Lien Purchase advice

[blee321]

(wasn’t sure where to best post this question but this category seemed reasonable)

I wanted the get some guidance regarding purchasing a car from a private seller with a lien.

2016 model x sale price is 69500
Lien balance is 75000 via alliant

The seller claims car gurus has a service almost like an escrow...

I would prefer to purchase with the seller paying the balance off, receiving a notarized letter from alliant.

Also, has anyone had any experience with transferring a lien? Ie taking over a loan.

Thanks in advance.
Brian

 

[swimgeek]

We just did for a much cheaper used car. We got a bill of sale and everyone signed it, got a cashiers check and went with the seller to their bank, deposited it into their account with them, they got a check from their bank for the lien balance written to the loan company, went with them to send it to the loan company. Loan company sent the title to them, then they sent it to us.

Pretty long process, but in the end it worked.

The loan company will give them a payoff amount on demand, make sure they have that letter so you know they are getting the right amount paid off.

Can also use an escrow, which would be safer and handle all of the paperwork etc. I’m not sure how much or where to find reputable place.

 

[Pentium2004]

(wasn’t sure where to best post this question but this category seemed reasonable)

I wanted the get some guidance regarding purchasing a car from a private seller with a lien.

2016 model x sale price is 69500
Lien balance is 75000 via alliant

The seller claims car gurus has a service almost like an escrow...

I would prefer to purchase with the seller paying the balance off, receiving a notarized letter from alliant.

Also, has anyone had any experience with transferring a lien? Ie taking over a loan.

Thanks in advance.
Brian

You can always assume their loan. Both of you would need to contact the current bank that holds the loan. It will require the typical credit check and usually a week or two.

 

[blee321]

i am glad to hear that people have done it... it just makes me very uneasy, but I guess we'll give it a whirl...

 

[Uncle Paul]

Also be careful. There are scams out there where you are asked to pay the overage and they will send you a check back.

 

[AWD>]

Ive never seen where the asking is lower than lien balance.

I’d recommend they make a payment to bring the lien balance down to the asking or you may have issues with your money being tied up while you’re waiting for them to pay the remaining balance.

If you were to assume the lien, they would need to pay down the balance to the agreed sale price first or you’re assuming the entire amount over current asking.

Seems odd to me, but a legitimate escrow service would hopefully protect you.

If the balance was at or lower than asking, that’s easy and you just get a notarized bill of sale as well as lien satisfaction letter. They mail you the title or hand you the title same day (depending on whether it’s a title holding w/ lien state or not).

Based on the current data you’ve presented, seems a little off. I would not pay them or escrow or assume the lien with them if the lien balance was higher than asking.

 

[PHX2IAD]

We just did for a much cheaper used car. We got a bill of sale and everyone signed it, got a cashiers check and went with the seller to their bank, deposited it into their account with them, they got a check from their bank for the lien balance written to the loan company, went with them to send it to the loan company. Loan company sent the title to them, then they sent it to us.

Pretty long process, but in the end it worked.

The loan company will give them a payoff amount on demand, make sure they have that letter so you know they are getting the right amount paid off.

Can also use an escrow, which would be safer and handle all of the paperwork etc. I’m not sure how much or where to find reputable place.

This! The only other thing I would point out is it can take a few weeks for the bank to release the lien with the state and for the original owner to receive the title. While this process plays out you won't be able to title/tag the car in your name which means you won't be able to drive it. I recommend asking the original owner to request a lien release letter as soon as the balance is received at the bank. Then he/she can then go to the DMV and request a duplicate title free of the lien to provide to you.

 

[IGdawgI]

Are you paying by cash or a loan? In person or site unseen? If in person and loan, meet at your bank and have them do the paperwork. If cash, I would do a loan and have the bank process the paperwork, then pay the loan off shortly after. Not sure about these escrow companies; especially if a link is provided. But, looking at cargurus, it looks like a buying service is provided; I don't think it'll be the most cost efficient for this convenience though.

 

[blee321]

Now I’m terrified...

 

[Pismo]

Ive never seen where the asking is lower than lien balance.

I’d recommend they make a payment to bring the lien balance down to the asking or you may have issues with your money being tied up while you’re waiting for them to pay the remaining balance.

I agree with this, then the bank can give you a "Affidavit in lieu of title" that basically allows the DMV to know that the bank removes all ties and interest in the car.

Then after that at their bank, I would then go strasight to the DMV with that paperwork and have it out of their name. If it is out of state, it gets complicated. Then I would draw up a bill of sale, and put your own terms down the bottom. Eg. "In signing this, the seller releases all interest in the car. In the case where the lien is not paid off, all remaining balances is, and will be, the sole resposnbillity of the seller."

However, you wont receive the affidavid unless the car is paid off, so that brings us full circle to AWD>'s post about having them pay it down.

 

[Jawzipn]

Seems like a lot of work, and a little sketchy. I would recommend finding a better suited Model X. Best of luck.

 

[AWD>]

This! The only other thing I would point out is it can take a few weeks for the bank to release the lien with the state and for the original owner to receive the title. While this process plays out you won't be able to title/tag the car in your name which means you won't be able to drive it. I recommend asking the original owner to request a lien release letter as soon as the balance is received at the bank. Then he/she can then go to the DMV and request a duplicate title free of the lien to provide to you.

There would still be a remaining balance on the lien, unless the seller pays the difference.

 

[TonyT]

This is probably more rare, however with expensive cars and rapid deprecation this may not be too out of the ordinary. My first Tesla was purchased this way. However the difference was only a bit over $1000. The previous owner didn't mind, in fact he mentioned the listed price was the balance of the loan. He realized he was underwater on his loan but rather pay the difference then continue having the extra payment. We got to my bank to pick up my check, and he had his own check to cover the remainder of the payoff. His credit union helped us to a bill of sale and power of attorney form granting me rights to complete all paperwork for the transfer of the car. His Credit union would send him the title, since it can only be done that way. Then he handed the title to me once he received it. It was a pretty long process, and Tesla would not transfer the car to my account until I completed the Title transfer even though I had full power of attorney along with his agreement to Tesla. It was a long process but I got a great deal on the car, and he was very responsive when I wanted to see the car and had additional questions. He kept me updated frequently and allowed me to use his account on my app. We had him enter the credentials and not save them to my keychain.

I would suggest getting a power of attorney allowing you to transfer the title. Check if your DMV has something like this.

Ive never seen where the asking is lower than lien balance.

I’d recommend they make a payment to bring the lien balance down to the asking or you may have issues with your money being tied up while you’re waiting for them to pay the remaining balance.

If you were to assume the lien, they would need to pay down the balance to the agreed sale price first or you’re assuming the entire amount over current asking.

Seems odd to me, but a legitimate escrow service would hopefully protect you.

If the balance was at or lower than asking, that’s easy and you just get a notarized bill of sale as well as lien satisfaction letter. They mail you the title or hand you the title same day (depending on whether it’s a title holding w/ lien state or not).

Based on the current data you’ve presented, seems a little off. I would not pay them or escrow or assume the lien with them if the lien balance was higher than asking.