Maybe you have stopped to think at some point what happens with vehicles that are impounded, right? Well, for years, the California Department of Motor Vehicles (DMV) has kept millions of dollars from the sale of these cars, which, once impounded, are auctioned off without their owners knowing that they can claim the money that belongs to them!
Everything has come to light after a long investigation and, as a result, the agency has launched an online tool so that those affected can check if the state owes them money… But it is something that has been happening for years!
How does that happen?
The DMV impounds cars that accumulate fines or similar, and if no one claims them, it puts them up for sale, either at auction or through lien sale (understood as abandoned cars). But the original owners of the vehicles do not know what happens with their cars once the DMV takes them, and much less were they aware that there was lost money!
How the tool works
The system is available on the official DMV website, and it is enough to enter the identification data and, in seconds, the user can know if they are entitled to a refund. In addition, it includes a frequently asked questions section and clear instructions to guide the process.
What is a “lien sale”
In California, workshops, car lots and towing companies can sell an impounded vehicle to recover storage and service costs, and that is the concept of “lien sale”.
Most of the time these sales barely cover the accumulated debts, but there are other cases where the value of the car exceeds what is owed, and that extra money should go to the original owner!
The money retained by the DMV
Between 2016 and 2024, the DMV collected more than 8 million dollars through about 5,300 auctions of this type. And although many do not know it, by law, owners had three years to claim the money, but the DMV did not notify them or give them a clear option to do so.
The case of Stephen McAllister has been one of the most notorious, after his sister’s hospitalization, the family car accumulated fines and ended up in a lot. The debt went over 8,000 dollars and the vehicle was sold at auction, as is usually done. When he tried to claim the surplus, the DMV rejected his request!! And finally, after fighting hard, the DMV admitted the error and returned the money to the family.
The key changes
- Before: the DMV did not inform about the available funds.
- Now: there is an official search tool and step-by-step guides to claim.
- Owners still have three years from the sale to recover the money.
The impact on the most vulnerable
As always, this system always hits those who have the least, since a fine for bad parking or for an expired plate can turn into a chain of fees and charges that make it impossible to recover the car if there is no money to pay them…
The sale of the vehicle not only means losing a means of transportation needed to work or take children to school or go to the doctor, but until now it also meant losing the surplus money from the auction.
But this platform changes everything, if you have a vehicle impounded, now you will be able to know if they owe you money, or at least you will know what happened with your vehicle, in a transparent way!