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Every time we've paid off a car, the title has come from the bank. Some banks are faster to get the title to you than others.
Yes, this is my recollection. The title is issued by the DMV/RMV, but it's held by the owner - initially that is the bank who holds the vehicle loan. After you've paid off the loan, the bank then sends the title to you, as you now own it free and clear.
Just paid off my vehicle, I'm in a rush to get my title as I need to sell the vehicle and already have a buyer lined up willing to pay exactly what I was asking for. Not sure what's going on here as I get a different response every time I call. I live in the U.S. btw.
Bank first told me that once I paid off my vehicle, the DMV would be sending me the title.
The second version that I'm getting is that after a 1 week waiting period(to make sure funds aren't pulled back) the bank will be sending me the title to the address on file.
The other times in my life when I paid off a vehicle, it didn't matter where the title came from. I wasn't in a rush to receive it and the title would eventually just show up at my house. This time, time's ticking and I want to sell before the buyer backs out.
Titles are always re-issued (with a new title number) each time a car is bought or refinanced. Dealership owns the car, you get a new title # whether you buy or finance. If you finance, you get yet a THIRD title # when you pay it off.
Does anyone know if you can take the payoff letter (assuming you'll get this FIRST in the mail, or log in online and print it) take that to the DMV and get an "instant title"?
In many states I’ve dealt with, the paper title document is given to the registered owner of the car shortly after they’ve bought the car with the lien holder (bank or other lender) named on the title. When you pay off the note, the lien holder issues a “lien release” letter to you and notifies the Secretary of State where the lien was filed that the note has been paid off. That release and the title in hand is your proof of clear ownership of the vehicle. You can file it away for safekeeping or use the 2 documents to sell the vehicle, or get a new title issued in your name without any lien holder.
In some states, the lien holder has the paper title document in hand. Upon payoff of the note, the lien holder signs off the release of the lien on the title and forwards it to the owner. You can use that title to sell the vehicle or to get a title issued in your name without a lien holder.
Still other states have moved away from issuing a paper title unless requested by the owner, and there is only a “virtual” title on file in the state records which shows the car owner and the lien holder of record. When you pay that lien off, the lien holder sends a release to the state and the virtual title is now clear in your name. You must request a paper title to be issued if you need that to sell the vehicle. Because it’s all accessible online, your buyer’s title trail in the same state may even be satisfied with a bill of sale, purchase receipt, and a notice by you to the state that you’ve sold the vehicle to that buyer. Of course, if the buyer is from a state that requires a paper title, you’ll need to get one to sign over to the buyer to complete the sale.
Some posters here have confused a lien holder with the legal car owner of record. You, as the buyer of the vehicle, are the legal owner. The lienholder only has a secured interest (lien) on the vehicle until the note is paid off, with the right to protect their interest by taking possession of the secured property if you default on the note. Should they take possession of the vehicle for a default, they have to file for ownership of the car to be able to sell it to another buyer. The process is essentially the same as a real property with a mortgage; ie, in the event of a default, the lienholder can exercise their right to take possession ... in real estate, that’s done with a foreclosure action. As well, I’ve seen situations where a car owner has pledged a car as collateral for a loan and the lender filed their lien with the state; when that car owner defaulted on their loan, the lenders came for the car so they could sell it to cover the note (I had one client, who used the same cars for collateral on several notes who defaulted ... and the lenders were all looking to take possession of the cars, a bunch of Mercedes-Benz’s. They tracked them down to my shop, where I’d been storing them for non-payment of repairs and would not release each until the bill was paid in cash as he’d written me a couple of NSF checks for the one car he did pick up. ‘Twas quite the carnival when I had several banks calling me to advise they were sending a tow company over to get the cars ... and a Texas sheriff’s dept ordering me to not release the cars to anybody but a lender from their county. All were advised that I wasn’t releasing any of the cars until I was paid good funds for the completed repairs and the months of secured warehouse storage. The Texas lender paid me and sent a transporter to pick up the cars; I got a bunch of calls afterwards from unhappy lenders that I’d released the cars to somebody else)
Bottom line, OP, is that you can check with your state agency that issues the titles. Could be the DMV, or another agency, and they can tell you where the title is held and how you can proceed to sell the car.
Spent well over a grand last year in storage. This year it's just sitting there at my parents house as I am stuck abroad. It is slowly depreciating. I have found someone willing to buy it and pay the price for the mods/accessories I have put in it. Normally you lose money on whatever accessories you add to a vehicle. The fact that I found someone that wants it WITH the accessories and mods makes it urgent to get this sold. Will be hard to come by someone with the exact same tastes a second time and the vehicle will sit for months.
Quote:
Originally Posted by turf3
Well, you've got the non-negotiable copy of the title. Who does it say is the primary lien holder?
Lien Holder is the bank. That doesn't answer anything in this case as I have been told both, bank releases title and/or DMV releases title.
I've paid off a few vehicles. The title shows up in the mail on average about 3 weeks after last payment clears. IIRC, here in MA the bank has to sign over it's rights and submit a form to the RMV which then issues me a new title in my name only with the lienholder (bank) removed. I'm sure every state is different
Spent well over a grand last year in storage. This year it's just sitting there at my parents house as I am stuck abroad. It is slowly depreciating. I have found someone willing to buy it and pay the price for the mods/accessories I have put in it. Normally you lose money on whatever accessories you add to a vehicle. The fact that I found someone that wants it WITH the accessories and mods makes it urgent to get this sold. Will be hard to come by someone with the exact same tastes a second time and the vehicle will sit for months.
