Angela Benavides bought the 2001 Ford Explorer on Sunday and went to register it at the DMV on Monday.
A clerk ran a stolen car report, which the DMV is required to do, and it came up reported stolen.
Benavides was taken in one of the back rooms and questioned by police.
She says thanks to having the proper paperwork she was let go, but the car was impounded.
Benavides, "Anger then set in because I didn't have a car and was out 11-thousand dollars."
DMV Spokesman, Tom Jacobs, says by law the DMV has to impound the car.
He says what made this situation unusual is that all the proper paper work was in place.
Jacobs, "Through all the transactions there was a valid title. And we checked and the title is good."
Benavides eventually got her money back.
It turns out the owner, in New York City, had reported the car stolen. But, didn't realize instead, it had been repossessed by the bank.
The matter was never cleared in the system until Thursday.
The dealership was able to get their car back from the impound lot, and Benavides say she's learned a valuable lesson.
Benavides, "Before you buy the car run the VIN number through the DMV to make sure it isn't stolen. Otherwise, you'll have to go through what I did and it was a car buying nightmare."