I think you are right. As long as it is not titled they can sell it as new. Also, if the dealership doesn't report this to their insurance it probably won't show up in carfax either. My bet is they probably will just tow it to the dealership and fix it themselves and sell it as new (Probably fire the sales guy as well), or maybe just donate the car to a local collage or HS with a body repair class. I know long ago when I worked for a Honda dealership that is what they did with two cars that were damaged during transport. They just donated it to the local community collage and then it bacame a tax write off

 

The laws on this vary, of course, from state to state. You also have what are called " program " cars..cars that are company-owned and driven for a time and never officially titled, but are later sold at reduced prices.

I like the tax-donation idea myself. I myself, in the past, have suggested that local dealerships donate new, virtually new vehicles, or vehicles that have been repaired in the manner you speak of to charity groups that need vehicles to do their work...like companies that come around to your house and pick up things, for example.......so they can take tax write-offs. I don't know how many local dealersips have actually taken the idea and done so. For one thing, they gain only the value of the taxes they would have paid on it, not the value of the whole vehicle.