how to buy a used car that has a lien on it

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Go to the bank with the seller to pay off the car and obtain the title, if the bank or finance company is local.
The seller will not be able to transfer the title of the car to you until the loan is paid off.

Before the seller can legally transfer the title to you, he or she must obtain a release from the lender.
If the seller needs to use the purchase funds to cover the lien, both you and the seller will have to travel to the bank or lending location to complete the transaction.
When it comes to buying a vehicle, purchasing from a private seller is often a good idea because you avoid the expenses involved with a dealership or professional car dealer; you cut out the middle man.
A bank officer will facilitate the transfer of the vehicle once you give the purchase funds to the seller.
Write this down or ask the seller to give you a copy of title with the lien information.
If the seller has a lien on the vehicle, be sure this lien is removed before you hand over the cash.
Check with the lienholder — the bank, credit union or lending agency that holds the title — regarding what to do.
Whatever you do, don’t hand over your money to the seller, even if he tells you he needs your money to pay the lien.
Your lender would pay the lienholder and then the seller if there is any money left over.
If the title can’t be readied in time, the lienholder will mail you the title.
The seller needs to sign the title over to you before you can register the car.
The buyer pays the financial institution the money owed, and the seller gets the rest, if there is any.
Some buyers physically go with the seller to the financial institution that holds the lien.
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.
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.
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.
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.
Nevertheless, even if the vehicle is encumbered by a lien holder other than the financing bank or finance company, the problem can be solved with the proceeds from your loan disbursement.
A car lien is placed on a vehicle when the registered owner of the vehicle still owes money to the bank or lender that financed the vehicle.
In the event that there is another person or company listed as the lien holder that did not provide financing for the original purchase of the vehicle, use extreme caution.
Once your check clears, the bank will release the lien on the vehicle, and you can start the process of transferring the title into your name.
A car lien simply means that a vehicle cannot be legally sold and owner title transferred without first paying the obligation to the lien holder.
In order to sell a car under a lien, you need to pay off the bank with the lien to have it removed.
While you owe money to a bank, the bank has a lien, or the financial ability to sell your car.
You will not be able to transfer the title to the buyer if the car is still under lien, and you will not be able to pay off the loan to remove the lien without transferring the title to the buyer, so they will pay the bank the pay-off amount.
To sell a car with a lien, you need to pay off the bank with the lien first.
If you sell to a dealership, they may give you the difference between the money still owed to the financing company and the selling price, or they may apply it toward paying for a new car.
The most confusing aspect of trying to sell a car with a lien on it can be the word ‘lien’ itself.
It is common to sell a car that is still under lien, but not everybody realizes they have options when it comes to how they can sell it and to whom.
Before I bid on item I got his TX dealer license permit, drivers license, copy of carfax , copy of existing title ( which has actual owners name on it ) and TX state surety bond insurance for $25000.
Everyone I’ve spoken with claims that if I mail a check to the credit union to satisfy the lien, the title will simply be given to the registered owners (even though I paid) and that there is no legal way to force them to sign over that title to me at that point.
4) Finally I can file a theft case against the dealer if he cant produce a clean title in court and sue his private dealership and retrieve the money I paid him.
Once they have title, we will all schedule an appointment to meet (Me with the person selling the car here in California, the Credit union representative and the registered owners in florida) at which point I will call the credit union and inform them that i’m ready to take posession of the car.
Anyone else have input into this process? I’m calling the credit union on Monday to ask about transferring the lien to my name if they can get the owners to sign the title over to me.
Making the draft payable to the seller and the bank will help ensure that he pays the car off, but will not ensure that you get the title.
So the dealer is in process of transferring the title in his name and he will sign off and mail me the original title ( still hasnt come but I will give another week ).
Depending on the bank, they may have an option for situations just like this, where the loan is paid off by a third-party, with the owner signing an agreement that the title is released to that third party.
1) Its a third degree felony to sell a car to someone without the dealer making sure that the title is without lein and is transferrable.
2) The surety bond of $25000 guarantees I get a clean title else I am getting $25000 from insurer ( Southern Insurance ).
Many drivers finance the purchase of their vehicles, but the associated lien on the car can create some hurdles if an owner decides to sell before the loan is paid off.
If you sell your vehicle as junk, and you don’t want the vehicle to be driven again, write the word "Junk" across the title before you give it to the buyer or salvage dealer.
Title branding laws that apply when you sell your vehicle privately also apply when you trade it in to a dealer.
To get your title branded, ask for the Vehicle Brand Disclosure Statement (Form MV2848), and the Application for Title and Registration (MV1) (401 KB) at any DMV service center.
