Buying/Selling a Used Car Today: Beware of “Title Curbstoning”

Long long ago, back in high school, my brothers and I bought “used cars” from wherever we found a bargain. We had one rule: we required “title in hand.” We immediately put title in our name and began to “restore” the car. [When I think of the cars that passed through our garage, namely a 1975 Trans Am 455 HO, I have so many regrets.]

Title typically arrived from the Illinois Secretary of State’s office within four to six weeks. And by the time the title actually arrived, our restoration was complete, and we would have several “buyers” lined up. Our hobby was both fun and profitable.

On any given day, we could scan our high school lot and see several of “our restored cars” on it. The buyers always knew where we lived and could stop us in the high school hallways and seek our advice. We always stood by our “restored cars.”

Those were the “good old days.”

Today, now more than ever, with Facebook Marketplace, Craigslist, Autotrader, or eBay Motors, you need to know the answer to the question: “who is this seller?”  Then you need to answer and confirm “Is this car sold as ‘advertised?’”

This two-part series will discuss the pitfalls to avoid when buying or selling a used car today. In this part, we will discuss “Know who the other guy is.” In the second part, verify that the car is as “advertised.”

While the majority of “used car” sales are transacted at dealerships, one resource found that in July 2022 that 48% of all “used car” sales were transacted by private parties. After COVID, a significant bump in new car prices occurred and some commentators now believe that private party “used car” sales might exceed those sold at dealerships.

Buying and selling with a private party may offer significant savings but doing so also comes with risk.

One practice issue gaining increased attention from the regulators and auditors at the Secretary of State/DMV offices is “Title Curbstoning.” Simply, it is the practice of selling multiple vehicles without a dealer license while disguising those transactions as “private sales.”

Though it may appear harmless at first glance, Title Curbstoning creates significant legal, financial, and safety risks for consumers. This article outlines what Title Curbstoning is, how it violates dealer licensing laws, and what buyers and sellers need to understand about its legal consequences.

What is Title Curbstoning?

Title Curbstoning occurs when an individual or business sells vehicles to the public without a valid dealer license, often using deceptive methods to make the sale appear private. These individuals may purchase cars at auctions, from distressed sellers, or through trade-ins, and then resell them for profit without disclosing known issues or their business intent.

Curbstoners avoid putting their name on the title—either skipping ownership transfers altogether or misusing temporary registration documents. The term “Curbstoning” comes from the common practice of parking cars on the side of the road (often near curbs) with “for sale” signs, creating the appearance of a casual, private sale.

We can prevent curbstoners by either insisting that as a seller, the assignment and transfer of title will occur at the sale, or as a buyer, only proceed with the purchase with a title that will be immediately accepted by the Secretary of State/DMV. If the curbstoner insists that neither is necessary, walk away from the deal. Beware of the consequences should you proceed.

The first consequence of selling to a curbstoner is that they will ask you to leave the title blank. So, when you sell your car, they ask you to sign but leave blank to whom you are transferring or assigning the title. The rule of thumb is to ensure that you either accompany the buyer to the currency exchange or DMV to transfer title to the buyer, or complete the sale and assign the title to the buyer by executing on the title itself.

Until the Secretary of State/DMV office recognizes the transfer or assignment, you—the seller—remain on title and responsible for everything that happens with that vehicle whether it is a parking ticket, toll charge, or vehicle citation. The Secretary of State/DMV/Toll Authorities/Municipalities will come back and look to you to pay for any charges incurred. [At a minimum, take a photo with your camera on your phone and preserve that record in the event something occurs to the vehicle. Always document that you have transferred or assigned title to the private party, as well as to the used or new car dealership. If possible, then also notify the Secretary of State/DMV of the sale, too.]

By alerting the Secretary of State/DMV to the transfer or assignment of the title, that will begin to reduce the first consequence of Title Curbstoning.

The Second Consequence of Title Curbstoning

The second consequence of Title Curbstoning can occur in two ways: First, the assignment or transfer of title has not been timely satisfied.

Each state imposes specific deadlines for when a vehicle title must be registered following a sale. Failure to file within these timeframes can result in penalties, delayed ownership recognition, or exposure to legal disputes. Below are selected state requirements:

• Illinois: 5 business days after delivery of the vehicle and assigned title (625 ILCS 5/3-112(b); People v. Johns, 153 Ill. 2d 436).
• California: 20 days from the vehicle’s first operation in the state (Cal Veh Code § 4152.5).
• New York: 30 days after the transfer of ownership (NY CLS Veh & Tr § 2104; People v. Reyes).
• New Jersey: 10 days after purchase to submit proof and receive certificate of ownership (N.J. Stat. § 39:10-11; Progressive Group v. Hurtado).
• Texas: 30 days for most transactions; up to 45 days for seller-financed sales (Tex. Transp. Code § 501.145; Tex. Tax Code § 152.069).
• Florida: 30 days to apply for a certificate of title; penalties apply for delay (Fla. Stat. §§ 319.22–23)

Noncompliance can lead to civil penalties, tax liabilities, loss of marketable title status, or failure to perfect liens. In some states, late filing may expose the buyer to criminal liability, especially where fraud or evasion is involved. Delays in filing also increase the likelihood of curbstoning-related risks and ownership confusion.

The second way that Title Curbstoning arises is when the state’s threshold for the number of vehicles that can be sold by an individual as a private party has been exceeded within a twelve month period.

States have regulations that are triggered when a private party sells a specified amount of vehicles within a twelve month period. When that happens, it triggers the requirement for a dealer license. These limits are designed to distinguish genuine private sales from unregulated business activity. Once someone crosses that line—by selling multiple vehicles for profit, operating without a license, or failing to follow title laws—they are in violation of state dealer licensing statutes.

