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I'm about to purchase a used car from a private party. His bank owns the car and is out of state. Assuming I purchase it, he wants me to give him the money for the car and he will write me a receipt and give the car to me. Then he said he will take the money, pay the car off and when the title comes he'll give it to me.

Is there anything I should do to make sure he doesn't just take the money and not pay the car off? I don't want to have a car without a title in case he doesn't pay it off and I'm not sure what the best way is to make sure I protect myself. I don't have any suspicions of him, I just want to do whatever is safest for me.

Any suggestions or is this just a normal chance we take in buying a car like this?

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Well I appreciate all the advise but I think I've got an arrangement in which everyone is protected.

Basically I will sen... (more)

abalazs (Mar. 31, 2008 @ 12:48p) |

Sounds legitimate, the only other thing I would think is to use nationwide bank, and each have you go into that bank.

bauzer714 (Mar. 31, 2008 @ 1:42p) |

Today I received the TX title from the dealer signed off to me at back.

mnsweeps (Apr. 21, 2008 @ 8:48p) |

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Pay him on a business day during business hours and go to the bank with him to make sure he pays off the car.

Make your check to seller payable to seller and lienholder.

Call the lienholder, get a payoff amount and have seller give you a check for the payoff amount made payable to the lienholder.

ClaimsGuy said: Make your check to seller payable to seller and lienholder.

Call the lienholder, get a payoff amount and have seller give you a check for the payoff amount made payable to the lienholder.

Thanks for your advice.
I'm pretty sure he's going to want a bank draft. What do I write to make it payable to seller and lienholder?

When I get the check from the seller, how do I ensure that when I send it to the lienholder that the title goes to me and not him? Or would it go to him and I just pick it up when he gets it?

When i did this once, I just went to the bank with him. I paid off the car, and got the title same day, then I paid him the rest of the money.

I think the only way to do this is at the seller's bank, in person. With the number of good, used cars available, this is an unnecessary risk, unless you can get the unencumbered title in hand when you turn the money over.

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.

Just an opinion...

DDD777 said: I think the only way to do this is at the seller's bank, in person. With the number of good, used cars available, this is an unnecessary risk, unless you can get the unencumbered title in hand when you turn the money over.

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.

Just an opinion...


Yeah I hear where you're coming from. I assumed at first we could go to the bank and get the title but it's located out of state so that isn't possible. I think I'll just pass - it's not a great deal anyways so I can keep looking.

rizorith said: I'm about to purchase a used car from a private party. His bank owns the car and is out of state. Assuming I purchase it, he wants me to give him the money for the car and he will write me a receipt and give the car to me. Then he said he will take the money, pay the car off and when the title comes he'll give it to me.

Is there anything I should do to make sure he doesn't just take the money and not pay the car off? I don't want to have a car without a title in case he doesn't pay it off and I'm not sure what the best way is to make sure I protect myself. I don't have any suspicions of him, I just want to do whatever is safest for me.

Any suggestions or is this just a normal chance we take in buying a car like this?


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.

I don't know if the sellers bank does this, but when I was paying off my loan there was a second pay-out option for that.

Get the number and call the bank holding th title. There are many ways to skin this cat. Make sure you and the lien holder are in synch to make it go down without a hitch. I think what will probably happen is you will have to make out two bank drafts. One for the remaining due to the bank and a smaller one to the owner (assuming he's not upside down). Get ready to spend half a day faxing and signing screwing around.

DO NOT PAY HIM FOR THE CAR.

I remember not long ago a local dealer went BK without paying off the bank for a bunch of trade-ins. Those people all got stuck paying off a car they didn't own any longer.

I was in a similar situation when buying my car. It was relatively inexpensive, so I gave seller a small deposit ($200), had him pay off the car with his friend's money and got it from him when he received the title.

Jus pay a small part of the purchase now.

delzy said: Get the number and call the bank holding th title. There are many ways to skin this cat. Make sure you and the lien holder are in synch to make it go down without a hitch. I think what will probably happen is you will have to make out two bank drafts. One for the remaining due to the bank and a smaller one to the owner (assuming he's not upside down). Get ready to spend half a day faxing and signing screwing around.

DO NOT PAY HIM FOR THE CAR.

I remember not long ago a local dealer went BK without paying off the bank for a bunch of trade-ins. Those people all got stuck paying off a car they didn't own any longer.
The other classic one is that the seller mails you the title and it turns out that the car is salvaged. Buyer beware. Get that carfax report and look at the title before money changes hands!

I am in exactly the same situation as the op and am having a hell of a time figuring out how to do this securely. Did you ever resolve this issue op? My circumstances are that there is a car here in california that is registered in florida under the name of the parents and that is financed through a credit union. 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.

What I'm wondering is whether it's possible to transfer the title to my name with the lien in place (with the authorization of the credit union for me to assume the loan) such that once I send the check to pay the lien it is already in my name and the credit union will simply send it to me?

Anyone have experience doing something like that?

Thanks

Jus pay a small part of the purchase now.

That doesn't always work. Paying the seller a small part may not be enough for the seller to pay off the loan. Believe it or not, a lot of people don't have enough liquid fund to pay off a car loan, even if it's only for a day.

To OP: It adds a little risk when you are buying a used car and the seller doesn't have the title in hand. You should call his finance company and see if they have any advice. I am sure they deal with this type of stuff on a daily basis. Going directly to the finance company doesn't guarantee that you will get the title since paperwork may not be held at a B&M branch.

I try to stay from private party used car where the seller doesn't have title in hand. It's a little less risk many years ago but not now.

abalazs said: I am in exactly the same situation as the op and am having a hell of a time figuring out how to do this securely. Did you ever resolve this issue op? My circumstances are that there is a car here in california that is registered in florida under the name of the parents and that is financed through a credit union. 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.

