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Selling with Loan

Vertex

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Wat? I sold my car to a dealer during covid and they paid it off and put $$ in my pocket. IDK where you got this but its not like this everywhere.
He may be under a misconception because I may know what he is referring to. I know that right now lenders/banks who are financing a vehicle will not let the dealership outright buy the vehicle for my purchase price(example: my lease is ending on a vehicle and dealership wants it but I MYSELF do not want to sell it to them, the dealer would have to pay market value from the bank instead of what my personal buyout on the vehicle was promised to me after my finance ends for my lease).

However, if said person wants to sell their lease vehicle they just have to "purchase" it first which is really just stuff the dealership would take care of anyway if they were going to purchase the vehicle. Lender has no idea what is actually going on and honestly doesn't matter if they do or not cause it is up to the current owner to decide what they do with their vehicle while they have it and have the right to do with it what they want.

Something may have gotten mixed up when explaining this as I was unaware until last year that dealers weren't able to buy out leases without the customer/said person first "purchasing" the vehicle prior to them buying it otherwise he is kind of right. It wouldn't be worth the dealer buying something they will make nothing off trying to re-sell.
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TheSnowmanMafia

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Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.
As everyone else said... this is just wrong.
 

SupremeFocus

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never had issues with either vehicle I bought during COVID, banks and dealers were easy to deal with. If the dealer is over charging for a car then yes the bank is hesitant to loan the money because they don't feel the value is there but it was like that before COVID.
I went to a few dealerships here in so cal and the Acura financial wouldn’t allow a 3rd party to pay off the loan
 

thunderstrike

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After buying a 2019 GT I sold my 2019 Ecoboost to Carmax. They gave me a fair price and a smooth loan payoff working with my bank.
 

NASteve

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I went to a few dealerships here in so cal and the Acura financial wouldn’t allow a 3rd party to pay off the loan

Doesn't make sense, sometimes they put things into contracts that prevent early pay offs or third party payoffs, but when I bought my wife her Ranger and traded my '14 in there was no issues there with transferring anything.
 

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sk47

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That means you will still owe the rest of the loan amount after the selling amount is taken off. As a private person I would not make a deal with another private person who is upside down.









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Hello; I agree with this. The vehicle is not of enough value to pay off the entire loan so the outstanding amount must come from someone's pocket. Dealerships take the chance when we trade in an upside-down vehicle because they have to do so to stay in business, I guess.
Since the vehicle does guarantee some major portion of a loan it seems risky to buy private from someone who owes more than you pay for the car.
In a just world the company holding the paper on the lien would only go after the person who originally made the loan for the difference. However if that person does not pay the amount left still owed and your name is on the paper work it might get complicated. You may wind up having a hard time getting a clear title for one thing.
Not something I have ever done so i may be misinformed.
 

young at heart

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Hello; I agree with this. The vehicle is not of enough value to pay off the entire loan so the outstanding amount must come from someone's pocket. Dealerships take the chance when we trade in an upside-down vehicle because they have to do so to stay in business, I guess.
Since the vehicle does guarantee some major portion of a loan it seems risky to buy private from someone who owes more than you pay for the car.
In a just world the company holding the paper on the lien would only go after the person who originally made the loan for the difference. However if that person does not pay the amount left still owed and your name is on the paper work it might get complicated. You may wind up having a hard time getting a clear title for one thing.
Not something I have ever done so i may be misinformed.
There seems to be a lot of confusion here. Y’all do realize that the lienholder is not going to release the title until the lien is satisfied, do you not? This means that an upside down seller will have to bring cash to the table to be able to get his title so he can make the sale.
 

sk47

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There seems to be a lot of confusion here. Y’all do realize that the lienholder is not going to release the title until the lien is satisfied, do you not? This means that an upside down seller will have to bring cash to the table to be able to get his title so he can make the sale.
Hello; Yes this is what I have been saying.
 

young at heart

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Hello; Yes this is what I have been saying.
“However if that person does not pay the amount left still owed and your name is on the paper work it might get complicated. You may wind up having a hard time getting a clear title for one thing.”