A brand of "stfarm not inspected" is placed on a vehicle declared by State Farm Insurance as a total loss, but not submitted as salvage, and was part of the State Farm settlement with the Department of Justice.
The brand "manufacturer buyback" on your title means the vehicle was bought back under the lemon law.
A "brand" is a permanent notation on the vehicle record that gives a prospective buyer important information about the history of a vehicle.
When the vehicle was first sold and the original title issued, unless it was paid for in CASH, the a title would have been issued with a lien in favor of the lienholder, which in this case appears to have been American Honda Finance.
Also, when I popped the hood, I noticed liquid…..it appeared to be green in color ("anti-freeze" was my first thought) but the salesman swore up and down it was the "green cleaning stuff" they used to clean the engines with.
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You and he deal with the finance company to transfer it, you hand them a cashier’s check for the debt (probably at the same time), they sign the title over to you.
Do finance companies generally have some sort of temporary form they can give to a car buyer for it to be registered properly without having to wait for the title in the mail? I’d like to avoid ending up like E34lover with his title disaster, so hopefully I can figure it out soon.
Also, if you do send payment, be sure you have car in hand the day it gets sent out; otherwise the guy could screw you out when he gets the title free and clear, and you’ll be having fun learning about how the American civil court system works.
If the seller bitches and moans about how you might stiff him because he doesn’t get his cut until AFTER you’ve assumed the debt and paid the finance company, remind him that you’re getting him out of debt.
The guy says it takes ten days or so from paying off the loan in full to the title getting sent to him, and I’d rather not just pay him and wait for the title in the mail while I’m driving around unregistered.
It’s being financed with Toyota Finance, so it’s not some fly-by-night operation, but their terms and conditions aren’t really made public to people who aren’t directly involved with them.
If you do not have the original owner’s manual, keys and remote, Arizona Car Sales may adjust the offer.  In addition, if the vehicle was appraised with equipment that was in the vehicle when we looked at it (radio, wheels, etc) and you remove it prior to sale, we may adjust or void our offer.
At Arizona Car Sales, we can offer you more for your vehicle because we are largely based around used vehicles rather than new cars.
If your vehicle is titled in a state where the owner holds title AND a previous loan on the vehicle has been paid off but is still recorded on the title, you will need both the title and lien release from the bank before Arizona Car Sales can purchase your car.
You may accept that offer and sell us your vehicle or we’ll give you a free written offer good for 7 days.
* Valuations are provided as an estimate for informational purposes only and do not constitute a firm offer from us.  Valuations are based on the limited information we collect from you online and market information about your vehicle (which, for some makes, models and years, can be limited).
Less than 1 out of 100 vehicles we see are in "excellent" condition so using that option to evaluate your vehicle will result in an artificially high value that will, more than likely, not be close to our offer to purchase your vehicle.
If your pay-off amount is more than the offer for your car, the difference is called "negative equity." If you purchase a vehicle from us, in some cases, the negative equity can be included in your financing when you buy from us.
Assuming the vehicle is in similar condition to when we looked at it, our offer to PAY CASH FOR YOUR CAR is good for 7 days.
The only way to determine a value is what someone is willing to write a check for, which Arizona Car Sales will do on the spot after we appraise your vehicle.
No problem- our process is hassle free and if you want to think about it, we will give you a written offer for your vehicle that is good for 7 days.
However, we have partnered with Kelley Blue Book, a company that values thousands of vehicles weekly, to give you an online estimate as what your vehicle may be worth.
Cap 1 has sent me many preapprovals + from talking w/them, it seems like they would be willing to finance me w/an open .  Interest rate is not fabulous- roughly 7-10% from what I’ve seen- but it’s not as atrocious as say roadloans.  Supposedly Wachovia is friendly, but they were recently bought by wells fargo (Which is NOT friendly), so that may have changed.  I’ve seen people get approved by chase w/open tax liens.  car dealers here (calif) advertise ‘will work w/bk + tax liens,’ so financing’s not totally impossible…but it’s not a walk in the park either.
© Virginia Department of Motor Vehicles (DMV) 2014, all rights reserved.
If the certificate does not contain information from the Register relating to the car at the time the certificate was issued (i.e. a security interest exists but is not disclosed on the certificate), the security interest will be extinguished, provided that the certificate was issued on the day (or the day before) the first part of the purchase price was paid (s 7(1A), (1B) CSA).
In a situation where the Sheriff does not register an interest that arose prior to your purchase of a car, the Sheriff, and not you, may have legal title (see Ward v Alan Mance Motors Pty Ltd(unreported, Supreme Court of Victoria, 21 December 1994, and the definition of security interest in s 3 CSA).
A security interest that is unregistered, or that has been incorrectly registered, will be extinguished, if the purchaser in good faith buys the car for value and without notice of the security interest (s 7(1) CSA) (see Montedeen Pty Ltd v Rossfield Nominees [2000] NSWCA 112).
A security interest holder can also apply to the Victorian Civil and Administrative Tribunal (VCAT) for compensation if a security interest was extinguished because it was not entered correctly on the VSR by VicRoads or because of section 7(1) or 7(1A) above (s 25 CSA).

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