Table of contents
- The first steps to deal with an abandoned vehicle
- Secure a garage-keeper lien on an abandoned vehicle
- What to expect if you want to sell the abandoned car
- How to take ownership of an abandoned vehicle
- Abandoned Vehicle Laws by State
- Lastly, put an abandoned car prevention plan in place
If you have a customer who has abandoned their car at your repair shop, it can be a frustrating experience. Not only do you have to deal with the hassle of getting rid of the car, but you also have to worry about the legal implications.
Thankfully, there are a few things you can do to make the process go smoothly.
This blog post will outline what you can do if a customer abandons their vehicle at your garage. We’ll also touch on some of the laws surrounding abandoned vehicles to ensure you’re taking the right steps.
The first steps to deal with an abandoned vehicle
Customers may abandon their car at an auto repair shop for a number of reasons, but it is often caused by the lack of funds to pay for the repairs or the repairs amounting to more than the car is worth.
This is an unfortunate situation for all parties to be in, but as a repair shop, there are things you can do to resolve the issue.
Speak with the customer
The best solution may be to attempt to work with the customer to resolve the situation together rather than resorting directly to legal action, which is often a lengthy process.
For example, you may wish to set up a payment plan with the individual or offer them financing. We discussed some reasoning and benefits of offering finance plans in our article, Does Your Auto Shop Offer Repair Financing? which I suggest you read next.
Offering a finance plan may even help you prevent customers from abandoning their car at your garage in the future. Many repair shops work with partners to offer customers a vehicle repair payment plan or a branded store credit card.
Suppose you don’t have an in-house financing or payment plan option at your shop or do not wish to offer it. In that case, you may also suggest to the customer to inquire about 3rd party vendors so they can apply for financing from an outside source.
Secure a garage-keeper lien on an abandoned vehicle
Unfortunately, financing will not be the solution for every situation. In some cases, you may need to take legal action to take ownership of the abandoned car and to recover your losses.
Most states have protections where auto repair shops can place a lien on a vehicle to which they performed repairs but were not paid.
In most states, a lien is a necessary step that will give you the right to conduct a lien sale to recoup the money owed.
The terminology used across the states will vary, with some locations calling it a garage-keepers lien, others a mechanics lien, or a repairman’s lien, among other names.
Much like the terminology, the requirements to acquire a lien will also vary from place to place.
What to expect if you want to sell the abandoned car
As an example, here is a rough outline of what’s required to take ownership of an abandoned vehicle under New Jersey law at the time of writing this article. The process may be different in other states, so we’ll show you how to research your local laws coming up.
- Submit a Lien Search Application with a $15 fee to acquire the owner’s name and any other liens that may be on the vehicle to the New Jersey Motor Vehicle Commission (NJ MVC).
- Wait until you receive a response from the NJMVC
- Gather the repair bill on official letterhead with year, make, and VIN
- Mail an official Abandoned Vehicle Repair Facility 30-day Notice form to the owner and lienholder when applicable with a return receipt requested.
- Send a copy of this notice and the original signed receipt to the NJ MVC. Keep another copy for your records.
- If the customer does not claim the 30-day notice, it must be published twice in a New Jersey newspaper
- Mail the owner and lienholder an official Abandoned Vehicle Repair Facility 5-Day Notice form via certified mail. Include your intent to sell or junk the car.
- Submit a copy of the 5-day notice to the NJ MVC and keep an additional copy for your records
- Submit to the NJMVC either:
- Report of Possession of Abandoned Vehicle
- Report of Possession of Abandoned Vehicle and Request for Junk Title
- Submit to the NJMVC a pencil tracing or photo of the VIN along with a statement that you physically examined the vehicle
- Submit a letter on your company letterhead that states the year, make and VIN. Include a description of how and when you came into possession of the vehicle. This must be notarized.
- Submit a $10 fee
- Wait for the state to review your case. Once you receive the official form “Application for Certificate of Ownership for a Vehicle Abandoned at Repair Facility,” you can sell the vehicle following additional laws.
Conducting a lien sale
Once the process of placing a lien on the vehicle has been completed, you will be able to place the vehicle for sale via a lien sale.
Some states require the car to be sold at auction, but others allow the auto repair shop to acquire a title on the car so it can be used as a loaner car at their shop.
For example, New Jersey law states:
By law, all such vehicles must be put up for public sale/auction. However, if a sale cannot be completed through an auction, the property owner may only apply for a title in their name.
Additionally, some states will only allow you to keep the money owed for repairs and storage, whereas others will allow the repair shop to keep all of the proceeds from the sale.
The rules surrounding this process are often very specific. It is advised that you do due diligence when researching your local laws.
How to take ownership of an abandoned vehicle
The laws surrounding taking ownership of an abandoned vehicle due to non-payment of fees for services rendered will vary drastically depending on where your repair shop is located.
Regardless of where you live, you can expect the process to require some monetary investment in administrative and filing fees.
Additionally, be prepared for the process to take some time. Plan on a minimum of a couple of months.
