Question to knowlegable members of the forum:

If your family member is taking over your car and the car is not fully paid for (still have payments left), how do you transfer the ownership of your car?

I'm a little confused over the lien-holder, title, registration, etc. and not sure who to call first.

TIA,

 

I would say call whoever you're doing the financing from. That way you can transfer payments, too.

 

Yup, call your finance company. My wife used to work for a major finance company and they didnt allow name transfers. So you may have to pay off the loan from them and get a new one in the other persons name.

 

I ran into this situation too. Had to pay off old loan and start a new one.

 

I thought this would be the most appropriate thread in which to throw out this question: How does one get a clear title in a private used car sale when there's a lien on the car? Seems like a catch 22 issue - the person selling needs the money to pay off the loan to clear the lien but the buyer wants a clear title before handing over the money. What am I missing here?

 

So if your family can't plunk down the cash for the car right now, basically they will have to take out a car loan (from any financial institution) to pay off the duration of the loan that you have. Then the new financial institution will have a lien on the car until the new loan is paid off. It's kinda like refinancing a loan, except that you're basically transferring the debt from one entity to another. Another thing to consider is that since your family probably has a much longer credit history, they may even be able to get better rates on this new loan (although with interest rates increasing slightly, that may not be the case).

 

I guess I didn't get my point across - this has little to do with the title of the thread. If some one has a TSX for sale that has a lien on it and I want to give him cash for it how's he going to give me a clear title before I give him the cash?

 

I don't think that the person can do that directly. However you probably could have a contract written up detailing that the money must be used to pay off the loan, and when he receives the title that he must sign it over to you so that you can become the rightful owner. However, if you did that you'd want to make sure that there are stipulations regarding the following:

1) Wear on the car between the time that you paid and the time that you receive the car and title should not be beyond what is expected for the given time (say like a month's wear and tear).
2) The car should be subject to another inspection by you at the time of pick-up, and if wear is beyond what is normal, you should be able to refuse the purchase and receive a refund.

These stipulations would almost certainly require a third party agreed upon by both sides as a sort of arbitrator who would determine what the rightful amount of wear and tear is for the time period and who would be impartial. I don't know for sure, but an escrow service may be in order for such a situation (to ensure that neither side is screwed by the other).

Do not take this as advice from a lawyer. However, in my mind these are probably the kinds of things that you'd have to take care of in such a situation.

 

That's a total non starter - that's like trusting someone on ebay with a 25K item . If I buy a car on a private sale I want the car and clear title AT the time of cash handover just like if there was no lien involved.

 

Well, that's why I recommend some sort of escrow service. That would take care of you getting screwed on the money. Consider it like insurance for such purchasing. However, because of the value of the item being sold, the price of insurance is gonna be kinda steep.

 

Can't be done. The "owner" of the car does not hold the title until the car is paid off. In the meantime, the finance company is the official owner of the car and their name is actually on the title. If the owner chooses to sell the car to you, he must inform his finance company that the vehicle was sold to another party and when he pays off the loan, the finance company will sign the title of the car over to you. You should be able to go with the seller to ensure the finance company gets your information as the new owner.

So the car "owner" can't give you the clean title, but the finance company can. At least, that's how I think it works...

 

Here's what I did:

1) Met with the seller and signed all DMV transfer documents and bill of sale.
2) Went together with the seller to the lienholder (seller's credit union) and I paid the balance of the loan in cash.
3) Seller was given the title to the vehicle which he promptly signed over to me.
4) I gave seller the remaining amt in cash.
5) Seller gave me the keys and the car.

 

He dosent. Once the car is paid off, the title is sent to the seller by the lien company. He signs it and then sends it to you. I did the same thing when I sold my motorcycle to someone. I guess you just have to trust that this will happen. Just make sure you know where they live I guess.

 

The company wont send the buyer the title directly. The orginal owner still needs to sign it. If its a brick and mortar place the finance co is in, that would make it easier.