Evening star., 1939-03-19
NEWS OF THE MOTORING WORLD
Recording of Automobile Liens Should Be Required Traffic
Bureau Keystone W. A. T. A. Unite Protect BUYERS
By G. adams Howard.

By G. adams Howard.
Liens on automobiles may sound
like just another loan to many resi-
dents Of the District Of Columbia.
but to the buyer Of secondhand
machine. who later finds his title is
not clear, the matter is very dis
tressing, to say the least.
The trouble appears to lay in the
fact that the Traffic Department
does not have complete list Of these
business transfers on cars. Many
filed at the recorder Of deeds ofIice
are unknown to the TRAFFIC Depart
ment. the one place where the record
really belongs.
The average person does not think
Of the recorder Of deeds when in
vestigating the title of his prospec-
tive purchase. He inquiries at the
Traffic Department and If no lien Is
shown there he Is satisfied that the
title is clear. Consequently. thou
sands Of dollars are lost annually to
Washington motorists.
To correct this situation Senator
King last year introduced a bill re-
quiring all liens be recorded in the
Traffic Department to establish a
record of all automobile loans. The
Senate passed this measure. 1t now
has been introduced In the House.
At present it is up to Representative
Schultz to call a hearing. This should
be done at once and the bill should
be passed in the near future. The
Traffic Department is the place for
all records pertaining to automobiles.
There is no other way to correct
the evil. Crooked dealings must be
stopped and innocent car buyers
must be protected. The American
Automobile Association, the Key
stone Automobile Club and the
Washington Automotive Trade As
sociation are united In their efforts
to do this.
The following is what the Ameri-
can Automobile Association believes,
according to Washington I. Cleve-
land. manager Of the District of Co.
lumbia division of the A. A. A., and
his explanation.
There Is pending before the House
and Senate District Committees H
r. 1850 and Senate 1896. being bills
to establish in the Traffic Bureau
an office of records for the record
ing OF automobile liens. At the pres
ent time the record of chattel mort
cages. deeds of trust and conditional
sales contracts to be of valid notice
to third persons must be recorded in
the Office Of the recorder of deeds of
the District of Columbia. who
charges fee of 81 so for recording.
and like sum for releasing. In
view OF this high charge a large
number of firms who are engaged in
financing motor vehicles in the Dis
trict Of Columbia do not record their
papers covering transactions, but set
up on their books as a reserve the
sum Of S1.50 for each transaction,
and then in the event of the prop
erty getting into the hands of an
innocent third person, they simply
charge any loss they sustain againss
the reserve, and by handling it in
this fashion the account shows them
a satisfactory profit.
The certificate of title on motor
vehicles issued by the District Of
Columbia is nothing more than a
guarantee that the automobile de-
scribed therein has not been stolen.
While the lien Is mentioned on the
certificate, it distinctly states that
as the department is not an Office
of record, the lien is not guaranteed.
Due to this situation it is possible
for innocent third persons to suffer
considerable embarrassment and
loss of money. The following is a
suggested illustration of how such
losses occur under the existing
situation:
John Brown buys a motor vehicle
for $500 from the Jones Motor Co.
He pays $275 down, which leaves a
balance OF $525; to this is added the
fees for credit investigation, settle
ment, notary, fire. theft and COL
lision insurance, which totals SIS,
or grand total of $500, which Mr..
Brown agrees to pay in IL monthly
notes of $50 each.
This lien is duly entered on the
certificate of title. and in the ma
jority OF cases the title is held by
the lien holder, generally an auto
mobile finance company. At the
end of six-month period Mr.. Brown
is unable to meet his obligations and
needs some ready cash; so he goes
out and borrows $3.50 on the motor