THE DMV doesn’t have to tell car owners if it owes them thousands of dollars — and if they don’t claim the money, the agency gets to keep it.
After a tow truck company sold one luxury vehicle for a profit, the state’s DMV snagged the excess funds, and the owner might not even know it.
Towing companies can sell towed cars if they aren’t claimed for a certain amount of time (stock image)[/caption]
The DMV is often not required to notify car owners if it’s holding money from the sale of their car (stock image)[/caption]
In California, a Lamborghini Murciélago Roadster was towed in 2023, CalMatters reported.
When the owner didn’t claim their car after five months, the towing company sold it for over $100,000.
After the towing company deducted its own costs, the remaining $99,668 was turned over to California’s DMV.
And by California state law, the DMV isn’t even required to tell the owner that it’s holding a hefty chunk of their money.
A Lamborghini Murciélago Roadster was towed and then sold in California (stock image)[/caption]
As of March, the Lambo owner had not yet claimed their cash, and they only have until 2027 to do so.
The California DMV did not return a request for updated information on whether the funds had been claimed yet.
HERE’S HOW IT WORKS
When your car is towed, you have a certain amount of time to claim your car before the towing company is legally allowed to sell it in what’s called a lien sale.
In some states, the towing company has to contact the owner before selling their car, but not all states have this requirement, according to the Tow Times.
The proceeds from the sale help the towing company cover the cost of the tow, car storage, lien sale, and any other outstanding debts.
After that, any funds left over from the sale typically go right back to the DMV where they wait to be claimed by the car’s owner.
But if the owner never collects the money, then the state gets to pocket all that cash.
STATE BY STATE VARIATIONS
The amount of time a towing company has before it can legally sell your car varies widely state by state.
In California, the owner has five months to get their car from the towing company.
But in Connecticut, the towing company can sell your car in as little as 15 days if its value is less than $1,500, or in 45 days if the car’s value is higher.
What to do if your car is towed
Wrongfully or not, retrieving a towed vehicle can be a hassle.
If your vehicle is towed after parking in a “No Parking” zone or other legitimate reason, there are a few steps to take to get it back.
Steps to take when your car is towed:
- Try to figure out why your car was towed. Did you not see a posted “No Parking” sign? Did you miss a car payment? Did you return to a lot where you have unpaid citations? Finding the reason can narrow down the phone numbers to dial.
- Locate the vehicle. Most states, cities, or counties require towing companies to leave some form of contact information via a posted sign or sent by mail.
- Recovery dates and times depend on the company that towed the vehicle, but those times will be posted to the website or can be recited by a representative.
- Pay the fees. Be careful to be as prompt as possible, as some tow yards may charge storage fees by the day.
If you feel your vehicle was wrongfully towed, contesting the action can be done with the following steps:
- Be prompt – many states have a small window of time where it’s acceptable to file a complaint against a company that wrongfully towed the vehicle.
- Gather supporting documents: photos, emails, receipts, police reports, and witness statements if applicable. The more evidence, the better.
- Get familiar with your local laws, as laws for towing companies vary per state.
- Try speaking with the towing company. Sometimes it may have been a simple oversight, and the matter can be resolved quickly.
- Contact the Justice of the Peace in your area, as they may have more insight or resources to help. They are often utilized for towing cases.
- Talk to a lawyer. Many lawyers have free case consultations, and depending on the case, it may be worth it to utilize a lawyer.
Source: Oregon Department of Justice, National General, Rak Law Firm
Once the car has been sold, the amount of time its owner is given to collect any remaining profit also varies by state.
Luckily for the Lambo owner, California gives drivers three years to get their money before keeping it.
But in Texas, the driver has two years to claim their money.
And in New York, that time frame is limited to just one year.
Some cities have their own stringent towing rules.
In Newport, Oregon, for example, police can now tow cars just for having an outstanding parking ticket for over 45 days, without notifying the owner.
