So I found a pretty good project vehicle about 5 hours from me. Being so far away, I plan to pay for it and bring it home all in the same trip. Things are going fine....then during my correspondence with the owner he tells me that there is a lien on the vehicle, but he does have a copy of the title to prove that there isn't anything hokey going on.
I have bought and sold plenty of vehicles, but never with a lien still on the vehicle.
So the million dollar question. How do I safely go about doing this? My Googling has shown that the best bet is to go the the lien holder's office with the seller and pay off the lien personally and have them transfer the title directly to me. Then pay any difference to the seller directly as a separate transaction. Is this the only way? Are there safer ways? I know that I can obviously give the seller a check, and hope he pays off the lien, and hope the title makes it to me eventually, but that seems WAY too risky.
Thoughts?
TW
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SOLD - 1966 Coupe, I6 Auto, Signal Flare Red w/ Black Interior
NEW - 1969 Mach 1, 351W, Project, with a capital 'P'
Risky? You bet!! The word hope and purchase don't mix! I wouldn't do that with a $100 purchase!!
Maybe someone has a good SAFE way to do this,
good luck,
Slim
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My '64 1/2 vert. Ordered May '64. D code 4 speed, handling package, caspian blue, accent group, Ford blue manual top.
'68 vert. driver. Owned since '77. C code AT, AC, PS, P disc B, PT lime gold, standard black interior and top. NOS RF fender and left quarter.New top and folding glass.
Nosey rosey here, how much are you paying and how much is the lein on a project mustang,...never heard or even though about a lien on a crapped out project Rustang
I would leave the owner completely out of the transaction. Get the lein holder to fax you a statement of whats owed for clear title.
Go straight to the lein holder and pay with a traceable check, also get them to sign off on the car being pain in full at the moment of payment. This way nothing changed from the time of your payment until you get the title.
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Wife,........."You drove how far for that thing?"
Daughter,..."Theres no inside and it stinks."
Friend,......."Dude, thats a rusted piece of sheet."
Son,.........."This old car is cool."
To be clear,...even if the lein holder gives you full title at the time that you give them the check, still get them to sign off on the lein being payed in FULL
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Wife,........."You drove how far for that thing?"
Daughter,..."Theres no inside and it stinks."
Friend,......."Dude, thats a rusted piece of sheet."
Son,.........."This old car is cool."
What kind of lien? Mechanic? Government? Simply a bank loan? If he just has a loan on the car this is pretty straightforward. You give him money, he goes to the bank, pays the car off and gets the title from them. This is standard operating procedure, nothing strange about it. This is how most newer vehicles are sold between private parties when one has financed the original purchase.
When I got a divorce I financed a car I had to get a little extra cash. Sold the car to a guy in Montana. He drove down to get it. I gave him the car, he gave me the money, I paid off the bank, got the title and mailed it to him. No big deal.
When you give him the money, just take the car and a bill of sale. Then you have about as much power as he has.
I see you're in Virginia, is the car in the same state? Don't believe you will be able to transfer ownership without the lien being satisifed. The "copy" that the owner has is usually referred to as a memorandom copy, the lien holder usually holds the original title until the debt is satisfied (you can't do much with a memo copy). Like Israel stated you'll need to deal with the lien holder first, hopefully the lien amount is less than your paying for the project, otherwise you'll probably have to look for another project! If it's an official lien should be recorded at the county recorders office (at least in Ohio).
Nosey rosey here, how much are you paying and how much is the lein on a project mustang,...never heard or even though about a lien on a crapped out project Rustang
I would leave the owner completely out of the transaction. Get the lein holder to fax you a statement of whats owed for clear title.
Go straight to the lein holder and pay with a traceable check, also get them to sign off on the car being pain in full at the moment of payment. This way nothing changed from the time of your payment until you get the title.
Just for giggles and grins. Lets say the PO has a loan that was obtained using the car as collateral. Could have a unpaid balance of $100 on a $20,000 car. It's still a lein until cleared by the lien holder. Doubt if calling it a rustang has an effect on the lien!
Also if a stranger can walk into my bank and say they will pay the balance on my car (or house) then they get the title??
Slim
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My '64 1/2 vert. Ordered May '64. D code 4 speed, handling package, caspian blue, accent group, Ford blue manual top.
'68 vert. driver. Owned since '77. C code AT, AC, PS, P disc B, PT lime gold, standard black interior and top. NOS RF fender and left quarter.New top and folding glass.
