Unless you have a dealer tag you have to have proof of insurance to get a temporary tag and you cant insurance unless you have a bill of sale, and you cant get a bill of sale unless you register the leanI think you missed the main point here - Bill never actually got a loan. He thought he had an approved loan, but it was a fiction. No loan, so nothing to register. Whether inadvertently or intentionally, the dealership let him drive away without a verified loan. That was made possible by the existence of a temporary state tag, an accommodation intended to facilitate legitimate business on nights & weekends or when there are unavoidable delays in paper transfers. Nothing wrong with that unless abused, but it was in this case. With no loan, the dealership never applied for a title in Bill's name, so the New Mexico DMV never got involved. The process should have come to a screeching halt when the loan was rejected, or at worst when the temporary tag expired (30 days after issuance in New Mexico). Not clear why that didn't happen until 6 weeks later. Malfeasance or incompetence?
I think you will find that a similar thing conceivably could have happened in Alberta if the dealer had arranged for a temporary "in-transit" permit until the final paperwork was completed. As I understand it, an Alberta in-transit permit can be issued for a test or demonstration period up to 7 days (most US states allow up to 30 days on that sort of permit). That's probably not "business as usual" in Alberta, though. Maybe that's a good thing!