Can a car dealer report a car stolen if the down payment check bounced?

UPDATED: Oct 1, 2022

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Can a car dealer report a car stolen if the down payment check bounced?

In California we purchased a vehicle from a major dealer with 5K down in a personal check. The check bounced. The car was still financed. We received the welcome package from the financing company and as far as they are concerned everything is ok. At the same time we received a letter from the dealer stating that they will repossess the vehicle. But they did not repossess it until now. We drove the car home 2 months ago. We received the new registration from DMV, the car is registered under our name. We suspect that the financing company does not even know about the bounced check.
We believe that the dealer received 22K from the financing company.
Can the dealer report the car stolen?
Will LAPD honor the dealer’s request and report the car as stolen?
If we drive a car that is registered under our name, and we get pulled over because it was reported stolen, will we be arrested?

Asked on January 12, 2019 under Criminal Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

There is no definitive answer. A car is not stolen if you provide a check in good faith, believing it will be honored, but failed to properly balance your check book or did not get some income when you reasonably thought you would and so it bounced. In that case, if the dealer is not paid, they could look to reposses the car and/or sue you for the money, but you committed no crime, because you did not have a criminal intent or "mens rea."
But if you knew that the check would bounce--if the evidence shows that you knew--then it was theft, because theft can be committed by deception as well as by simply taking something. It could also have been criminal fraud, as well as the crime of passing a bad check. So the issue is what to the circumstances show about your knowledge, at the time you provided the check, as to whether it would be honored or dishonored.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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