There's been a handful of things she's done that suggest she's a bit psycho. The dog part definitely drives that point home for me.
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If he says no then the car will not leave. He can claim a mechanics lien. He can deny access to the property. Then it will take months and money to get back a trashed vehicle. Go get it and don't tell anybody. Possession IS 9/10 of the law.
Instead of advice for her, how about advice for you. If she actually steals the guys dog. (Other than being a deadbeat needing her car we dont know how bad he is or not? Not that it matters) Report her ass to boss/police otherwise you kinda are privy to it which in an extreme case puts you on the hook for not reporting?
MYOB, stay away from the crazy.
Don't get involved, get away
When you see a pot of crazy, you don't have to stir.
Involved in domestic disputes is bad juju. Spectator sport only, better from cheap seats far out.