lien on title....

[motuman]

Hey guys,

I am just relizing that every car I have bought in the last 30 years had a clear title, until now. How do you go about buying a car from a private party that has a lien on the title? I have heard stories of sellers taking the puchase moeny but failing to pay off the lien, leaving you stuck with a bad title. I have also heard of escrow companies that handle the deal, but isn't there an easier way?

Since this must be an everyday ooccurance there must be a straight forward way to handle it (aside from taking on honest sounding seller at his word).

Thanks.

[uscharalph]

I'd have him give me a clean title or NO GO!

[632 Regal]

I think you can handle this through your bank.

[DanH]

The title usually says who the lien holder is, you can try contacting that bank about the transaction and find out how much of the money goes to them. If its more than the selling price, then you'll likely have some issues. Otherwise, you may be able to pay the bank what they're owed and the rest to the seller.

Make sure you write up a purchase agreement detailing the whole transaction, if the seller is honest, they'll agree to it.

Good Luck.

[DanH]

Also, don't exchange any money until you have in your hands an official document from the lienholder stating that the lien has been removed from that title.


The title usually says who the lien holder is, you can try contacting that bank about the transaction and find out how much of the money goes to them. If its more than the selling price, then you'll likely have some issues. Otherwise, you may be able to pay the bank what they're owed and the rest to the seller.

Make sure you write up a purchase agreement detailing the whole transaction, if the seller is honest, they'll agree to it.

Good Luck.

[mikell]

I agree - try this: Find out who holds the lien - probably the Seller's bank. Then, tell the Seller that you'll go with him to his bank. Pay the bank the part of the purchase price that the Seller owes the bank, and the rest to the Seller. The bank officer will sign the proper lien release, while the Seller signs the title transfer assignment to you. Banks will have a notary in house, which you will need anyway in most states. If the lien holder is some distant behemouth like GMAC or Ford Motor Credit, this obviously will not work. Good luck.

[motuman]

FWIW - The seller is out of town, and the lienholder is a large corp., also out of town (for both of us).

Thanks again.

[Sweetwater]

FWIW - The seller is out of town, and the lienholder is a large corp., also out of town (for both of us).

Thanks again.

It's a warning flag, IMO, if the seller can't deliver a free title. The only times I've had a lienholder, I went to the institution and cleared it as part of the deal. I don't think I'd do a deal when title isn't guaranteed to be delivered. Escrow services can be a setup for a scam.......

[motuman]

What's the turn around time for clearing a title? How long after he pays the lienholder will he have to wait for a clear title, which he can then give to me?

Or does he just get a document showing the lienholder has been paid, and gives that to me along with the old title?

Thanks.

[IN10CT]

If it is a financing lien, go with him to the bank and stand behind him while he pays the loan off. This is what I have done, and done for others.

An alternate and not necessarily recommended approach could be to reduce the selling price by the lien amount, then settle the lien yourself.

[Jean@MtMiguel]

If it is a financing lien, go with him to the bank and stand behind him while he pays the loan off. This is what I have done, and done for others.

An alternate and not necessarily recommended approach could be to reduce the selling price by the lien amount, then settle the lien yourself.
Here in California, the DMV will provide the clear title, that take weeks of waiting, just for your protection give the AAA (Automobile Club), and they will provide you with most accurate answer in regards to your dilemna. A quote from themis this: ( NO CLEAR TITLE/NO SALE )

[mikell]

FWIW - The seller is out of town, and the lienholder is a large corp., also out of town (for both of us).

Thanks again.

If you have a bank that is lending you some of the money, ask them - they should be able to deal directly with the other lender. As your lien holder, your bank will have as much incentive as you to be sure it's all done properly, and institutions are used to dealing with each other like this - they move money by wire and there are laws that govern, which institutions abide by when individuals might fudge. Besides, your lender would probably not release the money to you unless you can deliver a clear title in return.

Even if you are using your own cash -
Don't take the seller's word for the amount that's due and then deal with his lender - you'll never shake the headache.
I'd advise against using a third party (different than one of the lenders involved) escrow agent - again, too much chance for a snafu.

This is not rocket science - your seller should have figured this out before putting the car on the market. If he wants to sell as badly as you want to buy, put the whole mess back in his lap and tell him to call you when he's really ready to do the deal.