice: If you encounter issues such as title jumping/skipping or other deceptive practices, contact FS CORPS immediately. At FS CORPS, we are dedicated to protecting consumer rights and will explore legal options to ensure the best possible resolution for you.

Legal Framework: Consumer Protection Laws

The outcome of Bradley v. B & Z Auto Enterprises is rooted in the broader framework of consumer protection laws, which are designed to safeguard buyers from unethical practices in the marketplace. In New York, the Court found that the dealership committed the following violations:

• General Business Law § 349: This statute prohibits deceptive acts or practices in the conduct of any business, trade, or commerce. Violations can result in significant penalties, including damages and attorney’s fees.
• Uniform Commercial Code (UCC): The UCC governs sales transactions and imposes obligations on sellers to deliver goods that conform to the terms of the contract. In the context of vehicle sales, this includes ensuring that the vehicle is free from defects and that the title is properly transferred.

By holding the dealership accountable under these laws, the court reinforced the principle that businesses must operate with integrity and respect for consumer rights.

Conclusion: Ensuring Accountability and Fairness

The decision in Bradley v. B & Z Auto Enterprises is a victory for consumer protection, affirming that dealerships cannot evade their legal responsibilities without facing consequences. It highlights the critical role of the legal system in upholding fairness and accountability in the marketplace.

For consumers, the lawsuit serves as a reminder to remain vigilant when purchasing vehicles and to take proactive steps to protect their interests. By understanding their rights and seeking legal recourse when necessary, buyers can hold dealerships accountable and ensure that justice is served.

Understanding Vehicle Title Jumping

At its core, “title jumping” involves a seller transferring a vehicle’s title to a buyer, who subsequently sells the vehicle to another party without ever registering the vehicle in their name. This creates a gap in the ownership record and makes it difficult for authorities or future owners to verify the vehicle’s history. Title jumping is illegal in Illinois, as state law requires every vehicle owner to apply for a certificate of title.

Under the Illinois Vehicle Code, 625 ILCS 5/3-101, every owner of a vehicle in the state must apply to the Secretary of State for an Illinois certificate of title for the vehicle. The law clearly prohibits any person from transferring a vehicle without properly documenting the transfer through this legal channel. Failure to comply with this statute can result in fines, penalties, and even criminal charges, depending on the severity of the violation.

Common Scenarios of Title Jumping

Title jumping is often seen in the used car industry, particularly in situations where vehicles change hands quickly or are sold at auctions. A common practice involves a dealer working with a middleman to purchase vehicles at auction. The middleman might take possession of the vehicle but fails to properly register it, instead selling the car to another party.

In other lawsuits, individuals may engage in title jumping to avoid sales tax or registration fees. By skipping the registration process, title jumpers avoid paying the necessary taxes that are typically assessed when a vehicle changes hands. This practice not only defrauds the state of revenue but also makes it challenging for future buyers to trace the vehicle’s history, including accidents, liens, or other legal encumbrances.

Legal Consequences of Title Jumping in Illinois

Title jumping is not merely a technical violation; it is considered a form of fraud under Illinois law. The state takes a stringent stance against title jumping because it undermines the integrity of vehicle transactions and can lead to numerous legal complications.

Some of the legal consequences include:

• Fines: Individuals or businesses caught engaging in title jumping may face substantial fines.
• Criminal Penalties: In more severe lawsuits, title jumping can result in misdemeanor or felony charges, especially if the fraudulent transaction involved high-value vehicles or if the individual has engaged in multiple instances of fraud.
• Revocation of Dealer Licenses: For car dealerships involved in title jumping, the Illinois Secretary of State can revoke or suspend their license to operate. This is a serious consequence for dealers who rely on their reputation and ability to legally sell vehicles.

Lawsuit Study: Nudi Auto RV & Boat Sales v. John Deere Insurance Co.

