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After weeks of research we found a car today that we wanted to purchase from a private seller. We took our Penfed blank auto loan bank draft to the seller's bank to cash and no go - bank wants to place a 7 day hold on it. I called Penfed and they can issue another check specifically to the seller, and we were told that the bank would only place a 2 day hold on it. We can get a letter verifying funds, and I assume the seller can also call Penfed to verify funds. So is this how it is normally done? The seller accepts the check, signs over the title to the car, we go on our merry way, he deposits the check and it is released to his account two days later? Or should he not sign over the car until the funds are available? HELP!!! We haven't done this before and the seller is hesitant to sign over the car until the hold is off the check. But there is no way we're letting him deposit the check without taking possession of the car. How does it normally work? The seller is giving us a day to try to figure this out...

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Normally it's done in cash.

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You should see if Penfed will let you deposit check in your bank and then use cash to buy car. If not then only other way is if you have enough money to buy in cash and then a cash out refinance with penfed.

Lightstream will do unsecured loans and will just deposit funds into your account. They have higher rates for private party sales though. Although again you can refinance with penfed.

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Pay in cash or go to your bank with him and draw a cashiers check while he watches. If you knew you were buying a car you should have had your ducks in a row already with funds available at a local bank.

Chase and others also often have notaries on hand who will witness the title signover.

I would never even accept a check as a seller, let alone sign over the title before it clears.

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Sounds like a problem on thier bank side. If they cannot take a check from penfed then they are too paranoid. 7 days is pretty bad.

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Will Penfed wire funds to the seller's bank?

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rschreiber said:   After weeks of research we found a car today that we wanted to purchase from a private seller. We took our Penfed blank auto loan bank draft to the seller's bank to cash and no go - bank wants to place a 7 day hold on it. I called Penfed and they can issue another check specifically to the seller, and we were told that the bank would only place a 2 day hold on it. We can get a letter verifying funds, and I assume the seller can also call Penfed to verify funds. So is this how it is normally done? The seller accepts the check, signs over the title to the car, we go on our merry way, he deposits the check and it is released to his account two days later? Or should he not sign over the car until the funds are available? HELP!!! We haven't done this before and the seller is hesitant to sign over the car until the hold is off the check. But there is no way we're letting him deposit the check without taking possession of the car. How does it normally work? The seller is giving us a day to try to figure this out...
  It comes down to whatever he's comfortable with.  Your job is to get him comfortable. Yes there are sometimes delay in clearing of funds.

What I did when I purchased from a private seller with a loan, was I used my local credit union.  I filled out paperwork in advance, but he met with the loan officer and the check was filled out to him with him there, and issued to him, another to his bank to pay off his loan.  He signed over the title to me.  We delayed pick up on the car for a few days to have everything confirmed.  However, he was local, open and honest.  I met at his house to see the car, I had a bill of sale, a copy of his license, and the title, all that minimized my risk on the 3 day wait.  

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jd2010 said:   Pay in cash or go to your bank with him and draw a cashiers check while he watches. If you knew you were buying a car you should have had your ducks in a row already with funds available at a local bank.

Chase and others also often have notaries on hand who will witness the title signover.

I would never even accept a check as a seller, let alone sign over the title before it clears.

 This!
Also remember this OP: no need to panic over a car deal! Stay calm and composed! He is a seller and you are the buyer - so both of you need to work with each other and both of you need to trust each other! Do a simple bill of sale and put a token deposit of $500 in cash and go to a public notary (and pay approx $10) to get the bill of sale notarized along with the simple terms, next steps, and reasonable timelines spelled out on the bill of sale....this will allow you the necessary window to line up your ducks....also I would do 1 more thing - capture a picture of the odometer (both of you) at the moment of signing your bill of sale and specify that seller is not going to drive the car till you pick up the car (assuming you both agree on the window to be short and reasonable). Or if you both are fine, then go park in a covered paid parking structure and after all is said and done you pay the parking ticket.

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dealgain said:   
jd2010 said:   Pay in cash or go to your bank with him and draw a cashiers check while he watches. If you knew you were buying a car you should have had your ducks in a row already with funds available at a local bank.

Chase and others also often have notaries on hand who will witness the title signover.

I would never even accept a check as a seller, let alone sign over the title before it clears.

 This!
Also remember this OP: no need to panic over a car deal! Stay calm and composed! He is a seller and you are the buyer - so both of you need to work with each other and both of you need to trust each other! Do a simple bill of sale and put a token deposit of $500 in cash and go to a public notary (and pay approx $10) to get the bill of sale notarized along with the simple terms, next steps, and reasonable timelines spelled out on the bill of sale....this will allow you the necessary window to line up your ducks....also I would do 1 more thing - capture a picture of the odometer (both of you) at the moment of signing your bill of sale and specify that seller is not going to drive the car till you pick up the car (assuming you both agree on the window to be short and reasonable). Or if you both are fine, then go park in a covered paid parking structure and after all is said and done you pay the parking ticket.

  
This being fat wallet, most banks have a notary on staff and if you have an account there, they don't charge to notarize stuff. But last time I bought a car, I didn't bother to get it notarized, I just handed over the bank check and he handed over a key. Took all the paperwork to the registry and came back a few days later with plates and drove off. 

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I sold a car to a buyer that used a loan. I drove the car to their specific branch and the loan officer inspected the car to make sure it's a car and not drugs. They cut me a check, I sign off the pink slip and we on our ways.

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Take out loan at seller's bank

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Even having Penfed deposit the funds in your account (they will) won't help you much because they don't have branches most places. You still need to get the funds to another bank, either by check or EFT.

I have been in a Pentagon branch maybe 3 times in 20+ years, and used their physical ATMs about the same number of times. Without a military ID a LOT of their locations are not accessible. Although since they merged with AAFES FCU there is now a branch in Dallas that isn't hard to access.

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In this situation, fronting the money yourself and financing it later would seem to be the most expedient option. But that only works for auto borrowers who don't really need the loan that bad.

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TravelerMSY said:   In this situation, fronting the money yourself and financing it later would seem to be the most expedient option. But that only works for auto borrowers who don't really need the loan that bad.
  
I did it once with a 0% credit card transfer, just refi when the promotional period ended.

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rschreiber said:   The seller accepts the check, signs over the title to the car, we go on our merry way, he deposits the check and it is released to his account two days later? 
  Why wouldn't this be acceptable to the seller if you go together to the bank and get the check? Will the car break down within the 2 days? What kind of car is it and have you had a ppi?

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