Buying a car that still has money owed on it.

[gunnails]

I was hoping to ask the board for there wisdom and advice about buying a car from a private party that still owes money on said car.

My 88 year old father has been wanting a wheelchair van that he can put his electric wheelchair in so he can continue to go to local High School football games, wrestling matches, and maybe even a casino to play poker.

After searching CL for a month I found a 2016 Dodge with 8,000 miles a fully fold out ramp conversion for $35,000. He has spoken by phone with the seller and thinks there is a deal to be made.
He will be paying cash, we don't yet know who holds the title, if it is a local bank we would just all meet at the local bank and the seller could pay off the debt and the bank could just hand over the title. Easy peasy.

Question
What if the lender is not local, how can we best do a transfer of money and title?

 

[max]

The bank will not release the title to you until they are satisfied. It is possible the current owner owes more than he is selling it for. The bank will not care, they just want their money.

Any of a number of things can go wrong here. Be very careful and do your homework.

 

[THE PILGRIM]

Sellers often owe more than they think or admit.
If it's a local bank- credit union, you can both go down together, pay off the loan, get a lien release, bill of sale and signed title.
Have you seen the title?
Some states, I haven't seen car titles from all states, have the lien holder listed on the title.
Once you see that, you will know exactly who needs to release that lien.
Then you just need to find out what is the pay off, and then control the money and ensure that the lien gets paid off.

 

[hittman77]

If the lender is not local and if the seller is a stranger to you .... I would pass.

 

[gunnails]

Sellers often owe more than they think or admit.
If it's a local bank- credit union, you can both go down together, pay off the loan, get a lien release, bill of sale and signed title.
Have you seen the title?
Some states, I haven't seen car titles from all states, have the lien holder listed on the title.
Once you see that, you will know exactly who needs to release that lien.
Then you just need to find out what is the pay off, and then control the money and ensure that the lien gets paid off.

==========================
No we haven't seen the title, the seller says the lien holder has it.

Problem is I am not sure how to have complete control of the money and get the title released without first giving the seller money to pay off the debt.

Just wondering if there is a method to get this done with out risk?

 

[gunnails]

If the lender is not local and if the seller is a stranger to you .... I would pass.

==============================

This may be the long and short of it, which is a shame because this rig checks all the boxes other then the title issue.

 

[Truckin]

Call the lien holder. They will tell you how to get it done.

 

[The Big D]

Do not do this!

DO NOT GIVE THE SELLER THE MONEY TO PAY THE LIEN.

Deal directly with the lien holder if you want to buy.

Be safe.

==========================
No we haven't seen the title, the seller says the lien holder has it.

Problem is I am not sure how to have complete control of the money and get the title released without first giving the seller money to pay off the debt.

Just wondering if there is a method to get this done with out risk?

 

[venomballistics]

==========================
No we haven't seen the title, the seller says the lien holder has it.

Problem is I am not sure how to have complete control of the money and get the title released without first giving the seller money to pay off the debt.

Just wondering if there is a method to get this done with out risk?

right there, as described, is an unreasonable risk.
Dislodge your head from your digestive tract and stop jumping after this carrot. Seek a straighter deal

 

[Goldstar225]

Assuming that the balance on the loan is less than the selling price:

Do a wire transfer direct from your bank to the lien holder to pay off the note. Obtain a bill of sale from the buyer pending delivery of the title once they receive it from the finance company, withhold the balance of the purchase price pending delivery of the title. Once the seller surrenders the title to you, pay him the remaining balance of the purchase price.

 

[gunnails]

There is no way on earth my Dad is giving any one cash without having the title staring him in the face, he's no dumby, and he has that grumpy old man thing going on so he has no problem telling anyone no.

Just that for the last 30 years him and I have only bought new vehicles so we are unfamiliar with how to proceed.

I'll just advise him to get in touch with the lien holder and ask them how to proceed, maybe the wire transfer is just the trick we need.

