used car - private party sale

[WM]

DH and I finally decided to replace his old car with a newer one. We found one we like at a good price from a private seller and agreed on the terms. No money has changed hands yet, since we need to order a cashier's check from our out-of-town bank, and the seller didn't care if we left a deposit. We're planning to go over Tuesday, when we'll have the check, and do the sale.

The wrinkle is, she's still making payments on the car, so she doesn't have the title. She needs our money to pay off the loan, at which point the bank will send her the title (10 days or so). We can't register the car without the title, and as the seller, she keeps the license plates. So we'll take the car home with our Bill of Sale but we can't do much with it.

I've never bought a used car from someone who didn't have title to the car. She seems entirely trustworthy, but of course it occurs to me that she could take our money and do whatever she wants with it, not pay off the loan, and then even if we have possession of the car, that doesn't do us much good.

Any thoughts? Is there some common way to resolve this issue? Can I get the cashier's check made out to her lender and have them send me the title directly? Or something else?

 

[Gumby]

Call her lender and ask them. I'm sure they have ample experience on this issue.

 

[Bestwifeever]

Gumby has an excellent suggestion, as always.

My first thought was that the title may not even be in her name; the call to the lender will verify that. Also, she may owe more than she is selling the car for, and the lender can let you know that too.

 

[73ss454]

I'd find out what the payoff is and make that payment to the lender direct. This way they will hand you the title at that point. If you pay the seller in full and take the car there's no way to know if she used the money to make the payoff.

 

[OAG]

I would go with the seller (or meet them there) to the financial institution that holds the title. Give them the check, they give you the title, and give the seller the change. You get the vehicle at that point, and give the seller a ride home if necessary.

 

[Darryl]

Here's betting this simple transaction gets complicated.

As OAG said you want to be at the seller's financial institution with them and sort out your options. They may want you to wire in or ACH they may treat the check you already ordered more kindly just by documenting who you are.
If you just wait for your check to arrive and give it to seller and they're totally honest you still risk the sellers bank using an extended time days? weeks? to clear your check and release the title.

 

[WM]

Thanks for these ideas.

I think I/she will need to call the lender and figure out what the best plan is. She banks locally with Wells Fargo, but she said the loan is processed at another location (Iowa?) and her understanding was that once the loan was paid off it would take 10 days for her to receive the title. But maybe if she and I go together to her local branch we can get everything worked out, I like that idea.

 

[WM]

Ok, I emailed the seller and she immediately called her bank and I think we have a plan.

I'll get the cashier's check made out to her, and we'll both go to her bank and the teller will be able to close out the loan and order the title. It will take 10 days to get the title because it's held at another bank out of state.

The title still has to go to the seller first, and she'll have to sign it over to us, which is the only shaky part. However, she'll hand over the car at the bank, and we'll also get the bill of sale notarized. So I can't really think of anything else shady she could do with the title unless she's much more dishonest than she seems.

 

[Free To Canoe]

To do this takes more guts than I got.
Best of luck to you.

Free to Canoe

 

[Koolau]

I'd have to agree with Free to Canoe. I'd want the title signed over BEFORE I handed anyone a check. Also, having the car could be worse than NOT having it as it's NOT YOUR CAR until the title says it is. She could call the police and say you took it without her permission. Just too many ifs/buts here for me. I know you trust her and all, but still... This is just too big a deal to take any chances with. I would deal direct with the title holder (loan company/bank/etc. at least to start.) Just MHO.

Good luck!

 

[Telly]

I'd pass on the car and the seller. Too many possibilities of you getting cheated. You can find another car somewhere else, without these problems.

Your comment "She seems entirely trustworthy..." well, a good scammer will appear that way if they are successful. Maybe it's legit after all, but why take the risk when you can look around and find another deal without these strings?

 

[aaronc879]

I've been screwed over in the past so anything that's even a little shady is a no-go as far as i'm concerned. Be careful!

 

[cantlogin]

... It will take 10 days to get the title because it's held at another bank out of state...

It is wrong to assume that the financial institution will do what they are supposed to do. The title might very well be "misplaced" and once the bank has the money, the "run around pump" will have been primed. Don't be surprised if you hear the phrases, "a few more days". "It should have been here today", "there won't be anyone in the office until Tuesday" and "I'll call you as soon as I find out". Ten days can turn into five months. Everything might go smoothly and have the title in a week but the alternate scenario really is quite common.

 

[dex]

Gumby was/is a lawyer and you are not taking his advise? You should at least go to your bank or a car dealership and ask how they handle these transactions.

Car dealership do these transactions all the time. I would question that they have the title go to the seller and rely upon the seller to receive the title, sign it and get it to the dealer.

 

[W2R]

I'd have to agree with Free to Canoe. I'd want the title signed over BEFORE I handed anyone a check. Also, having the car could be worse than NOT having it as it's NOT YOUR CAR until the title says it is. She could call the police and say you took it without her permission. Just too many ifs/buts here for me. I know you trust her and all, but still... This is just too big a deal to take any chances with. I would deal direct with the title holder (loan company/bank/etc. at least to start.) Just MHO.

Good luck!

I feel the same way as Koolau about this. Have the seller pay off the car and get the title in hand first, even if a payday loan is necessary in order to do that. To expect you to pay for the car and get nothing but a promise in return is unreasonable.

She could be upside down on the car, so be careful about that so that you don't end up having to pay the difference.

