41-3-402. Payoff of liens on motor vehicles traded in.
(1) If a dealer takes a trade-in from a retail customer as part of the sale or lease of a
motor vehicle and there is an outstanding loan balance owing on the trade-in, then the dealer,
within 21 calendar days of the date of sale or lease, or within 15 calendar days of receiving
payment in full for the motor vehicle it sold, whichever date is earlier, shall remit payment to the
lienholder sufficient to pay off the lien on the traded in motor vehicle, unless the underlying
contract of sale or lease contract has been rescinded before expiration of the 21 days.
(2) A lienholder who has been paid in full by a dealer in accordance with the terms of
this section shall deliver to the dealer a properly executed title that releases the lien within:
(a) one business day after the business day on which the funds are received when the
funds are in cash, cashier's check, certified check, teller's check, or other certified source of
funds;
(b) three business days after the business day on which the funds are received when the
funds are in the form of a check drawn on a local originating depository institution; or
(c) six business days after the business day on which the funds are received when the
funds are in the form of a check drawn on a nonlocal originating depository institution.
(3) If the final day for performing an act under this section falls on a Saturday, Sunday,
or a legal holiday, then the time for performance is extended to the immediately following
business day.
(4) A dealer's failure to comply with the provisions of this section subjects the dealer to
the sanctions set forth in Section 41-3-701.
(5) A person who trades in a motor vehicle to a dealer and who thereafter sustains loss or
damage as a result of a dealer's failure to pay off a properly recorded lien on the traded in motor
vehicle within the time specified by Subsection (1)(b), may bring an action against the offending
dealer to recover damages proximately caused by the dealer's failure to comply with the
provisions of this section, together with costs and reasonable attorneys' fees.
Amended by Chapter 108, 2006 General Session
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Last revised: Wednesday, July 23, 2008