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005-07 Manufacturer Buy Back (Lemon Law) Title Transactions

Registration and Title Bulletin - #005-07

Date: February 21, 2007

To: All County Tax Assessor-Collectors

Subject: Manufacturer Buy Back (Lemon Law) Title Transactions

These documents contain text of correspondence sent by TxDOT to the county tax assessor-collectors, statutory agents who provide vehicle registration and titling services for citizens in Texas. This information is provided to apprise the general public of issues affecting the state's vehicle titling and registration process.

PURPOSE

To advise of a policy change regarding the acceptance of specific title transactions resulting from a manufacturer buy back or Lemon Law.

DETAILS

Manufacturers are required to title a vehicle in their name when a vehicle is reacquired or repurchased to resolve a Lemon Law complaint or warranty claim. At this time, the Texas title is not branded; instead, a legal restraint is placed on the motor vehicle record. When a Texas resident purchases a vehicle for which a manufacturer buy back title has been issued, they are informed by the county at the time of title application, and by letter when the title application is received in this department. However, if these vehicles are sold out of state, we may be unable to comply with disclosure requirements to inform the purchaser by mail if the purchaser information is not readily available.

Manufacturers should not process manufacturer buy back titles through the state of Texas on vehicles owned, located, and titled out of state. Allowing these out-of-state vehicles to be titled in Texas is effectively preventing disclosure of the manufacturer buy back status to a future purchaser. A change in policy is necessary to protect those possibly uninformed consumers.

COUNTY ACTION

Effective April 1, 2007, manufacturer buy back transactions for vehicles that do not indicate a direct connection to Texas should not be accepted. Acceptable transactions should include a Texas title and/or registration, a Texas owner, or proof the vehicle is physically located in Texas. Box 14b on the Application for Texas Certificate of Title, Form 130-U, should be completed to record the vehicle's physical location. If the vehicle's physical location indicates an address of a title service or similar company processing applications for manufacturers, these applications may not be accepted.

As a reminder, acceptable manufacturer buy back transactions must receive special handling. Special handling transactions should be submitted in accordance with Registration and Title Bulletin #052-06.

CONTACT

Please contact your local Vehicle Titles and Registration Division Regional Office if you need additional information.

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