The new bill would prevent the DMV from making millions off auctioned cars without notifying the owners

from Bironda LyonsCalMatters

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State lawmakers have pushed legislation that would change a decades-old state law that allows the Department of Motor Vehicles to receive millions of dollars from auctioned cars without telling the owners.

The bill by Republican Sen. Murrieta Kelly Sejarto follows directly CalMatters reportwhich revealed that the DMV collected more than $8 million from nearly 5,300 cars auctioned from 2016 through the end of 2024 without having to notify owners that their towed cars had been sold for surplus.

“The article raised concerns that the process for recovering surplus funds after a foreclosure sale is opaque and many people don’t know if the sale even resulted in surplus money,” according to an analysis of the bill written for the Senate Transportation Committee.

State law it doesn’t require the agency to tell people they can claim their money and after three years the owners lose their right to the money.

Warehouses, towing companies, and auto repair shops can auction off vehicles when owners fail to pay and repossess their vehicles. The auctions are known as pawn sales.

The legislation would require the department to notify owners within 14 days of receiving the excess, detailing the amount and how the owner can claim the money. The notice will also be required to be sent by registered mail with return receipt requested.

In an analysis of the bill, Seyarto said it closes “a serious consumer protection gap in California’s lien sale process by ensuring that vehicle owners are actually notified when the state holds excess auction proceeds that belong to them.”

The bill has no registered support or opposition, according to the account analysis.

Withdrawals and compounding fees can be a debt trap. The police can pull over your car for things like registration expiredbut you may not be able to get it back if you can’t renew your registration because you have outstanding fees and fines from things like traffic and parking tickets. People who can’t afford the fines and fees often leave their vehicles at warehouses, which can sell the car to recoup the costs through a pawn sale.

Before the CalMatters report, there was no easy way for people to know they had money, and no easy way to claim it. After our initial story, however, the department copy tool CalMatters to help people claim their money. It is now available on the DMV website. The website also includes an FAQ on how to claim your money.

A hearing on the bill is scheduled for Monday in the Senate Appropriations Committee.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.