Backing Out an MCO

Under certain circumstances, the New Jersey Motor Vehicle Commission (NJMVC) will permit a record to be cancelled from the database. The procedure is commonly referred to as “Backing Out an MCO.” All parties must state that delivery of the vehicle did not occur in order to clear the record and return the vehicle to “new car” status.
 
Requirements:
  • This is a time sensitive process. The NJMVC Special Title Unit must receive the paperwork within thirty (30) calendar days of the date of issuance listed on the front of the title.

  • The originating dealership on the front of the MCO, any subsequently assigned dealership(s), and the purchaser of the vehicle must all provide letters to “Back Out an MCO.”

  • When applying for an MCO Back Out, the original title must be submitted without a VIN (Vehicle Identification Number) prefix. If the title indicates a VIN prefix, the record will not be cleared from the NJMVC system.

  • After receiving written confirmation from the NJMVC acknowledging cancellation, the original dealership on the front of the MCO must apply for a duplicate MCO from the manufacturer.

  • The license plates may be transferred to another vehicle purchased by the same owner. In lieu of transfer, the owner may apply for a refund by submitting the unused plates along with a refund application to the NJMVC Refund Unit. Do not surrender the license plates.
 
EXCEPTIONS
  • Until the incorrect record is cleared from the NJMVC system, subsequent transfer of ownership cannot occur. A vehicle is “in limbo” during the MCO Back Out procedure, as the timeframe of the process far exceeds the term of a Temporary Dealer registration tag. Dealerships are advised not to sell the vehicle until the MCO Back Out procedure is finalized.

  • If the request for cancellation is received more than thirty (30) days after the issue date listed on the front of the title, NJMVC will issue a title in the selling dealership’s name. Subsequent sale of the vehicle will result in a prefix to the VIN, indicating a previous owner.


REQUIRED PAPERWORK

    ** Original Notarized Statement from the originating dealership (if other than the selling dealership) must be as follows:
  • On dealership letterhead.
    		•
  • Full description of vehicle including year, make, model and complete VIN.
    		•
  • State the date and mileage at the time the vehicle was signed over to subsequent dealership.
    		•
  • Signature and title of dealership officer.
    		•

    ** Original Notarized statement from the selling dealership must be as follows:
  • On dealership letterhead.
    		•
  • Full description of vehicle including year, make, model and complete VIN.
    		•
  • State why the sale was not consummated (i.e., financing arrangements were not consummated, customer changed mind, different vehicle purchased—list that vehicle) and give the titled owner(s) name.
  • State the vehicle never left the showroom; was never driven on public streets or highways.
    		•
  • State current mileage on vehicle (exactly as it reads on the title).
    		•
  • Signature and title of dealership officer.
    		•

    ** Original Notarized statement from titled owner(s)/lessee as follows:
  • On plain paper or owner’s stationary, if an individual.
    		•
  • On business stationary, if a company is the titled owner.
    		•
  • Full description of vehicle, including year, make, model and complete VIN.
    		•
  • State why the sale was not consummated (i.e., financing arrangements were not consummated, customer changed mind, different vehicle purchased—list that vehicle).
    		•
  • State the vehicle was not operated by the owner or his/her agent on public streets or highways.
    		•
  • Signed by titled owner (no POA accepted).
    		•

    ** Original Notarized Statement from Leasing Company, if applicable, as follows:
  • On Leasing Company letterhead.
    		•
  • Full description of vehicle including year, make, model and complete VIN.
    		•
  • State why the sale was not consummated (must match the reason stated in the dealership’s letter and specify vehicle).
    		•
  • State the vehicle was not operated by the owner/lessee or his/her agent on public streets or highways.
    		•
  • Signature of officer, printed name and title of Leasing Company representative.
    		•

    ** Original Notarized Lien Release, if applicable, as follows:
  • On lienholder letterhead.
    		•
  • Full description of vehicle, including year, make, model and complete VIN.
    		•
  • State the incorrectly titled owner(s) name.
    		•
  • State the lienholder has no financial interest in the vehicle.
    		•
    NOTE: The title may reflect satisfaction of the lien in lieu of a lien release letter.

          ** Indicates sample letters follow.

    TIP IN ORDER TO EXPEDITE AN MCO BACK OUT, submit a notarized copy of the front and back of the original MCO that was originally presented to the NJMVC.

    NJ CAR suggests contacting the Title Services Division for assistance when faced with the prospect of an MCO Back Out.

    NJ CAR Title Services
    770 River Road, 2nd Floor
    Trenton, NJ 08628
    Phone: 609.883.6683, Ext. 4

    Dealerships also have the option of sending the appropriate documents for an MCO Back Out directly to NJMVC at the address below. Due to privacy regulations, NJ CAR is unable to obtain information on the status of documents submitted directly from a dealership to the NJMVC.

    New Jersey Motor Vehicle Commission
    Special Title Unit
    225 East State Street
    P.O. Box 017
    Trenton, NJ 08666-0017

    TIP IN SOME SITUATIONS, AN “OWNERSHIP CORRECTION” procedure is applicable rather than the “MCO Back Out” procedure. The “Ownership Correction” procedure requires a contract or other documentation pre-dating the title issue date, to substantiate the identity of the vehicle’s owner. Information regarding “Ownership Correction” is available from the NJ CAR Title Services Division. (See contact information above.)
    TIPS TO PREVENT MILEAGE ERRORS Double check the odometer statement to be certain it matches the VIN of the vehicle in hand. Often the odometer statement of the trade vehicle is filed in the same deal jacket as the new purchase, making it easy to confuse the mileage.

    Never change ownership if the mileage is questionable. The correction process becomes more complicated with each change of ownership. If a mileage error occurred prior to the current titled owner, the title must be sent to the NJMVC’s Database Correction Unit with notarized Odometer Statements, even if the initial error was due to an NJMVC typo.

    Write clearly. If the microfilm image of mileage is questionable, a branch Agency will not be able to correct it. Does your “3” look like an “8” or “2,245” looks like “21245”? If so, the title must be sent to the NJMVC’s Database Correction Unit with notarized Odometer Statements, further delaying the correction process.

    Question odometer statements that list rounded numbers as “actual” mileage. Perfect numbers are usually a tip that the customer guessed at the mileage, so it’s worth the effort of having someone check the actual odometer of the vehicle.

    Below are a checklist and template letters related to an MCO Backout. Please contact Title Services at (609) 530-2808 or titles@njcar.org with any questions.

 
Checklist for MCO Backout
 
MCO Backout Template Letters
 
















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