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Hi Fatwalleters...

I am looking for some advice. This is my first time buying a used car. After looking over a bunch of used cars from private sellers and dealerships, I think I've finally found one in my range. One caveat is that the seller has an outstanding loan on it. He outlined a process where I can cut a check to the loan company and another check to him for the remaining balance. Then I would have to wait several weeks to get the title. From appearance, the seller doesn't seem shady, but yes, appearances can be deceiving.

Details:
- Car has an outstanding loan of $7,000. I offered ~$10,000 for the car.
- Seller says his bro-in-law's name is on the loan/title
- Says he would require payment to help pay off the loan first. I could cut a check to the loan company and the remaining balance to him. Then they would do title transfer and I would receive it in a few weeks.

Questions:
1. Should I be wary that the title is in his bro in law's name and he is trying to sell it for him? Or as long as he has the paperwork in hand?
2. How can I have him pay off the loan without me handing over the money? I've looked online and some mention the use of a service such as escrow.com.

I wanted to see if others have gone through this process before and what they would advise. Thanks for your suggestions!

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The red flag I see is that you wouldn't get the car until a couple of weeks after payment.

This sounds VERY fishy. If I gave someone money, I would expect a title and a car immediately on my payment. But maybe this is just me. There are plenty of cars out there.

why arent you dealing with the person on the title... fishy

I did similar deal with someone that had a loan on it... I agreed to say upfront half (10K in total also) AND I would keep the car in my garage while they can keep the keys for it until the remainder of the transaction took place.

You dont want anyone driving the car especially when you just gave any $$ for it.

Its way too one sided deal as it stands right now and your on the losing side.

gl

The only way I would do this is if you could pay off the loan, walk into the bank and get the title.

I've sold about 5 cars with an existing loan. I was always able to contact my credit union beforehand and they were able to retrieve my title and have it ready at my local branch. Then, I met the buyer at my bank, he gave me a cashier's check (I had the bank verify it's authenticity), deposited in my account and had them take the balance of the loan out of my account. They then released the title and we all felt very comfortable about the whole transaction.

The real fishy thing is you need to deal with the owner of the car, or see a notarized copy of a power of attorney. Otherwise I wouldn't touch this guy.

PooDonkey said:   I've sold about 5 cars with an existing loan. I was always able to contact my credit union beforehand and they were able to retrieve my title and have it ready at my local branch. Then, I met the buyer at my bank, he gave me a cashier's check (I had the bank verify it's authenticity), deposited in my account and had them take the balance of the loan out of my account. They then released the title and we all felt very comfortable about the whole transaction.

I've purchased one car and sold one car in very similar manner. My understanding is the CU/Bank has a lien on the vehicle, they will not give title to anyone except the person who 'owns' the title.

The way I see it, the only person that can legally sell the car is the person that legally owns the car (and if Joint Ownership, both must sign over Title). I can't sell my brother's car, whether he has a loan on it or not. (All with the exception of power of attorney, like scrouds pointed out.)

Thanks everyone for providing your suggestions. I did actually end up buying the car from this seller. This is how I ended up doing it:

1. After putting down a deposit, seller agreed to leave the car/keys at my carport. I had that part written into the deposit slip.
2. Seller paid off the loan and waited about 2 weeks until the clean title came through. I did not drive the car during that time since I did not have insurance on it, etc. Also had the relative sign all paperwork (deposit, bill of sale, and title).
3. Paid the remaining balance of the car to the seller and used the clean title to transfer it to me at the DMV.

It was a bit of a headache, but it looks like it worked out okay.

Thanks again for everyone's input.



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