Anyone ever buy a late model used car from a private party?
The current owner of the car has a loan on it, and of course the bank has a lien and is holding the title. Of course he needs my money to pay off the note before they will give him the title. I'm a little nervous not getting the title at the time of the transaction. It MUST be a common situation to be in, but I've never been it it before. Do I just get a bill of sale and wait for him to deliver the title? Will the bank forward the title to a branch to conclude the transaction? Should I pay by check instead of cash because of this? Wouldn't that slow down the whole process? I'll need the title to apply for my own title and to transfer my registration from our old car. |
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No help here (when am I ever?) ...but what kind of car?!?!?!  |
| Here in Aus you give the money to the bank and get the title from them, there's a legally recognised way of doing it, not sure what it is though. We are told NEVER, EVER give the money to the car owner. They can take your money and their car and leave you with nothing. Things may be different in the US but look into it carefully. |
| Years ago we sold a car this way, I went with the buyer to the local bank, and he got a clear title. Would imagine it should work the same way unless it's an out of state bank. |
| Hi Ron, We buy like that often, and the proper procedure is to go to the bank with the owner. The bank receives your check, obtains your information, and then forwards title to you when available. The owner never touches Your money. Good luck with your car! |
| I see! He did say it was a local bank; what if it wasn't a local bank? My motorhome's title for example, was held by BankOne somewhere out of state from me. I suppose the bank is a good place to make the transaction, I can probably get the bill of sale notarized while there as well. We're looking at a Chevy Impala. Our current Impala has 211,000 miles on it and a check engine light.  |
| So just to clarify, the bank likely won't have the title on hand, but will process it in their normal sweet time? Lol But wait- the seller has to sign the back of the title to transfer it. Hmmmmmmmm..... |
| I think (dont quote me) that's the legal process that happens here. There is some way you can have the bank, and the car rego people organise themselves to get the car signed over to you. So that it happens on the day and you get to take your new car home. Another form that the current owner signs, maybe? Sorry I've left the buying and selling of cars to Wayne, so I'm not up on the details. |
| Ron, I'm off to the gym now so out of time. But ehow has good articles. I dont think this one quite answers your question but there's lots of others. http://www.ehow.com/how_5799650_buy-used-car-person.html Its not telling you how to buy a used car person as the title might suggest.  good luck |
| Ron, I can tell you how it works in New York state. In NY, the owner of the car gets to hold onto the title, even if there is a lien on the car. So when a seller sels a car that has a loan on it, typically, the seller and the buyer go to the bank together. The seller gives the money to the bank and the bank issues the lien release to the seller. The seller then gives the buyer the signed title, the lien relelease, and a bill of sale. The buyer is now free to go to the DMV to title & register the car in his/her name. If the bank is out of state, then a cashier's check can be overnighted to the bank and they can overnight the lien release back to the seller (if the seller is willing to pay for it). It's the same from there. My ex g/f sold a car this way. The buyers gave her the check. She overnighted it to the bank and we asked the bank to send the lien release to the buyer, which they did. We did give the buyer the car & title when they gave us the check. That part was kinda scary. But it cleared OK. |
| I should have clarified and said the bank marked the title clear or paid, I signed the title as the seller and the buyer could send it to the state for a cleared title. |
| Sorry Ron, I should have mentioned that the out of area bank sends the title to the local bank. This is usually requested when the owner puts the car up for sale. Then, all the business is done with one trip to bank by purchaser and seller. If title wasn't sent ahead to local bank, then the bank will request the seller to sign title when available and then forward to you. Personally, I'd request the former scenario from seller, do it all local, and in one trip. |
| So apparently, the fine state of Massachusetts has really mucked up the works. Here's the situation. There is now a thing called a "Virtual Title" for lienholders. They no longer have to take physical posession of a title and safekeep it. When the obligation is satisfied they send an electronic release to the Registry of Motor Vehicles, who then (supposedly within 2-3 business days) mails the title to the owner. Well. Here are the problems for a private party sale: 1) The buyer has no opportunity to inspect the title, to ensure the vehicle actually belongs to the seller(s). ( The buyer can see the registration, but in this state the registration is simply laser printed in black and white on regular paper. Any 5 year old could forge that document in under 1 minute ) 2) The bank will hold the release until the payment method clears -- 1 to 3 business days before sending the release to the Registry. 3) The registry then takes it's processing time, the puts the released title in the mail, sending it to the original owner. 4) The original owner then must sign the title and deliver it to the purchaser to complete the transaction. What's his incentive? His note has already been paid off by the purchaser? 5) The car cannot be registered or insured by the new owner until the title is received, therefore cannot be operated. 