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I want to buy a car from a private party.
The person has a load on the car which he got from the dealership financing arm when buying the car brand new.
The owner is not in the country, he has notarized letter by which he authorizes a friend to sell the car for him.
I want to minimize the risk as much as possible.
The owner is willing to close the loan before I buy.
I intent to pay the authorized person in cash.
My question is what should be the buying process to ensure that the load has been released and fully paint, and for me to have the title?
From my (limited) understanding on the matter, it's best that we both go to the creditor (Dealership) and get get a loan release letter. that will ensure that the loan has been fully paid and released.
How to I get the title afterwords? and what else can I do to minimize the risk?
Thanks
Last edited by morpheus1234; 02-24-2015 at 03:33 PM..
Is the car "dealer financed"? That is, does the registered owner make the payments to the dealer?
If yes, then the dealer is probably where you need to go. Pay the money to the DEALER, not to the seller's representative. The dealer will issue a lien release, and give you the title.
If the lien holder is a bank or credit union, THAT is where you need to go. The dealer is no longer involved.
regardless, you need to pay the cash to the lien holder. remember, in CA the lien holder keeps the title. If you give the cash to anybody else, how will you know that they will pay off the lien so you can get the title?
when the transaction is completed, you want the title (properly signed for transfer), the lien release, and the car keys in your hand. If that doesn't happen, take your money and walk away.
Is the car "dealer financed"? That is, does the registered owner make the payments to the dealer?
If yes, then the dealer is probably where you need to go. Pay the money to the DEALER, not to the seller's representative. The dealer will issue a lien release, and give you the title.
If the lien holder is a bank or credit union, THAT is where you need to go. The dealer is no longer involved.
regardless, you need to pay the cash to the lien holder. remember, in CA the lien holder keeps the title. If you give the cash to anybody else, how will you know that they will pay off the lien so you can get the title?
when the transaction is completed, you want the title (properly signed for transfer), the lien release, and the car keys in your hand. If that doesn't happen, take your money and walk away.
Thank you for the detailed answer!
The car is indeed dealer financed.
One question - I assume that the price the owner owes for the lien is not equal to the price we agreed for the deal. So - is it ok that when we go to the dealer:
1. He will pay what he owes to close the lien
2. Dealer will issue a lien release
3. I pay the owner the agreed amount in exchange for the title (signed for transfer), keys and the lien release form.
Thank you for the detailed answer!
The car is indeed dealer financed.
One question - I assume that the price the owner owes for the lien is not equal to the price we agreed for the deal. So - is it ok that when we go to the dealer:
1. He will pay what he owes to close the lien
2. Dealer will issue a lien release
3. I pay the owner the agreed amount in exchange for the title (signed for transfer), keys and the lien release form.
Is that a safe procedure?
Does he actually have the cash to pay off the car on his own?
Thank you for the detailed answer!
The car is indeed dealer financed.
One question - I assume that the price the owner owes for the lien is not equal to the price we agreed for the deal. So - is it ok that when we go to the dealer:
1. He will pay what he owes to close the lien
2. Dealer will issue a lien release
3. I pay the owner the agreed amount in exchange for the title (signed for transfer), keys and the lien release form.
Is that a safe procedure?
Personally I would get the titled owner to get you a release of lien from the lienholder. CALL on it to make sure it's real. A release of lien from the lienholder allows the registered owner to sell the asset but still be responsible for the loan. But the car is free and clear to sell. Seller still has the loan liability.
I would personally not buy a car the way you are planning.
Who is the lienholder? Walk in there WITH the sellers representative ( who better have a power of attorney from the registered owner to sell the vehicle if it's not the registered owner ) and then. You pay the lienholder they pay the balance and the lienholder sends you the title. I would get a receipt and letter staring the vehicle is now sold to you.
Thanks guys, I eventually decided not to buy this car, but I learned a lot about the buying process thanks to you.
Another question - How can I sort the insurance when buying a car from a private party?
When going to see a car I'm not sure if I'm going to buy it since I need to check it first - so it doesn't make sense to buy a policy before I buy.
On the other hand - After I buy the car I need to drive it home, so I need a policy fast, but I want to make a market survey before I buy it
- So I'm really confused How should I approach the subject? (BTW, I don't have any policy right now)
Thanks guys, I eventually decided not to buy this car, but I learned a lot about the buying process thanks to you.
Another question - How can I sort the insurance when buying a car from a private party?
When going to see a car I'm not sure if I'm going to buy it since I need to check it first - so it doesn't make sense to buy a policy before I buy.
On the other hand - After I buy the car I need to drive it home, so I need a policy fast, but I want to make a market survey before I buy it
- So I'm really confused How should I approach the subject? (BTW, I don't have any policy right now)
You can get nonowner vehicle insurance as a temporary while shopping around. Then you can change the policy to full coverage with xyz limits as far as dollar amounts. I remember a friend did that a while back when he came back from the war. He was car shopping but had no vehicle.
That type of policy is specifically designed for your type of situation.
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