Summary
SB-1029 will require the Department of Motor Vehicles (DMV) to notify the registered owner whose car has been sold through a lien sale, within 14 days of receiving the lien sale proceeds, explaining what funds are available and how to file a claim.
Background
Californians whose vehicles are towed and sold through lien sales often discover that auctions generated proceeds exceeding the outstanding lien amount, however, they may never know money is owed to them. Between 2016 and 2024, the California DMV accumulated over $8 million in unclaimed proceeds from vehicle auctions. Some auctions generated substantial surpluses: an abandoned Lamborghini Murciélago Roadster yielded nearly $100,000, a Ford F-150 left $14,232, and a Honda HR-V generated $5,475.
The lack of proactive notification creates significant barriers for vehicle owners seeking their rightful funds. In one documented case, a family discovered that after their vehicle was auctioned, the DMV owed them $5,475 in surplus proceeds, but the family only learned this after an extensive legal investigation. Without notification of the auction process and clear deadlines, owners risk permanently losing money that belongs to them. Under existing practices, vehicle owners have limited information about whether their vehicle was auctioned, the sale price or auction date, surplus proceeds available for claim, or the deadlines to claim funds. Many owners discover this information only if they proactively contact the DMV to inquire, placing the burden entirely on the owner to navigate the claims process within the statutory timeframe.
The current system creates unintended consequences: already-stretched California families potentially never reclaim their funds because they are unaware money is owed to them. This current gap in the system undermines consumer protection and leaves owners vulnerable to financial loss.
Proposal
SB-1029 will enhance California consumer protections by requiring the DMV to send certified notice within 14 days of receiving lien sale proceeds, explaining the funds available and how to file a claim, before depositing any remaining revenue into the Motor Vehicle Account.