The lawsuit of Nudi Auto Rv & Boat Sales v. John Deere Insurance Co., 328 Ill. App. 3d 523 (1st Dist. 2002) highlights the complexities that can arise when a vehicle’s title is not properly handled. In this lawsuit, a car dealer used a middleman to purchase vehicles at auction. The middleman was responsible for handling the funds and delivering the title after payment to the auction house. However, the middleman became insolvent and failed to pay the auction house, leaving the dealer without legal title to the vehicles.

The dealer was then forced to pay additional money to the auction house to avoid repossession of the vehicles. When the dealer sought coverage under its insurance policy, the insurer argued that it was not liable for the losses, citing several statutory exceptions for bona fide purchasers.

However, the Illinois Appellate Court disagreed, ruling in favor of the dealer. The court held that under the plain language of the insurance policy, the dealer was entitled to coverage for the losses. The ruling emphasized the importance of properly handling vehicle titles, as the dealer’s losses stemmed directly from the middleman’s failure to deliver the legal title.

This lawsuit underscores the risks associated with title jumping, particularly for businesses that rely on third-party agents to facilitate vehicle transactions. Even when parties act in good faith, the failure to properly transfer a title can lead to significant financial losses and complex legal disputes.

Preventing Title Jumping in Illinois

In order to address the issue of title jumping, Illinois has implemented several safeguards designed to ensure that vehicle titles are properly transferred and recorded. These measures include:

1. Title Verification: Buyers and sellers are encouraged to verify the title status of any vehicle before completing a transaction. This can be done through the Illinois Secretary of State’s office, which provides information about the vehicle’s title history, including whether there are any liens or legal disputes associated with it.
2. VIN Inspections: Vehicle identification number (VIN) inspections are required for certain vehicles to ensure that the vehicle’s title matches the physical characteristics of the car. This step helps prevent VIN swapping, another form of title fraud that can be associated with title jumping.
3. Mandatory Registration: Every vehicle owner in Illinois is required to apply for a certificate of title in their own name. This prevents individuals from skipping the registration process and selling a vehicle without establishing legal ownership.
4. Sales Tax Enforcement: Illinois imposes strict penalties on individuals who fail to pay the required sales tax when transferring a vehicle. Title jumpers often attempt to evade this tax by never officially registering the vehicle, but the state’s enforcement efforts aim to close this loophole.
5. Dealer Regulations: Car dealerships in Illinois must follow strict regulations regarding title transfers. Dealers are required to submit title applications on behalf of buyers, ensuring that titles are properly transferred in a timely manner. Failure to do so can result in fines or the suspension of the dealer’s license.

How Buyers Can Protect Themselves

For consumers, purchasing a vehicle with a jumped title can lead to numerous problems, including difficulties registering the vehicle, unexpected liens, or even repossession. To avoid these issues, buyers should take the following steps before purchasing a used vehicle:

1. Request a Vehicle History Report: A vehicle history report can provide valuable information about the car’s past ownership, including whether the vehicle has been sold multiple times without being registered.
2. Verify the Title: Buyers should always verify the title status through the Illinois Secretary of State’s office. This ensures that the seller has legal ownership of the vehicle and that there are no outstanding liens or disputes associated with the title.
3. Check for Red Flags: Be wary of sellers who offer to sell a vehicle without a title or insist on completing the transaction without registering the car in your name. These are common tactics used by title jumpers to avoid detection.
4. Use Reputable Dealers: Purchasing from a licensed dealer provides an additional layer of protection, as dealers are required by law to properly transfer titles and handle the necessary paperwork.

Conclusion

Vehicle title jumping in Illinois is a serious practice that can have wide-ranging consequences for buyers, sellers, and third parties. The illegal practice undermines the integrity of vehicle transactions and creates legal complications that can result in financial losses or even criminal charges. By understanding the risks and taking steps to ensure that vehicle titles are properly transferred, individuals can protect themselves from becoming victims of title jumping. The lawsuit of Nudi Auto RV & Boat Sales v. John Deere Insurance Co. serves as a reminder of the importance of handling vehicle titles properly to avoid costly legal disputes.