Selling a car with a lean

[daveleau]

We are thinking of selling our Mazda, but it isn't paid off yet. I have never sold a car that was not paid off already. How do you go about getting the title after you pay off the lean? We have some $$ in the account to cover the amount of money we are upside-down in the car. Do we just sell the car, give them the keys and tell the lean holder where to send the title? It seems like this would be a way for a dishonest person to keep the title hostage. Of course I would never do that, but I am wondering how this process works so we can get rid f this car payment.

Thanks a million!
Dave

[osprey4]

That's basically it, depending on the state. You sell the car, pay off the loan with the proceeds, the bank (lien-holder) releases the title to you and you sign it over to the purchaser. The title is still in your name. A lien just means they're keeping the title until it's paid.

I suggest you contact your state DMV for details.

[wju425]

I wouldn't turn over a car while the title's in your name. If something happened you can be held liable. If you know the buyer very well you may be ok but I wouldn't do it without a signed contract. Like osprey4 said talk to your DMV about it.

\o/ Billy

[Siliconjunkie]

I had to pay off the car before I could sell it, basically. I worked with their bank and my bank to do it. Since you really don't have a title to give them per se.

I would call the bank to see what they want you to do. DMV problably won't be much help since all they can do is control the lein in the title. It has to be released before it can be transferred. How you arrange that is between you and the leinholder. At least in TX they are pretty near worthless.

[Ed_S]

Dave, do it right or it'll haunt you eventually. Best way is to transact the deal at the bank which holds the title. That's not always possible, though.

>Find out from the lienholder how much time it takes to get the title in hand after payoff. Could be immediate, could take a while.

>Get your deal with the buyer firmed up & get a cash deposit. Give them a reciept, marked "non-refundable deposit on {vehicle}, balance due of $$ in xx days upon delivery of vehicle & title" (Generally $100 is enough, but whatever you think guarantees they're going to follow through)

>Since you have the money, pay off the loan & get the title.

>Transact the deal & redeposit the money wherever it came from.

Also, make out an "as-is" disclaimer for the buyer to sign - no matter if the car's perfect, just do it. CYA. Both parties get a copy, and you keep yours LONG-TERM! But also be sure to disclose EVERYTHING you know about it.

Any other way involves too much trust by one or the other. This way covers both buyer & seller, but mostly seller. I've bought & sold a bunch of vehicles over the years, & gotten burned more than once. I've even had titles come back years later because the buyer failed to properly register one, that's why I say the seller needs to document the sale & keep copies indefinately!