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How should I sell a car if it still has a lien on it?

#1 User is offline   pdj 

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Posted 15 April 2011 - 12:19 PM

Hello gentlemen,

I apologize if this question is elementary, it's my first time selling a car privately that is financed. I have researched the topic and called the bank that has the title of the car (multiple times) but I keep getting different answers.

So my question is, legally, what is the safest and most efficient way of selling a car privately that is financed and still has a lien on it?

***Paying the car off and then selling it is NOT an option. Thanks in advance!
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#2 User is offline   s2kpdx01 

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Posted 15 April 2011 - 12:30 PM

you can use craigslist or whatever you want.

If you are underwater it probably isn't possible and you will need to pay the loan off when you sell it.

I would talk to your lender to find out the best way. They may have forms for you to use.

The basic idea is get the cashiers check from the buyer and pay off your loan with it and your bank will send the title to the new owner or new owners lien holder.

There have been some cashier check scams in the past. Be wary of shipping the car anywhere until you have waited the 7 days (i think it is 7) for the check to clear.

#3 User is offline   pdj 

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Posted 15 April 2011 - 12:37 PM

Thanks for your quick response! I should have made this clear, I will not be underwater. The car is worth ~17k and I have about ~12k to pay off. It just seems as though there is a ton of trust involved, and personally if I were a buyer I wouldn't trust any seller with my 17k. Are there forms that would aid in establishing some kind of guarantee for the buyer of my car? To my understanding a Bill of Sale is only for personal use.

#4 User is offline   s2kpdx01 

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Posted 15 April 2011 - 12:47 PM

View Postpdj, on 15 April 2011 - 12:37 PM, said:

Thanks for your quick response! I should have made this clear, I will not be underwater. The car is worth ~17k and I have about ~12k to pay off. It just seems as though there is a ton of trust involved, and personally if I were a buyer I wouldn't trust any seller with my 17k. Are there forms that would aid in establishing some kind of guarantee for the buyer of my car? To my understanding a Bill of Sale is only for personal use.

yeah, bill of sales are sort of useful if it went to court after a problem, but that's about it.

Talk to you lender. They may have forms and advice to help.

I always finance mine through a local credit union so they have always been helpful.

Good luck.

#5 User is offline   Marekv 

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Posted 15 April 2011 - 12:55 PM

When I bought my car from a person with a loan on it I had them come with me to my bank branch to get the cashiers check so they could see it physically issued and know it was legit. I then met them at their bank that had the title and paid the bank with the check, then the bank cut the owner their portion of the check.
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#6 User is offline   NuncoStr8 

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Posted 15 April 2011 - 02:31 PM

View PostMarekv, on 15 April 2011 - 12:55 PM, said:

When I bought my car from a person with a loan on it I had them come with me to my bank branch to get the cashiers check so they could see it physically issued and know it was legit. I then met them at their bank that had the title and paid the bank with the check, then the bank cut the owner their portion of the check.


That's what I was thinking. It's how I've done it in the past.

#7 User is offline   North Star 

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Posted 15 April 2011 - 03:38 PM

View Postpdj, on 15 April 2011 - 12:37 PM, said:

Thanks for your quick response! I should have made this clear, I will not be underwater. The car is worth ~17k and I have about ~12k to pay off. It just seems as though there is a ton of trust involved, and personally if I were a buyer I wouldn't trust any seller with my 17k. Are there forms that would aid in establishing some kind of guarantee for the buyer of my car? To my understanding a Bill of Sale is only for personal use.


If you're selling for $17k, have the buyer give you a check for $5k, and have him also make a check for $12k payable to the bank with instructions to send the pink to him.
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#8 User is offline   waltk88 

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Posted 15 April 2011 - 08:21 PM

It's pretty simple if the bank providing your car loan has a branch location convenient for both you and the buyer. It gets complicated if you can't get to a branch.

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