Title Curbstoning is illegal for several reasons:

• It circumvents consumer protection laws such as vehicle disclosure requirements.
• It avoids tax and registration obligations, resulting in potential fraud.
• It violates title transfer laws, especially when sellers skip their own registration to avoid being held liable for defects, liens, or legal issues.

States also prohibit the use of dealer-only resources, such as wholesale auctions, by unlicensed individuals. In many jurisdictions, offering even one vehicle for sale without proper ownership documentation may qualify as an illegal sale.

How Many Cars Can You Sell Without a License?

While laws vary by state, most jurisdictions set strict limits on how many vehicles an individual can sell within a 12-month period before being legally classified as a dealer. These thresholds are in place to prevent commercial sellers from bypassing licensing, tax obligations, and consumer protection laws.

Below is a comparison showing the maximum number of vehicles you can sell per year without a dealer license in each U.S. state. Exceeding these limits—or acting in a commercial capacity even under the threshold—may result in fines, criminal charges, or classification as an unlicensed dealer.

State	Maximum Number of Cars You Can Sell
Alabama	4
Alaska	5
Arizona	6
Arkansas	4
California	5
Colorado	4
Connecticut	4
Delaware	4
Florida	2
Georgia	4
Hawaii	2
Idaho	4
Illinois	4
Indiana	12
Iowa	6
Kansas	5
Kentucky	5
Louisiana	4
Maine	5
Maryland	2
Massachusetts	3
Michigan	4
Minnesota	5
Mississippi	4
Missouri	6
Montana	4
Nebraska	4
Nevada	3
New Hampshire	4
New Jersey	0
New Mexico	4
New York	5
North Carolina	5
North Dakota	0
Ohio	5
Oklahoma	0
Oregon	5
Pennsylvania	4
Rhode Island	4
South Carolina	5
South Dakota	5
Tennessee	5
Texas	4
Utah	2
Vermont	11
Virginia	5
Washington	4
West Virginia	5
Wisconsin	5
Wyoming	2

Some states allow zero unlicensed vehicle sales per year, meaning any sale outside of a personal transaction involving a titled vehicle in your name may be considered a violation. States like New Jersey, North Dakota, and Oklahoma fall into this category.

Even in more lenient states, selling multiple cars for profit, skipping title transfers, or advertising repeatedly may subject the seller to penalties—even if they remain under the numeric cap.

Common Red Flags of Title Curbstoning

Buyers may encounter a curbstoner without realizing it. Here are warning signs that suggest a seller may be operating illegally:

• Seller name does not match the name on the title (i.e., “open title” or “jumped title”).
• The seller claims to be helping a friend or selling a family member’s car.
• No fixed business address: cars are listed across multiple online platforms.
• Temporary tags used to extend resale opportunities without titling.
• The seller appears to sell cars frequently but avoids putting their name on any documents.

If a seller avoids paperwork or rushes the sale, it may be a deliberate attempt to avoid legal exposure.

Legal Consequences for Unlicensed Sellers

Selling cars without a dealer license is typically a civil and criminal offense, depending on the number of violations and the presence of fraud. Penalties may include:

• Fines and penalties for each unlicensed transaction.
• Cease and desist orders issued by the state Department of Motor Vehicles (DMV) or Department of Revenue.
• Vehicle seizure if the state determines the seller is conducting business illegally.
• Criminal charges, particularly if tax evasion, title fraud, or deceptive business practices are involved.
• Civil liability if the buyer sues for fraud, misrepresentation, or undisclosed defects.

Additionally, sellers who avoid titling the vehicles in their own names may face title jumping violations, which are also illegal in all 50 states.

Risks to Buyers

Consumers who unknowingly purchase a vehicle from a title curbstoner face several potential problems:

• Undisclosed liens that prevent legal title transfer.
• Salvage or branded titles hidden from the buyer.
• Odometer rollbacks or concealed damage history.
• Void warranties and lack of recourse for repairs or refund.
• Difficulty registering or insuring the vehicle with the DMV—and then who do you turn to? The seller? The original owner who sold the vehicle to the “curbstoner”? Good luck. Even if you retain counsel, and weave through a mandamus action to order the DMV to title the vehicle, that could take months, not days.

In some cases, buyers may be forced to return the vehicle or take legal action to recover damages—often with little success if the seller disappears or cannot be located.

What Buyers Should Do Before Purchasing a Vehicle

To protect yourself from unlicensed sellers:

• Ask to see the seller’s ID and verify it matches the name on the title.
• Run a title history report through the DMV or a service like NMVTIS or Carfax.
• Avoid any sale where the seller won’t sign the title or provide a bill of sale.
• Check if the seller appears to have multiple listings or frequent turnover.
• Contact your state licensing board to report suspected curbstoners.

In Illinois, for example, complaints can be filed with the Illinois Secretary of State’s Police – Vehicle Services Department, which investigates Curbstoning and unlicensed dealer activity.

Conclusion

Title Curbstoning is more than just an informal way to sell vehicles—it is a clear violation of dealer licensing laws and a deceptive practice that leaves consumers exposed to serious legal and financial risks. From hidden liens and false ownership records to denied title transfers and undisclosed damage, the consequences for unsuspecting buyers can be significant and long-lasting.

Unlicensed sellers who operate outside regulatory oversight not only undermine public trust in the used car market but also deprive consumers of the protections guaranteed under state and federal law. States must take stronger action to identify and penalize Curbstoning activity, while buyers must remain vigilant and informed before making any vehicle purchase.

If you’ve purchased a vehicle from an unlicensed seller, suspect title fraud, or have been denied proper ownership transfer, contact FS CORPS immediately. Our legal team is experienced in handling title disputes, illegal sales violations, and Curbstoning-related fraud. We’re here to protect your rights and help hold unlawful sellers accountable.