6) Massachusetts has the most buyer-friendly "Lemon Law" in the country. It allows the purchaser to return a car to the seller if the car fails inspection ( and some other requirements). However, the car must be inspected and fail within 7 days (they start counting on the first day, so it's really only 6 days by 5:00PM, if you buy the car on a Thursday you have until Wednesday at 5:00PM). An inspection cannot be made until the car is registered, and cannot be registered until the title (and insurance) is in place. This situation must have been created by the Banks, the Registry and/or the Used Car Dealers. The banks love it because they do not have to safekeep the documents, and the Used Car Dealers love it because it makes buying a late model car from a private party nearly impossible. So, knowing all of this I went ahead and purchased the car after a thorough inspection (done by both a private mechanic AND a dealership), due dilligence of the owner's identity and location. We closed the deal at the bank holding the note and used the bank's Notary Public to solemnize the transaction. I withheld $500 from the seller to incentivize the seller to transfer the title expeditiously. I paid the seller IN CASH so he could pay the note in cash to shorten the release process. After the transaction, the bank failed to send the release to the Registry until I called the former (current??) owner and asked him to find out what was going on. Now it's been the 7 days and I am without the money and have an uninsurable car in my garage that can't be driven, I have lost all of my remedies under the Lemon Law, and now need to rent a car for another week. I have asked the bank to pay for the rental for the extra week, but haven't heard bank from them yet. Of course they have no responsibility to me directly, but I figure they might do so to avoid me having to go after their customer and then their customer going after them for failing to perform their task in a timely fashion. Good Lord. Nothing ever goes easy for me, y'know? |
My goodness, that is the most convoluted, 'ripe for ripoff' process I've ever heard  I hope you get it all sorted soon. |
Still no title.... and the bank is refusing to be upstanding.  The are saying that their normal policy is for 5 or 6 days for release, but "as a courtesy" they will release it immediately if asked. Well then... isn't that the policy? LOL I am so frustrated by all of this right now. Anyone wanna buy a car that I have no right to sell? |
| That's unbelievably ridiculous! What a horrid tangle of redtape. |
| So today I really laid into the previous owner to light a fire under him, at the same time I undertook an investigation of what is going on. First "The request to expedite the lien release fell through the cracks"; Even though the title was requested on Saturday the 25th of September, they didn't attempt to release the lien until Friday the 1st of October after they were called about it. Then when they tried to release the lien, the title wasn't properly associated with the loan number in their computer system and they needed to wait for a "System Refresh" to happen before they could try again -- on Monday. On Monday, the State's VINTEK system was (and still is) not functioning. The upshot is: The bank still hasn't released the lien on the title!!!!! Can you believe it? I'm going out of my mind over here! PS The bank is required by law to release the lien within 3 calendar days of the payoff and request. (Yes, the note was paid off in cash). http://www.mass.gov/rmv/rmvnews/2004/lienlawmemo.pdf Now off to rent a low-price vehicle so I can get around. Any legal beagles out there wanna tell me how if I have or how I can gain standing since I wasn't their customer? LOL Or am I gonna have to go after the other victim (the seller who is in breach of his/my contract) and let him go after the bank? I have a nice pair of Chapter 93A steel toed boots I'd really like to try out for the first time. Grrrrrrrrrrr. |
| ron, i was gonna suggest looking for that law, but figured the morons probably didn't write it in. unfortunately, being that you're not the directly injured party i doubt you'll get anywhere, but if you have a friendly lawyer, ask him to look or look yourself in his library. |
oh ron, i just read that law, if you were designated as next owner, i believe you have a case. maybe bank will pay for your rental rather than a civil penalty.  |
| I didn't read the actual law, but the memo talks about the "next lien holder", which I wouldn't be. Anywhoooo, I'll try to read the actual law when I've calmed down! LOL The guy from the bank called me back today to tell me that the VINTEK company informs him that the release the Bank attempted last night failed (as he already had explained) but should be processed properly tonight and should be reflected in the title's online status tomorrow. Hopefully then, the title will be delivered via Post Office by Friday or Saturday. I am cautiously optimistic while not holding my breath. What a mess. Today I sat in the car and played some iPhone songs through the stereo. Not terrible, but I must say there's a certain lack of joy in the experience.  |
| Hey,................ that's Massachussettes for you! |
| Yup, us craaazy folks in Massachusetts. Y'know, the ones that started that whole revolution thingy. (Apologies to my friends across the Pond for that whole bit of nastiness.) Massachusetts may be "the Bluest of Blue States" (even though we are actually a Commonwealth and not a State), but Blue vs. Red registration is only 60-40. The political population is fairly well homogeneous and the Gerrymandering assures that our representation is solidly one-sided. We frequently elect the minority party in state-wide Governor elections, and of course there's that Scott Brown fella. Following the concept of California's Proposition 13, Massachusetts voted for and enacted tax limitations on our commonwealth and our towns limiting our property and excise taxes to a growth rate of 2.5% 30 years ago, transforming us from Taxachusetts to something a little more reasonable over the ensuing decades. Unlike California's law, our version seems to have avoided some major pitfalls to both taxpayer and towns. http://en.wikipedia.org/wiki/Proposition_2%C2%BD We appear to be ready to revolt against our government again by voting to not only roll back the recently hiked sales and excise taxes, but to also push them down to 3%. (We went from 5% to 6.25%, the ballot measure would reduce the rate to 3%). We also had the first popularly elected Black Senator (Ed Brooke) (in office from the late 60's through the 70's). Senator Brooke was a Republican. But our electronic automobile title procedure needs a little tweaking. And the weather could be nicer at times. The lien release went through last night and the Registry avers the title has been printed and mailed. |
| Thank goodness! ( to the last part ) |
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