 

[jeffsmith]

If there is a Lien they Literally Hold the Title
So, its isn't likely you will see the Title
Until it's Paid Off & Released

 

[wood714]

Last bike I bought was a 2014 Street Glide a guy was selling for the pay off price.

Harley financing held the title.

We met at my bank with the manager, she did all the dealing with Harley. What had me worried was the fact the clear title went to the current owner as soon as the bike was paid off.

I asked her if there was any chance of me getting burned in the deal, she assured me I was safe. Transferred the money from my account to Harley, and took possession of the bike that day.

Around 10 days later he called and said he had the title, met at the local DMV and put it in my name.

Not sure how she was positive I couldn't get burned, but I didn't.

 

[brigeton]

If there is a Lien they Literally Hold the Title
So, its isn't likely you will see the Title
Until it's Paid Off & Released

Not in all states. Michigan for one the owner holds the title but the lien holder is on it. Once the loan is paid the owner will get a lien release then he can sell it and get a clean title.

 

[Muss Muggins]

Whatever you do, there is a separate document that must accompany this transaction called a lien waiver, or release of lien, executed by the lender. If the lender is out of town, you can probably do it electronically through your bank, but the documents are gonna take a while. If it were me, I would pay the lender directly and then pay the seller the balance. That way you know the loan balance gets paid, and the seller ain't running around with extra cash that he might spend elsewhere . . .

I was hoping to ask the board for there wisdom and advice about buying a car from a private party that still owes money on said car.

My 88 year old father has been wanting a wheelchair van that he can put his electric wheelchair in so he can continue to go to local High School football games, wrestling matches, and maybe even a casino to play poker.

After searching CL for a month I found a 2016 Dodge with 8,000 miles a fully fold out ramp conversion for $35,000. He has spoken by phone with the seller and thinks there is a deal to be made.
He will be paying cash, we don't yet know who holds the title, if it is a local bank we would just all meet at the local bank and the seller could pay off the debt and the bank could just hand over the title. Easy peasy.

Question
What if the lender is not local, how can we best do a transfer of money and title?

 

[Muss Muggins]

In Missouri, they're supposed to, but sometimes they don't, especially with used car dealers. The rationale is that the dealer needs the title to make a quick sale. I know of dealers who have used this quirk to double and triple floor plan their vehicles. Sell the car, don't pay any of the floor plan notes, buyer suddenly owns a car with two liens, plus their own . . .

Not in all states. Michigan for one the owner holds the title but the lien holder is on it. Once the loan is paid the owner will get a lien release then he can sell it and get a clean title.

 

[kwselke]

Your best bet is to talk to your bank about it. Even if you are not going to borrow money from them, you will need to get cashier's checks or have them do wire transfers. They will be knowledgeable on title transfers on used cars, and may be able to handle the transaction for you for a small fee. In Texas the current owner would have a non-transferable title which shows the lien holder's name and contact information. I would not expect the lien holder to be able to hand you a the released title when the loan is paid off unless arrangements have been made in advance, most likely the title will be in storage somewhere.

 

[hoosierone]

Be sure you know who is on the title. If someone else is on the title in addition to your seller, you have a problem. I would not have money change hands until I saw the title and verified the VIN on the title matches the vehicle.

 

[Old&Retired]

My concern with having a bank transfer of the payoff would then give the seller a clean title WITHOUT spending a dime and the possibility of disappearing into the wind. If not a local lender I'd walk away quickly.

 

[Steve912]

==========================


Problem is I am not sure how to have complete control of the money and get the title released without first giving the seller money to pay off the debt.

Just wondering if there is a method to get this done with out risk?

Nope.

If you want it from the horse's mouth, contact the lending bank.

I looked into buying a boat & motor combination from a
guy with a bank loan (BoA IIRC). Bank said payment could be
made at any local branch, BUT titles were retained at a central
location, and were mailed out a couple of weeks AFTER loan
was declared paid off.

That, and the titles were sent to the name/address of person on the loan.

For anything with a title, "title in hand", is the golden rule.