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So this sounds like a stupid question but let me give it some background. I bought a brand new car a month ago. Last week my mother (who lives alone almost 2000 miles from me) was diagnosed with cancer and was given one year or less to live.
To keep it short I have a brand new car that I owe 22k own (MSRP 26k) and I need to sell it because I'll be quitting my job moving and living off of savings until I find a new job in her area. At this point the $400 payments make no sense without a job and I can use my mothers car.
So with the idea I can sell the car for what I owe (which I should be able to do with only 500 miles full warranty and 4k less than MSRP) how does that work? If the buyer has financing how do I get them money from them? Do they have their bank write me a check? How do I get the funds exactly in order to pay off my loan?
So I am thinking that they give me the money, I pay off my loan and give them the keys. My bank sends me the title after a couple of weeks and I sign then title in their name?
The buyer would make out a check to the lien holder (bank) and they would send you the title within 2-4 weeks. You then sign over the title to the buyer.
I'd be careful about handing them the keys before you receive the pink slip because they could get in to an accident or the check could bounce.
It'll be much safer to sell it to a dealer but they'll lowball you for much less than $22k.
The buyer would make out a check to the lien holder (bank) and they would send you the title within 2-4 weeks. You then sign over the title to the buyer.
As a buyer the deal would have to be really worth it for me in order to wait for the title and entire bank process. If you want an eager buyer you're going to probably take a little loss and price the car attractively. Given your circumstance this would probably be your best bet.
Do you have a Carmax nearby? I would get the car appraised and see how much of a loss you would be taking to sell to them, and avoid the hassles that can occur in this type of transaction. If the offer is perhaps $1-$2k below what you could get in a private party sale, I'd sell it and be done with it. At this time, it's probably better to have the fastest transaction possible, and that may not be a private party.
So very sorry to hear about your mother's diagnosis as well, and wish you both the best, given the stress of her illness.
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Here's the problem you are going to run into. How are you going to pay off the difference between what you are given on a trade-in and what you owe on the loan? If the MSRP is $26k, you are likely to see 17-19k on a trade at best. That means you are still on the hook for paying off the negative equity in cash. Look at it this way. If it's a brand new car and you received a couple of thousand off MSRP, everyone can likely get that deal. No one is going to spend $22k on a used car when they can buy a new one for only marginally more. On top of that, you have to look at what trade vs. retail is. Say Carmax has to list your car for $21k (high). They still have their margins to make so they will likely offer you no more than $18k on the deal.
At minimum you are looking at being $2k - $3k in the hole, and possibly more. The best thing to do here so you don't bleed money is to keep the car and ride it out as long as you can. $400/mo is a lot more manageable in the interim than putting out a large chunk of cash to pay off a car you won't even have anymore.
Sorry to be the bearer of bad news, but I've handled these types of transactions dozens of times and that's the reality of the market. I wish you and your family the best.
As a buyer the deal would have to be really worth it for me in order to wait for the title and entire bank process. If you want an eager buyer you're going to probably take a little loss and price the car attractively. Given your circumstance this would probably be your best bet.
I agree.
Having done this myself, the car sat in my driveway for 3 weeks while waiting for the title so I could register, insure and get a plate for it.
It was a good deal, which is why i did it. But if i was paying average price, i would just go to a dealer or find someone with title in hand.
Here's the problem you are going to run into. How are you going to pay off the difference between what you are given on a trade-in and what you owe on the loan? If the MSRP is $26k, you are likely to see 17-19k on a trade at best. That means you are still on the hook for paying off the negative equity in cash. Look at it this way. If it's a brand new car and you received a couple of thousand off MSRP, everyone can likely get that deal. No one is going to spend $22k on a used car when they can buy a new one for only marginally more. On top of that, you have to look at what trade vs. retail is. Say Carmax has to list your car for $21k (high). They still have their margins to make so they will likely offer you no more than $18k on the deal.
At minimum you are looking at being $2k - $3k in the hole, and possibly more. The best thing to do here so you don't bleed money is to keep the car and ride it out as long as you can. $400/mo is a lot more manageable in the interim than putting out a large chunk of cash to pay off a car you won't even have anymore.
Sorry to be the bearer of bad news, but I've handled these types of transactions dozens of times and that's the reality of the market. I wish you and your family the best.
I agree. If you owe more than the cars value, you have negative equity and will have many headaches trying to feel that car. An alternative is to do a budget and see if you can snowball extra money into the car loan and pay it off quicker. Sorry about your mom...good luck with everything.
The easiest way to do this is to make the transaction at the local branch of the bank that your loan is through. Steps as follows:
1. Call your bank right now and ask them to mail the title to your local branch. This may take a week or so.
2. When you find a buyer, you and he both meet at the local branch. He signs his financing check over directly to the bank, and you pay out-of-pocket any difference.
3. The bank signs the title over to the new leinholder and sends the title to that bank.
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