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Old 06-30-2011, 09:45 AM
 
1,685 posts, read 1,519,689 times
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Hi,
i'm buying a used car from an individual.....car has a lien on it.
he's saying that i can give him a cashier's check....we can both go to his bank, deposit the check, write a contract saying that i have the car until he pays off the lien and gets the title.......
then i take the car with the plates.....and wait a week or two to get the title from him, and then send him the plates back.

does this all seem logical and accurate? anything out of the ordinary? do i have to register the car in the mean time? (I'm not sure i can since i don't have the title)
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Old 06-30-2011, 09:59 AM
 
Location: the 718 and the 650
194 posts, read 379,516 times
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The specifics vary by state but I sold my car with a lien on it in Dec in NY State. It's a little bit of a pain but luckily the gentleman who bought had some knowledge in legal forms. Basically what we did was, I found a Bill of Sale for vehicles online which we both filled out, got notarized, and retained a copy. Then he got a bank check for the amount which he overnighted to VW (the leinholder) along with a letter from me allowing release of the title to him at his address not me. He got it back within a week I believe. During this time the car was parked in his driveway, locked and I had the keys to ensure it couldn't be driven as it was still in my name until the lein was released. Soon as Volkswagen contacted me and told me the lein was released I brought over the keys and canceled my insurance.
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Old 06-30-2011, 10:02 AM
 
8,602 posts, read 12,203,810 times
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Go to the business place of the lienholder where they will have the actual title as opposed to the memorandum certificate of title. Pay the money and get the original title on which they have endorsed the lien release together with a receipt from both the seller and the lienholder referencing the VIN and marked paid in full.
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Old 06-30-2011, 10:26 AM
 
Location: the 718 and the 650
194 posts, read 379,516 times
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Quote:
Originally Posted by Wilson513 View Post
Go to the business place of the lienholder where they will have the actual title as opposed to the memorandum certificate of title. Pay the money and get the original title on which they have endorsed the lien release together with a receipt from both the seller and the lienholder referencing the VIN and marked paid in full.
Yes this will work if the place is close. I forgot about that. Years back in FL I sold a car with a lien and the holder was only about an hour a way so we both drove down he gave me the money for the lien I paid and signed the title over in the parking lot. With my VW I was in NY and the lienholder was in IL.
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Old 06-30-2011, 10:48 AM
 
Location: Victoria TX
38,753 posts, read 38,334,632 times
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I once bought a car with a lein, the seller intended to (and did) use my payment to pay off the note, which was GMAC. The seller held the title, but the lien was specified on the title. After a week or so, I phoned GMAC in New Jersey or someplaca, and they yawned and said Aww, sometimes it takes a couple of weeks for us to get around to sending the letter signing off on the lien. So I phoned a used car dealer, and asked him if there were any shortcuts, and he said Sure, just turn over the title and put what looks like somebody's signature in the space for the lienhlder's release, and take it to DMV, where they will make a cursory glance to see that there is a signature on the line, and everything is cool, we do it all the time.

Sure enough,it worked, no problem.
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Old 06-30-2011, 12:24 PM
 
Location: Santa Monica, CA
1,291 posts, read 1,429,003 times
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I probably would not buy another car with a lien on it only because I had a bad experience. I bought a car from a private party that was financed by the manufacturer's finance arm and I sent my check directly to them (not the seller.) The seller wrote them a check for the balance owed but for the wrong amount. It was supposed to take 3-4 weeks for them to send the title and it ended up taking over 2 months. In the meantime the registration expired and I was racking up late fees on the sales tax I owed to the state (around $200 in the end.) I was happy to pay the tax but the CA DMV told me they couldn't initiate the transfer process without a title! I think the CA DMV is far worse than most though, they give you something like 2 weeks to transfer the title before late fees start...on top of all the incorrect information they gave me which made things worse.

I do believe the seller made an honest mistake but he had absolutely no skin in the game once my check was cashed.
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Old 06-30-2011, 01:50 PM
 
Location: Columbia, California
6,540 posts, read 14,856,581 times
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Quote:
Originally Posted by Dunbar42 View Post
,,,,I think the CA DMV is far worse than most though, they give you something like 2 weeks to transfer the title before late fees start...on top of all the incorrect information they gave me which made things worse.,,,.
CA you merely need to start the process within 2 weeks, it can take months here as well.

I sold a car with a B of A loan. That was real easy, we went to the bank together with his check. BA did the paperwork and I got a check for the difference.
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Old 06-30-2011, 01:58 PM
 
Location: East of Seattle, originally from SF Bay Area
14,439 posts, read 17,381,414 times
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If you are a member of AAA they can take care of that for you smoothly. Otherwise I would only do it by taking your payment to the lienholder and getting them to agree to send you the signed off title. Too many chances for fraud. You cannot insure it until it's registered in your name. Talk to your insurance agent.
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Old 06-30-2011, 02:24 PM
 
Location: Eastern Washington
8,800 posts, read 22,783,014 times
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Quote:
Originally Posted by Thinking-man View Post
Hi,
i'm buying a used car from an individual.....car has a lien on it.
he's saying that i can give him a cashier's check....we can both go to his bank, deposit the check, write a contract saying that i have the car until he pays off the lien and gets the title.......
then i take the car with the plates.....and wait a week or two to get the title from him, and then send him the plates back.

does this all seem logical and accurate? anything out of the ordinary? do i have to register the car in the mean time? (I'm not sure i can since i don't have the title)
Like others have noted, this depends on your state laws. One thing I can add is that this needs to be a very good deal, you need to get a discount for putting up with the hassle. There is some risk you will have some hassle getting the title from the previous owner down the road - maybe he's an OK, stand up guy, but just for example what if he suddenly gets sick and dies, or ends up in a big wreck and gets sued, or gets divorced before you get the "pink"? None of this is likely, but, it's all possible.

If you can, just pay cash and pay the lien off and get the "pink" as part of the deal, if not, consider if you can get your own loan so that again the car's previous owner is out of the loop.

Or does the current loan have better terms than you can get now that it's a used car?

This is one reason I really like to buy cheap older cars. The Scirocco, bought for $1000 - I handed the previous owner 10 Franklins, he signed over the title and handed me the keys - car deals don't get much cleaner than that.
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Old 06-30-2011, 02:29 PM
 
Location: Santa Monica, CA
1,291 posts, read 1,429,003 times
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Quote:
Originally Posted by ferretkona View Post
CA you merely need to start the process within 2 weeks, it can take months here as well.
Yes, but when I went to the DMV they told me I couldn't initiate the process without the title. That person was wrong, and I eventually got temporary tags, but I was incurring late fees in the interim. Also, as I recall, the temporary tags were only good for a couple months so it better not take much longer than that.

I'm sure my case was the exception to the rule but I hate depending on a total stranger to fulfill their end of the bargain after the money has changed hands.
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