 

[JOHNNIE36]

I've done this many times as the seller but never as the buyer. The normal process takes time and trust. EX: sold our van to nephew in MI. He sent cashiers check to me in FL, made out to me and GMAC. I endorsed it and overnight mailed to GMAC payoff center in Louisville, KY. They in turn mailed me clear title in about a week. In the meantime, nephew in MI contracted with a carhauler to have van transported from FL to MI. Then I had to mail him the title. This was a family affair so no problem, but one can see the pitfalls in the process. You all talk like you just go down to local bank and transfer the title. Not always that easy and I'd like to see someone "in the know" respond on the best way to take care of situations like this. Thanks in advance.

 

[WM]

Ok, well you're all making me nervous.

She can't very well call the police and report that I stole the car when I'll have a notarized bill of sale and two witnesses at the bank, plus numerous emails back and forth between us talking about the sale.

I'll know the loan is paid off because I'll be standing with the buyer at the teller's window when my check is deposited and the title is ordered.

Runaround from the bank, I don't have an answer to. If the title is held elsewhere (which the teller should be able to confirm) then we're just going to have to wait for it.

I called a local dealer and asked how they handle this. They said they have the seller in this situation sign a power of attorney so that the dealer can get the title directly from the lender. Which appeals to me, but I don't understand exactly what that would look like. Any ideas?

Edit: I forgot to say that she also is sending me the VIN tonight, so I'll check it on Carfax and a couple sites the DMV suggests to make sure it's not stolen or anything. She also said the car's only had two owners, and they brought it from CA, so I should also be able to confirm that.

 

[Koolau]

Ok, well you're all making me nervous.

If this DOESN'T make you nervous, I'd worry for you. Sounds like you've done MOST of your homework, though. Still, I would be very leery about the issues of the title. Again, I wish you best luck!

 

[dex]

I called a local dealer and asked how they handle this. They said they have the seller in this situation sign a power of attorney so that the dealer can get the title directly from the lender. Which appeals to me, but I don't understand exactly what that would look like. Any ideas?

They have this newfangled thing now on the WWW Internet thingy called google.
I think how it works is that you type in what you want to know and the whole population of India looks for it for you and then gives you a line you just press on the rodent and it takes to where what you want to know is located. I don't use the service too much because I'm against child labor. Then again, they do get paid for it. So I'm conflicted.

Might just mosey on down to that car dealership and ask for an example of their form.

They found this for you.

http://www.google.com/search?q=powe...s=org.mozilla:en-US:official&client=firefox-ahttp://www.google.com/search?hl=en&...spN&q=power+of+attorney+car+title&btnG=Search


========
I'm sorry - I just had to do it - I know I'm wrong

 

[Koolau]

They have this newfangled thing now on the WWW Internet thingy called google.
I think how it works is that you type in what you want to know and the whole population of India looks for it for you and then gives you a line you just press on the rodent and it takes to where what you want to know is located. I don't use the service too much because I'm against child labor. Then again, they do get paid for it. So I'm conflicted.

Might just mosey on down to that car dealership and ask for an example of their form.

They found this for you.

http://www.google.com/search?q=powe...s=org.mozilla:en-US:official&client=firefox-ahttp://www.google.com/search?hl=en&...spN&q=power+of+attorney+car+title&btnG=Search


========
I'm sorry - I just had to do it - I know I'm wrong

dex, Have you been watching old episodes of HOUSE again??

 

[haha]

Ok, well you're all making me nervous.

We are all very careful with money. Except of course in the stock market, where we cough it up in $100K gobs.

Ha

 

[Darryl]

Ok, well you're all making me nervous.
quote]

WM this deal would make me nervous but not afraid.

I bought a truck a few years ago that was not paid off. As I recall I gave the seller the full purchase price before the lien was cleared. I knew who he was, where he lived and trusted he would go take care of it. He offered to meet me at his bank so I could pay the balance direct and just give him his equity portion and I declined. I'm a little tougher on buyers especially if I don't know them. Cash only.

 

[WM]

Ok, I think I may have found something useful.

Finding a general power of attorney is easy, my question was how to scope it so that the seller feels confident that I can only use it for the car title stuff. Plus I need the bank teller to know what to do with it, which it turns out is also questionable. I called several bank branches and got a different answer at each.

The first guy said I could have the title sent to me, with a general power of attorney. The second woman said I needed to get DMV forms but it turned out she was talking about transferring the title when it comes in. The third one said there was no way to send me the title even with a power of attorney but she did suggest writing up the terms of the deal, including that the seller will sign the title over when it comes, and getting that notarized along with the bill of sale.

It turns out that the state DMV's website has a power of attorney that's just for automobiles, and it lists the specific transactions and identifies the vehicle it pertains to. I don't think the seller should have qualms about signing it, and hopefully the bank will be able to figure out how to deal with it. I think this is better, although it probably also increases the chances of confusion with the title paperwork.

 

[Nords]

I don't think the seller should have qualms about signing it, and hopefully the bank will be able to figure out how to deal with it. I think this is better, although it probably also increases the chances of confusion with the title paperwork.

I think you'd better be getting a killer price on this vehicle. I bet you're the only buyer who's lasted long enough to get to this point...

 

[WM]

It actually is a good price, although not so good that it seems too good to be true.

I thought about the form some more, and I think it doesn't have to be as hard as I thought. I think we do the bank transaction and she instructs them to send the title to my address. No POA needed.

It's when the title arrives, I take the notarized power of attorney to the DMV and, acting on behalf of the seller, sign the title over to DH.

Which makes more sense, because there's no way this should have to be so complicated - it must come up all the time. But thanks everyone for your ideas and comments. I'll let you know how it turns out.