California AutoNation Dealerships Settle Consumer Protection Lawsuit for $650,000

Consumer protestion rainbow umbrella. Creative Commons

LOS ANGELES — District Attorney Nathan J. Hochman Feb. 26 announced that California AutoNation dealerships will pay $650,000 to settle a civil lawsuit alleging that in thousands of instances dating back to 2019, the dealerships failed to timely transfer ownership of used vehicles to consumers after the sale as required by California law.

LADA’s Consumer Protection Division, in partnership with the consumer protection divisions of the district attorneys’ offices of Santa Clara, San Francisco, Sonoma, Ventura, and Riverside counties, investigated and prosecuted this matter. The case was filed in Santa Clara County Superior Court.

Under a judgment signed by Santa Clara County Superior Court Judge William J. Monahan, AutoNation dealerships were ordered to pay $450,000 in civil penalties, $150,000 in investigative costs, and $50,000 to support statewide consumer protection efforts.

In California, used car dealers must submit to the Department of Motor Vehicles an application to transfer registration to a buyer within 30 days of the date of sale. That same 30-day deadline applies to the certificate of ownership. These deadlines may be extended if the DMV returns an application to the dealer because it is missing information.

As part of the settlement, the AutoNation dealerships agreed to create and enforce a host of policies to ensure that consumers receive registration and ownership paperwork in a timely manner. These include:

Placing a “stop” on the sale of used vehicles when they do not have title in hand or a clear path to getting it within 30 days;
Deferring sales commissions on the sale of any used cars that are not capable of a timely transfer;
Requiring that prior to any sale, a smog check or VIN verification is performed, as necessary;
Having at least 10 employees available at all times to process ownership transfers; and
Ensuring that a designated employee at the level of regional manager or higher is responsible for overall compliance.

The AutoNation dealerships resolved the action without admitting the allegations in the complaint, cooperated with the district attorneys’ investigation, and took steps to improve their compliance with the consumer protection laws brought to their attention by prosecutors.

AutoNation is one of the largest automotive retailers in the United States, with more than 300 dealerships and other facilities in at least 20 states, including the State of California.