In some jurisdictions, such as New Jersey, repair shops must wait for 60-days before the car can be considered abandoned. In Mississippi, a car is considered abandoned after 40-days.
You can use the following steps to determine what the process will be where you are located.
Step 1: Get your documentation together
First, create a folder with all the documentation and information so you won’t have to look for it when you’re on the phone with an official government worker, which is step two of this process.
Preparation is key to reducing stress in this situation!
The folder should include relevant information on the abandoned vehicle, its owners, and your services.
This may include:
- a service contract signed by the customer
- all relevant dates, including the day it was dropped off at your facility
- the date the repairs were made
- lists and receipts for all the parts and services you provided
- the customer contact information if available
- the VIN
- and any other information you have about the case
Step 2: Start making calls
Next, call your local government offices to learn the regulations that apply to your circumstances. A quick Google search will provide you with the contact information you need.
If you are unsure where to start, we suggest contacting the following in the order we’ve listed below:
- Call your city or township first
- Call your county second
- Call your state DMV third
It could very well turn out that you will need to speak with someone at a state level. But, even if for no reason other than practicing an abundance of caution, it’s best to start with your local municipalities first.
That way, you can be positive you have not missed any important details or city/county-level regulations.
You can also try email, however, calling is frequently preferable in situations like this. Keep in mind that it may be necessary to leave voicemails. If your voicemails are not being answered, call regularly.
Don’t be surprised if you are put to hold. In this situation, we find that putting your phone on speaker, resuming your task, and practicing patience will go a long way while you wait.
You must be persistent in this situation, but remember to be polite once you have a chance to speak with someone. Explain your situation and ask them what legal requirements you must fulfill to take ownership of the abandoned vehicle to recoup your monetary losses.
Some locales may provide you with a packet that includes a to-do checklist and the appropriate documents you need to complete. In other cases, you may need to gather these documents on your own.
Be sure to take notes during these conversations so you don’t forget any important details.
Step 3: Follow the City, County, & State procedures
Now that you’ve contacted the appropriate people and acquired the official protocol to handle your situation, you’re ready to start the next step: jumping through all the legal hoops.
At this step, you should be prepared to file paperwork—and, in most cases, lots of it.
The folder you put together in Step 1 will be helpful here, so keep it handy to reference dates, names, and vehicle information easily.
Again, the exact procedure will vary across locations, but some typical requirements you may expect to do at this stage include:
- Mailing a certified letter to the owner of the abandoned car to notify them of your intentions to begin charging a daily storage fee and taking ownership of the car to recoup your expenses
- Filing the appropriate paperwork to secure a lien on the vehicle
- Photographing the car and VIN plate
- Publishing an official notice in a local newspaper before auctioning the vehicle
Step 4: Use what you’ve learned to develop an abandoned vehicle policy
Now that you’ve done all the work—making calls, filling out forms, sending certified letters of intent to the vehicle owner, etc. — you probably have a better understanding of what to do should a customer abandon a vehicle at your repair shop.
Now is the perfect time to create a policy for this type of situation.
Greg LaPoint, the owner of GBI Title in Colorado, explains, “It’s a complex procedure, and until you’ve done a lot of them, you’re likely to make mistakes. It involves sending many certified demand letters and documenting every step of the way.”
Hopefully, you won’t be dealing with abandoned cars often, but creating a plan of action that you can reference in the future will save you time and frustration.
This can be as simple as creating a checklist of the steps you need to take. Make notes on any waiting periods that must happen, in addition to any deadlines to file paperwork and reports.
Include links to any paperwork you will be required to fill out so that you can easily access them. You can also consider keeping an extra copy or two printed out and filed away. Be sure to bookmark this page for reference.
Abandoned Vehicle Laws by State
We know we’re beginning to sound like a broken record, but unfortunately, the reality of the situation is that the process for dealing with an abandoned vehicle at your repair shop varies between different states, counties, or parishes, and even between different cities.
We’ve said it before, but it bears repeating:
You’ll likely end up dealing with your state in the process but remember to always check with your city, county, parish, or tribal government (when applicable) first.
You don’t want to go through all the trouble just to realize you missed something at the county or city level.
With that out of the way, here are additional resources on abandoned vehicle laws by state that you can refer to when dealing with the unfortunate situation you’ve found yourself in.
One thing to keep in mind is that rules and laws are often changed and updated, so it’s best to speak with an official on the phone to be sure you are getting the most up-to-date information, which the links below may not reflect in some cases.
Lastly, put an abandoned car prevention plan in place
We all know the adage, an ounce of prevention is worth a pound of cure. I think we can all agree that it is especially true in the case of customers abandoning cars at repair shops.
We’ve touched on offering in-house financing already, which is one option that may help. You may also be interested to read what your fellow Auto Management Network members do at their repair shops to reduce the risk of a customer abandoning their car.
Last but not least, be sure to read There’s Money in Those Abandoned Cars! for additional tips on how to turn a bad situation into a better one.