The American Repossessor

RAHWAY — Ryan Brennan is only 17, but works hard at a landscaping business he began five years ago. He wanted a car that reflected his entrepreneurial dash. With help from parents who took out a loan from PNC Financial Services, the high school senior got it in May and drove the 2004 BMW off the lot of Galaxy Motors in Rahway.

“I knew he’d make the payments,” says his mother Linda, a teacher’s aide. “He’s young but a good businessman. He earned the $5,000 for the down payment.”

But now the car, for which he and his parents paid $15,000, sits in their Rahway driveway without license plates and can’t be legally driven. The Brennans can’t get plates because they can’t get title to a car they borrowed $10,000 to buy — and they can’t get title because that’s held by an Indiana finance company that registered it in Arkansas.

Registered the title — three months after the Brennans bought the car — because Arkansas law allows it.

“The worst of all possible outcomes in a case like this,” says Jim Appleton, president of the New Jersey Coalition of Auto Retailers, a trade group. “It’s very rare.”

But it happens because, as Appleton says, most people don’t know that when they buy a car from a used car dealer, they’re buying it from someone who doesn’t own it.

And when consumers borrow to finance the purchase, the loan company doesn’t first insist they have title. In the Brennan case, PNC Financial Services — which provided its loan application forms to Galaxy Motors so the Brennans could conveniently borrow from PNC — gave them $10,000 before either the dealer or the Brennans had title.

The Brennans have lots of company. Lt. Joseph Simonetti of the Rahway detective bureau says Galaxy Motors may have sold cars to 44 buyers who are now stuck with cars that can’t be driven on the streets of New Jersey.