AZ makes millions off towed vehicles

Thousands charged for ‘abandoning’ vehicles

When Letisha Schmidt’s grandmother died nine years ago, she left Schmidt a 1992 Chevy S10.

She didn’t realize how much the worn-down truck meant to her until a towing company took it, and eventually sold it. Now, she has no truck and she owes the Arizona Department of Transportation a $500 abandoned vehicle fee.

Schmidt is one of thousands of people each year who find themselves in a strange situation: owing the state hundreds of dollars for “abandoning” their vehicle because they couldn’t afford to get it back from a tow yard.

The tow company can profit from selling their car, then ADOT charges the owner $500 for abandoning the vehicle. The state keeps 80% of the mon

ey and gives 20% to the towing company.

Some in the legal system say the fee is disastrous for low-income residents on top of losing their mode of transportation.

“Obviously $500 is a pretty big obstacle, especially to somebody who’s not able to pay to get a vehicle out of impound to begin with,” Alex Benazra, a public defender with Phoenix’s suspended license court, said. “For a lot of people, it’s impossible.”

The state and private tow companies are making millions of dollars a year off of the fee. It has brought in about $36 million to the state and $9.8 million to tow companies since 2010.

Vehicles are towed for a variety of reasons — illegal parking, breakdowns, accidents and arrests among them.

In Schmidt’s case, the tow company took her truck in June 2017 when she was arrested on suspicion of criminal charges. The charges were later dropped, but Schmidt spent eight days in jail.

Once she was out, she realized her registration had expired two days before she was released from custody. She needed to pay $425 to renew it before she could get the truck back from the tow company, and by then the towing fee had gone up to $495. Each day, the company added $30.

She tried for more than a month to get it back.

“Then I got a letter in the mail saying they got the title of the vehicle,” she said. “It was so sentimental to me ... To this day, I am devastated over that.”

And then she was hit with the ADOT fee.

How does the abandoned vehicle fee work?

Say somebody leaves their car on the side of the road. A private towing company comes and picks it up at the owner’s expense. The owner must pay the company to get the car back. If they don’t, the company can sell the car or junk it.

That’s the case in many states, including those neighboring Arizona, such as Utah and New Mexico.

But Arizona has one more layer of costs.

If the owner doesn’t retrieve or give up their vehicle within 30 days, it is considered abandoned and ADOT charges the owner an abandoned vehicle fee. And if the owner can’t pay that fee, the state can take their license.

Benazra said about a quarter of his clients have their license suspended because of an abandoned vehicle fee.

Until they pay the $500 fee in full, drivers cannot renew their license or register new vehicles under their name.

How to get around the fee

Often the most cost-efficient way to get around the abandonment fee is to give up the title of the vehicle to the towing company that picked it up before the 30 days is up.

“That puts people in a really bad choice to have to make,” Benazra said. “Do I literally give up my vehicle and avoid having to pay that fee or do I scrounge up the money to be able to pay it?”

There’s not much courts can do to help clients with an abandoned vehicle fee, Benezra said. He usually encourages them to seek an agreement with the towing company.

But, as Schmidt learned, that’s not necessarily easier.

Each day her truck sat in the lot, TriCity Towing in Chino Valley charged her $30. At one point, it would have cost her $495 to get her truck back. By the time she sold her second vehicle to try to raise enough money to get it back, it increased to more than $1,000.

“The fees were killing me; they made it impossible for me to keep up,” she said. “I didn’t abandon my truck. Since the day they took it, I tried to get it back.”

Tri-City Towing denied her request to do a payment plan for the fees, she said.

After 30 days, Tri-City Towing claimed her vehicle as abandoned and put it up for sale. She tried to buy it from them, but the company denied her because the truck was being sold for less than she owed, she said.

The truck sold for $800.

Now Schmidt has no truck, and owes the Arizona Department of Transportation $500. Part of that payment will also go back to the towing company.

Defining what ‘abandoned’ means

According to the Arizona Department of Transportation, the fee is meant to discourage people from leaving unwanted vehicles on public and private land.

Arizona law defines an “abandoned vehicle” as “a vehicle, trailer or semi

trailer that is of a type subject to registration ... whether lost, stolen, abandoned or otherwise unclaimed and that has been abandoned on a public highway, public property or elsewhere in this state, including private property.”

But Schmidt doesn’t consider her vehicle abandoned.

“I didn’t abandon my truck,” she said. “I tried every day for two months to get it back.”

Rhesha Marquez doesn’t consider her vehicle abandoned, either.

In January 2017, Marquez was arrested in Navajo County for driving on a suspended license. The single mother of four spent a night in jail. Once she was out, she realized her vehicle had a 30day impound hold.

Marquez claims she tried to surrender the title once she was made aware that she’d be responsible for an abandoned vehicle fee.

The Arizona Motor Vehicle Division had no record of that. So like Schmidt, she lost her vehicle and was charged the $500 fee.

For a part-time minimum wage worker with kids, that was a lot to come up with, she said.

“Even though I really wanted my car back, I just couldn’t pay the money,” she said. “I didn’t abandon it.”

How long has this fee existed?

Before 2010, the abandoned vehicle fee in Arizona was $50. In 2010, the Arizona Legislature allowed the director of the Arizona Department of Transportation to raise the fine amount.

In the bill, the Legislature said ADOT could collect just above $12 million a year from the fee.

According to Michael Braun, executive director of the Arizona Legislative Council, the amount specified in the intent clause is non-binding, meaning the director of ADOT could have increased the fee, lowered it, or kept it the same.

The director chose to increase it tenfold.

“The director has the ability to set it as they see fit and the Legislature expressed its intent that the amount that is raised should not exceed just over $12 million,” Braun said.

According to Braun, had the Legislature required ADOT to raise fees, it would have required a two-thirds vote in the Legislature. Allowing agency directors to raise them is a way around that process.

ADOT spokesman Doug Nick said the fee was intended to increase revenue in light of funding gaps in that particular fiscal year. Though the fine cap is legally non-binding, Nick said lawmakers were depending on ADOT to bring in more revenue.

“The budget needs of that year were such that legislative authority was granted to ADOT to reach budget projections for that year,” Nick said. “Once those fees were set and codified into law, it requires legislative action to have them changed.”

Since the 2010 fiscal year, ADOT has cited an abandoned vehicle fee 167,000 times and collected a total of $45.4 million from these fees. Of that, 80% goes to the State Highway Fund and 20% to towing companies.

The State Highway Fund pays for construction of state roads, highway patrol, and salaries and wages of ADOT employees.

‘Probably the biggest struggle of my life’

Jesus Cuevas, of Phoenix, didn’t even know he still owned the vehicle he was accused of abandoning.

In 2018, he sold the car and assumed the new owners would change the title to their name. Cuevas doesn’t know what led to that vehicle being towed, but two weeks later he got a letter to his address saying he owed ADOT $500.

“It stuck on to me after that,” he said. “I couldn’t find any way around it.”

A few weeks later, his license was suspended because he didn’t pay the fee. His residency card expired soon after and he wasn’t able to get it renewed until the fine was paid.

Then, he couldn’t renew his license until his residency card was renewed, which he said cost him $2,000.

“Probably the biggest struggle of my life,” said Cuevas, an immigrant from Michoacan, Mexico.

Now, a year later, he has paid his fee and gotten his license renewed.

Marquez was able to pay her fee with her tax return.

Schmidt still owes her fee, but later bought another vehicle and registered it under a friend’s name. She watches a neighbor drive around in her late grandmother’s truck.

“I still miss that car,” she said.