If your buyer is as motivated to purchase your car as you've indicated, then I'd work with them to achieve the common goal of a sale and transfer.
Knowing that you are out of the country, perhaps you can write up a Bill of Sale and get a nominal deposit from the buyer until such time as you can resolve the clear title?
Give them a reasonable date as to when you can resolve the title and they can pay the balance and take possession of the vehicle. If they really want to do a deal, you should be able to work out realistic terms and get a win-win for everybody.
Usually it the entity that holds the loan. Usually its a bank. The car is technically theirs until you pay off the loan and then ownership is transferred to you.
Usually it the entity that holds the loan. Usually its a bank. The car is technically theirs until you pay off the loan and then ownership is transferred to you.
Again, we have a totally wrong understanding of Vehicle ownership and Legal Title of Record.
The person who bought the vehicle, in this thread the seller, is the SOLE LEGAL OWNER of the vehicle. Always, in every state of the USA, without exception, and so listed as the owner on the TITLE.
The owner is the one who is legally responsible for the operation of the vehicle and held accountable for liability and insurance. NOT THE LIENHOLDER, who is not the owner of the vehicle.
The lienholder, be it a bank, finance company, S&L, or any other lender ... could even be a private party ... merely holds a Secured Interest in the vehicle recorded as a Promissory Note on file with the Secretary of State.
The lienholder is protected in several ways:
1) they're named as a loss payee on your car insurance policy in the event of a loss claim. The lienholder is involved whether it's a damage claim ... hence, co-payments typically issued to the lienholder and the repair shop, or if the car is declared a total loss by the insurance company, the lienholder gets the insured value payoff less the policyholder deductible amount. It's why you hear about "gap coverage" where the value of a totaled car may be less than the lienholder's payoff amount. Every lender insists upon the borrower/car owner purchasing and maintaining in force adequate basic insurance coverage as a condition of the loan.
2) should the borrower/car owner default on the payments, the lienholder can then exercise their right to recover the loss by taking possession of the vehicle so that they can then sell it to recapture as much of the loan as possible. Here's the key aspect of that situation: if the car cannot be sold for the full amount owed on the note, the lienholder has the right to collect the shortage from the LEGAL OWNER who borrowed the money and signed the promissory note collateralized by the vehicle.
Until the lienholder exercises their right to take possession of the vehicle in the case of a default on the promissory note, they do not and never have owned the vehicle in any way, shape, manner, or form.
While you can assert that "technically" you don't own the real property until the lienholder's secured note is paid off and released, this is only a borrower's mental construct. The key detail: you, as the vehicle titled owner have the right to sell your property as you see fit; of course, the lienholder will need to sign off their interest with a release to allow the title to transfer to a new buyer/owner.
Please note that you, as the owner, can sell a vehicle in your possession even when you're behind on the payments ... as long as the lienholder hasn't exercised their right to take possession and pursue selling the vehicle. Of course, the lienholder has to be paid off to release their interest in your sale. You'll see dealerships market such deals to buyers all the time ... "we'll take your car in trade, paid for OR NOT" because they will pay off the note to get the title to your traded car which they can then sell. There's no free lunch in these deals, the payoff of your old note is rolled into the sale of the next vehicle you buy.
I've bought more than few cars through the years where the seller and I paid a visit to the lender that held the lien on the vehicle ... and paid the note off to get the lender's release on the spot, and then paid the seller the balance of the purchase. Why did I do it this way? because I didn't trust that handing the entire purchase price of the vehicle over to the seller would ensure that they would follow through with paying off their note to the lender to release the title. I had a good friend, a specialty used car dealer, get burned this way on a $120,000 note on a Ferrari ... he paid the seller $185,000 cash, took delivery of the car, and the seller skipped town, never paying off the note to get the lien release. 'twas a very sticky situation for over a year as the car dealer had pre-sold the car to his buyer and delivered it a day after he got it ... and his buyer paid him in full upon delivery. The car dealer was never able to get clear title to the car and had to refund his buyer's money ... taking possession of a car that now had 8,000 more miles on it (for that car, that meant it needed new tires, a major service, and extensive detailing to restore the cosmetics to what it was when the dealer first got the car ... over $10,000 in restoration costs out of pocket). The now significantly depreciated value car sat in his backrooms for another year before he was able to pay off the original lienholder and get a clear title to the car. I don't know that he ever got much, if any, money from the seller that had skipped out ... that guy was a part-time wholesaler who got busted for odometer roll-backs and sent to a Federal vacation for 18 months. I got a good education over that whole mess as to why buying high dollar cars with sight drafts was a way safer way to do business in this industry ... even on the deals I generally did well under $10,000, I won't take a cashier's check unless I can cash it at the bank it's drawn on. Best practice for me was to cash the cashier's check and get it reissued as a cashier's check payable to me personally so I had good funds in hand to deposit in my bank. More recently, I rely upon direct deposit into my account before completing and signing over titles & paperwork. Why this concern on this thread? Because the OP is out of the country and it's more difficult to verify that he's getting paid in good funds from his buyer on a car here in the USA.
Last edited by sunsprit; 04-01-2021 at 12:04 PM..
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