What I'm wondering is whether it's possible to transfer the title to my name with the lien in place (with the authorization of the credit union for me to assume the loan) such that once I send the check to pay the lien it is already in my name and the credit union will simply send it to me?

Anyone have experience doing something like that?

Thanks


I'ld just walk away from this deal. I don't like the idea of buying a car from anyone that is not actually present when the title is signed/handed over there are lots of other cars out there no need to take alot of extra risk.

I purchased a 2007 Highlander last week from a independent dealer in TX ( I am in CA )for $29,700. I received the car 2 days back and all looks good. The dealer FEDEX the power of attorney and the bill of sale and odometer reader document to me. 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. The title copy shows that the lein ( held by Toyota Credit corp ) has been released as I see the sign of someone from toyota credit on it. I felt safe and bid and won.

In TX dealers can sell cars without the title in their name. 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 ).

In meantime I took car to CA DMV and they saw bill of sale and power of attorney and gave me a temporary registration till end of May. DMV asked me to get back with original title from TX dealer and they will issue the final registration to me.
Then I went to AAA ( for auto insurance ) and they added the car to my existing policy after seeing power of attorney, bill of attorney, and DMV registration.

So now I am waiting for original title from dealer.

How am I safe and pretty sure I can get the title?

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 ).
3) eBay has VPP of $20000 on this auction and VPP guarantees upto $20000 if do not get a clean title from dealer.
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.

Just an FYI as I am going thru a similar situation...

EDITED : I also asked CA DMV that in worst circumstance what happens if i never get the title from TX dealer. CA DMV said I can get the full CA registration and drive the car for n number of years but I CANT sell the vehicle.

A lot of lenders have a procedure for this. The owner fills out a form releasing title to someone else and sends it along with the payoff amount.

As an example, the form for toyota financial is here:
https://my.toyotafinancial.com/consumer/ShowBinary/BEA%20Repository/tfs/en_US/document/payoff_form_toyota.pdf

oopsz said: A lot of lenders have a procedure for this. The owner fills out a form releasing title to someone else and sends it along with the payoff amount.

As an example, the form for toyota financial is here:
https://my.toyotafinancial.com/consumer/ShowBinary/BEA%20Repository/tfs/en_US/document/payoff_form_toyota.pdf


Thanks for the link. I'm dealing with a car that is financed through a small credit union in florida that doesn't seem to have forms like this drawn up. I realize the whole thing seems shady and a hassle, but honestly this car is a pretty good deal and I'd like to go through with the purchase as long as I can protect my interests.

mnsweeps said:
2) The surety bond of $25000 guarantees I get a clean title else I am getting $25000 from insurer ( Southern Insurance ).


This the the bond he had to set up to get a dealer's license?
All well and good if you're the only victim making a claim.

taxmantoo said: mnsweeps said:
2) The surety bond of $25000 guarantees I get a clean title else I am getting $25000 from insurer ( Southern Insurance ).


This the the bond he had to set up to get a dealer's license?
All well and good if you're the only victim making a claim.


True...I got the car tempy registered and insured in CA ....Thats a big thing in right direction...I have been watching his feedback and see he has been getting positives from other buyers..so far so good..

In TX he has to fill a vehicle transfer notification within 30 days of sale else he is liable for criminal / civil acts involving vehicle.

TX vehicle xfer

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. I recently found out that they owe about 95% of what I'm paying for the car to the credit union so I feel better in that the majority of any money I send would be handled by the bank. If it were a scam they would stand to make very little cash from the transaction (although they would have clear title) so it doesn't seem like a very likely scam.

I wouldn't buy a car unless the title was in the seller's hands. Too many horror stories of sellers taking the money to Vegas instead of paying off the loan.

Well I appreciate all the advise but I think I've got an arrangement in which everyone is protected.

Basically I will send the check for the full amount made out to the credit union. They will hold the check without depositing it until they receive the paper title in the mail from the state. 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. They will deposit the check and require the owners to sign the bill of sale and the title to my name. The person selling the car here in California will call the registered owners in florida to ensure that the lien is paid and they received the excess funds and will hand over the keys.

Seems safe as long as I can trust the credit union whom I've verified are members of the NCUA and their phone is listed on that government website. I've also spoken with at least 5 different people in various departments there so either this is the most elaborate scam ever or it's a real credit union in Florida.

Thoughts?

Sounds legitimate, the only other thing I would think is to use nationwide bank, and each have you go into that bank.

mnsweeps said: I purchased a 2007 Highlander last week from a independent dealer in TX ( I am in CA )for $29,700. I received the car 2 days back and all looks good. The dealer FEDEX the power of attorney and the bill of sale and odometer reader document to me. 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. The title copy shows that the lein ( held by Toyota Credit corp ) has been released as I see the sign of someone from toyota credit on it. I felt safe and bid and won.

In TX dealers can sell cars without the title in their name. 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 ).

In meantime I took car to CA DMV and they saw bill of sale and power of attorney and gave me a temporary registration till end of May. DMV asked me to get back with original title from TX dealer and they will issue the final registration to me.
Then I went to AAA ( for auto insurance ) and they added the car to my existing policy after seeing power of attorney, bill of attorney, and DMV registration.

So now I am waiting for original title from dealer.

How am I safe and pretty sure I can get the title?

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 ).
3) eBay has VPP of $20000 on this auction and VPP guarantees upto $20000 if do not get a clean title from dealer.
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.

Just an FYI as I am going thru a similar situation...

EDITED : I also asked CA DMV that in worst circumstance what happens if i never get the title from TX dealer. CA DMV said I can get the full CA registration and drive the car for n number of years but I CANT sell the vehicle.


Today I received the TX title from the dealer signed off to me at back.



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