The bill would require the DMV to tell vehicle auction companies when a car is about to be sold

California lawmakers have proposed legislation that would require the Department of Motor Vehicles to notify vehicle auction companies before selling a car at auction. The bill aims to give auction owners a chance to reclaim vehicles before they are sold to the public. Currently, the DMV can sell vehicles without notifying the auction company that originally handled the sale, which can leave auction owners unable to recover their property or resolve outstanding issues with the vehicle.

This proposal addresses a gap in how the DMV handles vehicles that come into its possession. When a car ends up in DMV custody — typically because of unpaid fees, abandoned status, or other violations — the agency can move to auction it without alerting the business that may have a financial or legal interest in the vehicle. The bill would change that process by requiring advance notice.

Key Takeaways

  • The proposed bill would require the DMV to notify auction companies before selling a vehicle at auction, giving them time to claim the car.
  • Auction companies currently have no formal way to know when a vehicle they handled is about to be sold by the DMV.
  • The bill addresses situations where auction companies may have unpaid fees, liens, or other claims against a vehicle in DMV custody.
  • The notification requirement would explore before the DMV lists a vehicle for public auction, not after the sale is complete.

Why auction companies need advance notice

Vehicle auction companies handle thousands of cars each year. When a car passes through an auction house, the company may have financial claims against it — unpaid auction fees, storage costs, or repair expenses. If the DMV sells that vehicle without notifying the auction company, the company loses the chance to recover those costs or resolve the transaction properly.

An auction company might also discover that a vehicle in DMV custody was sold to them under false pretenses, with a title defect, or with undisclosed damage. Advance notice gives the company time to investigate and take legal action before the vehicle is sold again to a new buyer. Without notification, the auction company's only option is to track down the vehicle after it has already been sold, which is often impossible.

How the notification process would work

Under the proposed bill, the DMV would be required to identify the auction company associated with a vehicle before moving it to auction. The agency would then send notice to that company, typically by mail or email, informing them of the planned sale date and giving them a set period to respond — usually 10 to 30 days, depending on how the final bill is written.

The auction company would then have the option to claim the vehicle, pay any outstanding DMV fees, or file a claim against the sale. If the auction company does not respond within the notice period, the DMV would proceed with the public auction as planned. This process mirrors notification requirements that already exist in other states and in federal vehicle disposal programs.

What happens if an auction company claims the vehicle

If an auction company responds to the DMV's notice and claims the vehicle, the company would typically be required to pay any fees the DMV has assessed — such as storage, towing, or administrative costs. Once those fees are paid, the auction company would regain possession of the car and could handle its disposition however they choose, including returning it to the original owner, selling it themselves, or scrapping it.

This outcome protects both the DMV and the auction company. The DMV recovers its costs, and the auction company avoids losing a vehicle that may have value or outstanding claims attached to it. The vehicle does not enter the public auction market, which can reduce administrative burden on the DMV as well.

Current gaps in DMV notification practices

Today, the DMV has no legal requirement to track down or notify the auction company that originally handled a vehicle. In many cases, the DMV may not even know which auction company was involved, especially if the vehicle changed hands multiple times or if records are incomplete. This creates a situation where auction companies discover their vehicles have been sold only after the fact, if they discover it at all.

The lack of notification also means auction companies cannot challenge the DMV's decision to sell a vehicle or dispute whether the car was legally in the DMV's custody. They have no opportunity to present evidence that they have a valid claim to the vehicle or that the DMV's fees are incorrect. The proposed bill would give them that opportunity before the sale is final.

Scam alert: Fake DMV auction notices

If you receive a notice claiming to be from the DMV about a vehicle auction, verify it directly with the DMV before responding. Scammers sometimes send fake auction notices to auction companies, claiming a vehicle is about to be sold and asking for payment to prevent the sale. They may use official-looking letterhead or email addresses that closely resemble real DMV contact information.

Always contact the DMV directly using the phone number or website on the official DMV website — not a number provided in the notice itself. The real DMV will never ask you to wire money, send gift cards, or pay fees through unusual payment methods. If you are unsure whether a notice is legitimate, call your local DMV office and ask them to verify the vehicle and the notice.

What this bill does and does not change

The proposed bill is narrowly focused on notification only. It does not change the DMV's authority to sell vehicles, does not extend the time the DMV must hold a vehicle before auction, and does not create new rights for auction companies beyond the right to be notified. The bill also does not affect vehicles that come into DMV custody for other reasons, such as abandoned vehicles or cars seized for unpaid registration fees — only those that passed through an auction company.

The bill also does not require the DMV to search for auction companies if records are unclear or missing. Instead, it requires notification only when the DMV can reasonably identify the auction company from available documents. This keeps the requirement practical while still closing the gap for most vehicles.

Frequently Asked Questions

Does this bill affect me if I bought a car at auction?

No. This bill applies only to auction companies, not to individual buyers. If you bought a car at a public auction and it later came into DMV custody, this bill would not change your rights or notification status.

What if an auction company ignores the DMV's notice?

If an auction company does not respond within the notice period, the DMV proceeds with the public auction as normal. The company loses the chance to reclaim the vehicle, but the DMV is not required to take further action.

Does the bill require the DMV to search for auction company contact information?

The bill typically requires notification only when the DMV can identify the auction company from existing vehicle records or documents. It does not require the DMV to conduct extensive searches or hire investigators to track down auction companies.

Can an auction company dispute the DMV's fees?

The bill gives auction companies the right to be notified and to claim the vehicle, but it does not create a new process for disputing DMV fees. Auction companies would still need to follow existing procedures to challenge fees, such as filing a formal appeal with the DMV.

When would this bill take effect if it passes?

The effective date would be set in the final bill language. Typically, DMV notification requirements take effect 30 to 90 days after the governor signs the bill, giving the agency time to update its systems and procedures.