When you’re buying a car from a dealership, should you sign a power of attorney? A power of attorney is a legal document that is designed to grant another individual the authority to sign certain documents on your behalf. In the context of car dealerships, a power of attorney gives the dealership the authority on your behalf to apply for a title, place a lien, and sign any other documents regarding the titling and financing of the particular vehicle.
Signing a power of attorney with a car dealership may actually be beneficial in many instances. In the event that you are buying a car out of state or from a distant dealer, you will likely not be present to sign additional paperwork that may have been missed or to resign documents that may have errors. A power of attorney can allow the dealer to handle all of these details for you. This is especially helpful if you live in an area where there are limited dealerships, and it’s more convenient for you to buy from one far away. However, it’s important to note that this signature gives the dealer power to do anything that needs signing in relation to your vehicle purchase. You’ll want to make sure that you’ve read any documents they present to you thoroughly before signing this document.
While power of attorney shouldn’t be taken lightly, it’s very commonly used by dealerships as a convenience to its customers. By signing a power of attorney with a dealership, they can obtain all of your tag and title documents on your behalf to keep you from having to go to the DMV. They’ll also sign the original title over to you and then process the paperwork so you can drive off and enjoy your new car or truck. For most people, this is simply a matter of convenience, but there are some things that you should take into consideration before signing any documents.
#1: How long has the dealership been in business?
Do they have a good, longstanding reputation with their community? While a brand-new car dealership isn’t a red flag by itself, it could be if it’s in combination with other factors. For example, all vehicle dealerships have to be licensed in their state or jurisdiction. If they’re not licensed, or claim licensing to be in progress, do not sign a power of attorney.
#2: Who owns the dealership?
If you’re signing a power of attorney, it’s important to know who is behind the dealership with this authority. You can research any business through your Secretary of State’s website, or the Secretary of State’s website in the state where the dealership is located. Most SoS databases will provide business names, addresses, principal names, registered agent names, and annual filings. With this information, you can cross-check the history of the owners and directors.
#3: Is a power of attorney really necessary for your purchase?
Most dealerships request that you complete a power of attorney for your and their convenience, but it’s important to know that it is not required. You are not required to sign away power of attorney to a dealership if you do not feel comfortable doing so. If you trust the dealership and would like to have this convenience, then it is up to you to decide if the power of attorney is necessary.
A power of attorney can be a great convenience in certain situations, but it is not required. Before signing a power of attorney, make sure you thoroughly read through the fine print and conditions of the document. If you are concerned about signing a power of attorney, consider getting legal advice before proceeding. The dealership may be asking for power of attorney, but you have the power to approve or deny it.
Have more questions?
Contact one of our legal experts and get the help you need. Click here to schedule an apt today.