Looking at buying a MY07 with 21k on it for $20.5k.

Come to find out, he owes more on it than he's selling it for. Would this make you feel apprehensive?

Just trying to be real sure of the quality of the vehicle I purchase, and would rather not buy one with "hidden problems" that some guy is just trying to get rid of.

 

well that's pretty normal..

if the dood is upside down and is willing to take a loss and sell it cheaper than what he's owing on it.. thats normal... AS LONG AS HE PAYS OFF THE REST AT THE SAME TIME OF THE SALE!... remember that...

if he wants to sell it cheaper than wat he owes and dood thinks he can just pay off the rest whenever..thats a no go.. why? because the title needs to be free and clear for you...other than that.. it wont work.

 

Well he surely knows that he will need to pay it all off before I take the car. I just meant from the standpoint that if he was wanting to sell it that way, should I feel like he's trying to hide something?

I've gone over every body panel, gotten under the car, everything, and it all appears to be clean as the proverbial "whistle," just want to make sure I'm getting a clean one.

 

The fact that he owes more than it's worth doesn't say anything about the condition of the car.

The thing you've got to watch out for here, is that his bank won't release the title until the whole thing is paid off. This is easy if it is a local bank and you can walk up to a teller with his check and your check.

If it is through Honda Financial or Citi or something like that, you'll have to send your check and his check to them, they will send the title to him, and you'll have to trust that he signs the title over to you.

Here is some discussion on the topic:
http://forums.nasioc.com/forums/showthread.php?t=357921

 

He is making payments through Honda Financial, but from what I understand, I'd just get him to pay down the loan to the selling price (which the seller has already agreed to do) and then have my bank contact Honda Financial and make the payoff, then my bank is going to handle having the title transferred directly to them without ever going to the seller. (This happens through PoA form the seller signs, in addition to the buy order)

I'm mostly concerned about the vehicle itself, and less about how the "money stuff" happens, as I've got that under control. I just want ot make sure that it's normal for people to sometimes sell S2K's for less than they owe on them.

 

Remember, you pay the bank (or whoever holds the title), not him. If he's taking a loss, he need to have his own check to pay the difference. You need to be talking with the title holder.

 

Yes. Normal for any newer car.

 

The fact that he's selling a car where he's underwater doesn't make me apprehensive about the car. People get in over their heads with bad financial decisions all the time. Perhaps he bought more car than he could afford. Maybe his salary/pay/hours got cut. For whatever reason he can't afford the car anymore, and he's dumping it at a loss.

The headaches of dealing with this type of transaction in a private sale is a bigger issue to me. You need to talk with your lender and make sure they know what's going on. The other guy's bank theoretically holds the title to the car, but not physically. There's probably an entry in a computer somewhere that records the lienholder, with the seller as the "owner", but no one holds a physical title. When you "buy" the car, you're going to hand over a check from your bank, and the guy's going to write a check to pay off the remainder of his loan. Great, his lien will be satisfied.

Now's the big question, and every state is a little different. Does your state have a title transfer procedure for private sales that can be submitted immediately, or do you have to wait for the seller to get issued a physical title to hand over to you? (remember, this is a private transaction, not a dealer purchase). If you're waiting on a physical title, it could take weeks or more than a month.

Personally, I would be reluctant to buy a car in a private sale unless the seller was holding clear title and ready to sign it over to me.

 

Not as far as the car's condition is concerned. I'd be more concerned about the seller paying his portion in a timely manner but you'd need to get an X day payoff quote from his bank anyway to purchase.

 

The process does take 30-45 days, but the seller signs Power of Attorney over to my bank, and they take care of transferring the title directly through Honda Financial. The title NEVER hits the seller's hands.

As far as the payoff on the lien, I'd just have the seller pay the difference up front, so that the owed amount is either = to or less than the purchase amount. All I'd have to do is call my loan officer and tell them to "pull the trigger"

This is of course, after all the paperwork for the Bill of Sale and Power of Attorney is signed and properly submitted to my bank.

I feel I'm still comfortable with the sale. Once again, just getting opinions on whether there may be a "hidden agenda" for letting the car go a little cheaper like that.