When I got a divorce I financed a car I had to get a little extra cash. Sold the car to a guy in Montana. He drove down to get it. I gave him the car, he gave me the money, I paid off the bank, got the title and mailed it to him. No big deal.
When you give him the money, just take the car and a bill of sale. Then you have about as much power as he has.
Playing Devil's Advocate here...............what if you had just pocketed the $$ and never paid off the lein--would the bank not eventually just repo the car from the guy you sold it to?? I'm sure that you would be in violation of fraud laws but that would be little comfort to the guy who just had his "new" car repo'd. Sounds like he realy trusted you to do the right thing and you did but I don't think I would be that trusting to a stranger.
I walked away from a similar situation a few yr ago over a truck purchase out of State--only way I was going to do it was if myself and the owner went to the lein holder and I saw it paid off and then I got the Title right there and then. Ultimately I found a truck that was debt free locally.
Not if you have the car. Also, keep in mind that if the person "screws you" they have also decided to destroy their credit in the process and commit fraud in a very traceable manor. Wouldn't put it past some folks but this would be a pretty stupid way to scam someone. There is always the option of going to the bank with the person but you'll likely have to arrange that in advance since it's 5 hours away and there's no telling where the title is physically located as far bank branches.
I guess the first thing to be noted, is that the car is a driver, not really a rustang. I plan on driving it the 5 hours home. But I guess it will be considered a project for me.
Things that I don't know yet, but will know when I talk to the guy on the phone tonight are: Who has the lien, and how much it is for. Obviously if the lien is for more than the selling price, I would need to have the current owner cover the other portion and would have that happen at the same time. Or walk away.
I plan on drawing up a pretty lengthy bill of sale that stipulates all we've discussed here. Including the current lien holder, an addendum showing paperwork for the release of the lien, and the acknowledgement that the title will be directly transferred from the lien holder to me. I figure that if we are at the lien holder's office, getting both parties, me and him, and sign this with a notary present shouldn't be an issue. I can also then collect the lien release too.
Understood that the copy of the title means diddly. I don't plan on giving anyone any money unless I will have a confirmation on the release of lien.
I think that will keep me fairly safe. But like jdub said, if he does try to screw me, I have a very, very traceable transaction and he will be committing fraud. I guess it is more to keep me from the hassle of having to deal with it, but in the long run, I think I would be ok.
Oh and to complicate it more, he is in North Carolina, and I am in Virginia. But I don't think that means much.
TW
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SOLD - 1966 Coupe, I6 Auto, Signal Flare Red w/ Black Interior
NEW - 1969 Mach 1, 351W, Project, with a capital 'P'
pretty easy, you guys make this harder than it is.
1) whatever the lien amount is you make check payable to the bank
2) if the amount owed to seller is more than lien, pay him the extra amount directly
3) bill of sale and have it notarized, thats a legal document, period
Also if a stranger can walk into my bank and say they will pay the balance on my car (or house) then they get the title??
Slim
Power of attorney would have to be involved along with a bill of sale and whatever else the lein holder required before title would be turned over,..you're correct.
__________________
Wife,........."You drove how far for that thing?"
Daughter,..."Theres no inside and it stinks."
Friend,......."Dude, thats a rusted piece of sheet."
Son,.........."This old car is cool."
pretty easy, you guys make this harder than it is.
1) whatever the lien amount is you make check payable to the bank
2) if the amount owed to seller is more than lien, pay him the extra amount directly
3) bill of sale and have it notarized, thats a legal document, period
How can you sell something you don't own? As long as the money is owed to the bank and they hold the title they own the vehicle. A bill of sale doesn't mean anything if you don't own what you are selling. The seller is paying installments to the bank to own/buy the vehicle. The bank is letting him drive their vehicle until it is paid for. I went through this a couple of months ago. Bought a truck from a guy in Virginia. I live in NC. The bank had the title. I wrote a check to the sellers bank and the seller and I signed a bill of sale. Had a local notarize the bill of sale and trusted the seller to take the check and pay off the truck. He told me it would take a week to get the title. It took 6 weeks. I worried every day that I did something very stupid. What if the seller decided to take the check made out to his bank and apply it to his home loan? What if he used it to pay off his charge card at the bank? ....I would not do it again unless I was sitting in the lien holders office with the seller and lien holder and did the transaction with them both to make sure it was done correctly.
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Purchasing a car with a lein
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