I'm probably going to buy an s2k very soon. The s2k I want is still being paid off (financed) by it's current owner. I can give him a check in the full amount he wants, and he will sign the title off to me... however, he does not have full ownership of the title... the bank does (correct?). So if we do the transaction, and he does not use the money I gave him to pay off the car, and have the titled fully cleared, will I be stuck with the payments? How safe is this?

Thanks.

 

it doesn't work like that. he doesn't have full ownership of the car. there is a lein (loan) on the title of the car.. a stamp or some typing that has the owners' bank's name and address on it. what happens when this kind of thing goes down (i've sold a car i was paying off, and i've bought a car someone else was paying off)... is you get your check for the car.. he takes it and goes to his bank and pays off his loan. what i did, was i got a reciept from the lady that owned the car i was buying saying that i bought it and was waiting for her bank to mail me the title. i took the car and the reciept, and waited for her bank to send me the title so i could get the car in my name. in my case, i had the ability to go with this chick to her bank when she took my check in. if you can't do this, and don't trust the seller.. just get the name of the sellers' bank. give your bank the name of the other bank, and just have them do it themselves.

hope this helps..

 

The procedure can be a little different depending on the state that you live in.

I bought a car for cash that the previous owner was still paying off. Here's how it worked for me.

Her financing was through Honda. I brought her a certified check for the sale amount. She brought a certified check for the remainder for pay off the car (She was upside down, AND I got a great deal.). Without certified checks, Honda would have to wait a couple weeks to make sure personal checks cleared before sending the title. We signed a bill of sale and had it notorized. At that point both checks went into an envelope and was expressed to Honda. Later, Honda sent her the title. The title from Honda was in her name. She signed the title over to me and dropped it in the mail. Then I just had to bring the title to the DMV to have it reprinted in my name.

Here's the thing. In SC I could drive the car for 45 days with no tags (has since changed), as long as I had the bill of sale. The bill of sale proved I owned the car. I received the title fairly quickly to seal the deal.

Best thing to do is call the DMV (beware of idiots) and any other related offices to determine the best procedure for your situation. It took us several phone calls as neither the seller nor myself had ever done such a transaction.

 

Thanks... One more question... What's a worst case scenario for this type of a purchase... (I never get the title for the car?)

 

I would not hand any money over unless the title is being signed and placed in your hands immediately. This means you should be at whatever bank is holding the lein on the car. It can be paid on the spot and you go home with the title.

IMO, it is MUCH easier if the buyer has the funds available to payoff the lein and have the clear title in his posession before you start any transaction. I have sold cars privately twice, and both times I held the title free and clear.

Worst case scenario is you write a check to the individual, they don't pay the lein, and you're screwed. Of course, you can sue them, and sometime months down the road you'll win a judgement, which they may or may not make good on. It's a big headache and some attorney's fees, and it could be years before you get your money back.

Be very sure you know/trust the seller in this situation.

 

i would say your worst case scenario on it would be if you took the car and the thing exploded. i haven't heard a single horror story when it comes to this kind of thing going down. when you give him a cashiers check (it'll be quicker to get that approved through their bank as opposed to a personal check from you.. because with your personal check they have to talk to your bank and approve the funds.. blah blah), either go with them to their bank and watch them pay it off, or have your banks send the money directly, or simply have the person write out a reciept for the car on paper and have them sign it stating that you've paid for the car that they're selling and you're waiting for the title to be cleared.

and if this dood takes the check and runs off into the sunset laughing like a madman, and jumping up and down clicking his heels... try to get a video, i'd like to see that.

 

Thanks alot everyone... I'll get my bank to contact his... pay the car off, and give him the dividend, or go with him to the bank...

 

Go to your state's DMV website. This will give you the proper procedure to buy a car from a private owner.

You should also contact the seller's lienholder. When I sold a car in the past that I still owned money on, the buyer contacted my bank and made arrangements for payment and for the buyer to recieve the title directly.

Good luck