I guess I didn’t understand what you meant by the above statement. It seemed to me that you thought the seller was on the honor system to pay the deficit balance to the lender. There’s no danger to the buyer; the lienholder won’t release the title until their lien is satisfied.
 

sk47

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“However if that person does not pay the amount left still owed and your name is on the paper work it might get complicated. You may wind up having a hard time getting a clear title for one thing.”

I guess I didn’t understand what you meant by the above statement. It seemed to me that you thought the seller was on the honor system to pay the deficit balance to the lender. There’s no danger to the buyer; the lienholder won’t release the title until their lien is satisfied.
Hello; Let me use two examples. Several years ago I went to Georgia to a place outside of Atlanta to look at a 65 Mustang. It was a nice restomod sort of vehicle. Seller had a large pile of receipts and paper work about the work done. However he did not have a title. I backed away from the deal but did go to my local clerk in TN. Turns out he was correct in that TN will honor and will issue a new title for some cars from Georgia. I do not recall the details and did not continue with the purchase as the vin plate had been painted over and the numbers/letters were hard to decipher. I was surprised that a car could be sold with out a title. I do not know how you determine if a lien is outstanding in such a case. I was offered a bill of sale only.

Another time i was considering a Toyota MR2. The seller told me there was a loan outstanding on the vehicle. I finally suggested he work out a way to clear the title and get back to me. He wanted me to pay him first and allow him to use my money to pay off the note. I declined. I forget why he was not keen on us meeting at his financial institution. He was a slick talker with an answer for everything. That was why i wanted a clear title to look at.

To me the bottom line when buying from a private seller is to look for a clear title. Not just a bill of sale. I can see going to a bank or some such well known financial institution. Not sure i would be comfortable in some cubby hole title loan place.

There was a Ford dealership in my area a few decades ago pulling some stunts. Turns out a fellow bought from them and was to be on a Ford based credit program. The dealership was not sending in the money to Ford and the buyer had his vehicle repoed is the story I heard. I do not know the details but the buyer eventually got his Ford back and the dealership changed hands.

I do not know everything there is to know about titles and possible scams. If the vehicle sells for more than is owed then the buyer could cut a check to the bank for what is owed and a different check for the difference.
If upside down the seller will have to pay the amount owed above what the buyer is willing to pay. Going thru a bank or dealership might be made to work. I do not know what a financial institution might work out with the seller.
 

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ctandc72

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That's one reason I finance (or refinance) all my vehicles with my local credit union I've been with for 20+ years. First off - always better rates / terms. Second, they are EASY to deal with when I sell vehicles to anyone when their is still a lien.
 

dfanucci

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That's one reason I finance (or refinance) all my vehicles with my local credit union I've been with for 20+ years. First off - always better rates / terms. Second, they are EASY to deal with when I sell vehicles to anyone when their is still a lien.
Yup. Usually I finance with my Credit Union as well. I bought my 20 GT right in the middle of the Covid Shutdown. Ford Credit gave me zero percent interest on a 72 month, and my CU couldn't match it.
 

jenniferdehner

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You should absolutely contact the lender to make arrangements. It's been a long time, but buying a car in such scenario was simple. We had a pre-arranged meeting at the seller's bank to confirm that his financing had been approved. I completed the papers there and it was completed rather promptly. You can also read information about loan with no fax on the Internet. I'm sure hundreds, if not thousands, of individuals around the country do the same thing every day.
 
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joe603

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Like most have said, just call your bank and get the details. Most likely the person buying will meet you at the bank with a cashiers check. The bank will transfer the title after the loan is paid off. (hopefully you own less than what the car is worth, or you have to add funds to the loan).
 

Det_Riot

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Here's a couple other ways I've sold things in the past to make it work.

-buyer pays for car, takes car, and Bill of sale with them along with copy of each parties drivers license
-seller takes money and pays car off, acquiring a fresh released title
-Seller provides signed off and clear title to buyer, who has been holding car as collatoral. Everyone wins.

Alternately, the buyer could wire funds directly to financial instituation with both buyer and seller meeting at bank to perform handoff of keys/title
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