What must a dealer do if a customer has financed a vehicle?

When a customer finances a vehicle, the dealer holds the title until the financing has been fully paid off. This is a standard practice because the title serves as proof of ownership and is typically issued to the financier until the loan is satisfied. The financier uses this arrangement to secure their interest in the vehicle, meaning they have a claim to it until the borrower completes all payments. Therefore, holding the title until the customer has paid in full ensures that the dealer and the financing entity can retain control over the vehicle as collateral for the loan.

In financing situations, providing a temporary tag, refunding the customer, or reporting the sale to the DMV may still be part of the sales process but do not directly address the crucial aspect of securing ownership through the title. The primary concern is the lender's lien on the vehicle, which is why the title is held until the financial obligation is fully met.