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What Do We Do When We Repair a Customer’s Car But They Take the Insurance Money and Run?

A customer brings their car in for repair, we repair the car, the customer gets the check for the repairs from their insurer and then keeps the money. We have the car, but the “buy here-pay here” dealer is trying to get the court to order us to turn the car over to them even though the car is in the owner’s name. We asked the dealer to pay us and they refused. What recourse do we have?

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Writer Charlie Barone has been working in and around the body shop business for the last 35 years, having owned and managed several collision repair shops. He's an ASE Master Certified technician, a licensed damage appraiser and has been writing technical, management and opinion pieces since 1993.

A customer brings their car in for repair, we repair the car, the customer gets the check for the repairs from their insurance company and then keeps the money for personal use. We have the car, but the “buy here-pay here” dealer is trying to get the court to order us to turn the car over to them even though the car is in the name of the owner. We’ve asked the dealer to pay us and they have refused to do so. What recourse do we have?

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Asked by Otto Beatty, Robinson Body Shop, Columbus, Ohio.

The insurance company should have put the settlement check in the name of the customer and the finance company (or used car dealer), which would have prevented this from happening.

That not being the case, the shop has possession of the car, regardless of whose name it’s registered under. The encumbrance on the title will usurp any claim you may have, so the lender’s debt has priority. You should hold the car inside or within a gated compound so no one can just take it after hours. The customer and the money for the repair is probably a lost cause. He’s bad news by virtue of having to purchase a vehicle from that type of dealer (buy here-pay here). Once your storage rate exceeds the value of the car, you can use it for parts, but you’ll never get the title.

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