How to sell a car I still have a lien on? (Phoenix: for sale, credit) - Arizona (AZ) - City-Data Forum

Rick Lee · 10-30-2008, 01:18 PM

I have a buyer coming to look at my car for sale tomorrow, but I don't have the cash to pay it off easily available at the moment. It's financed with a bank in OH. So it's not like a buyer could just meet me over there to pay it off with a bank check. How does a title transfer work in this kind of scenario? I know the bank can send me the title once it's paid off, but that might take up to two weeks. How would the buyer be able to drive it legally?

kdog · 10-30-2008, 03:26 PM

Well, you could toss the prospective buyer the keys and let him borrow it until you own the car outright, but you'd be crazy to do so. The bottom line is that there's no way you can legally sell the car until you have possession of the title. And it's worse than you think. You don't get the title from the bank; you need a title issued by the AZ MVD. That entails getting the bank to send the MVD a release of lien. So you're caught between two huge bureaucracies, a bank and the state government. Now in theory this could be done in a single day. You could wire the payoff to the bank. The MVD is set up to accept faxed lien releases, whereupon they will do an emergency title issuance. But more than likely, it will take at least a couple of weeks -- you know how banks are.

And your strategy for paying off the loan with the payment from the buyer won't work. He's not going to release the funds until he gets the title, and you're not getting that until the loan is paid off. Catch-22. So borrow the money from somewhere, and pay off the car. Meanwhile, you should inform interested buyers that the vehicle's title isn't clear and won't be for an indeterminate amount of time, so that you're not wasting anybody's time.

Vinny536 · 10-30-2008, 03:51 PM

call your bank. people in your scenario do this all the time, but I'm not sure of the process. Call you lender, tell them you want to sell it and need to know the process of releasing the title to the new buyer.

Bummer · 10-30-2008, 03:56 PM

Quote:

Originally Posted by 61scout80

call your bank. people in your scenario do this all the time, but I'm not sure of the process. Call you lender, tell them you want to sell it and need to know the process of releasing the title to the new buyer.

I agree, 61Scout . . . good advice.

Also, with wire transfers and FedEx Overnight, the transaction should not be too difficult.

Rick Lee · 10-30-2008, 04:25 PM

I just called the bank and they said a FedEx'ed check would actually clear faster than a wire transfer and that it would take 5-7 business day from then to release the title. This is really a pain in the butt. How do people do provate party sales this way? I doubt the buyer is gonna be excited about me holding onto the car (though I'd not drive it) for a week or so after he pays me. I know about the three day trip permit from DMV, but that's not gonna be longer enough either.

roundball · 10-30-2008, 04:46 PM

My wife sold her car a few months ago. GMAC had her title. She and the buyer went to his credit union that he was getting the loan from, she signed some papers, and the process was over in about 30 minutes.

He didn't pay cash. His CU purchased it. They cut us a check for the difference on our loan at the time. Not sure if your situation is the same. Hope it helps.

kdog · 10-30-2008, 05:12 PM

A seller would have to have rocks in his head to pay for a car in full without taking possession of it. I wouldn't plan on it.

The three-day permit is so that the buyer can get the car to the MVD and get the titled reissued under his name and get it registered. It doesn't address your situation.

I bought a car this past spring from somebody in Phoenix in a situation like this. I put a small deposit on it, and it took the seller over two weeks to get the title, despite countless phone calls on his part, FedEx's etc. And he had to borrow the money to pay off the loan. No way was I going to loan it to him, which is what you seem to be counting on. Think about it. If you were the buyer, would you?

Vinny536 · 10-30-2008, 06:03 PM

Quote:

Originally Posted by Rick Lee

I just called the bank and they said a FedEx'ed check would actually clear faster than a wire transfer and that it would take 5-7 business day from then to release the title. This is really a pain in the butt. How do people do provate party sales this way? I doubt the buyer is gonna be excited about me holding onto the car (though I'd not drive it) for a week or so after he pays me. I know about the three day trip permit from DMV, but that's not gonna be longer enough either.

how much are we talking? small enough that you can get a personal loan through your bank here, then sell it after you get the title?

if the original bank doesn't have a way out try the bank you use here, maybe they have an option for you. I also wouldn't hand you money for a vehicle that i don't get to take home. just seems to leave me too apt to lose my dough.

Rick Lee · 10-30-2008, 06:25 PM

I owe $11,700 on it. Even if I had the cash to pay it off tomorrow, it seems like it would take a good week or so to get the title in hand. I'm talking about BMW Financial Services. They really aren't being as helpful as I'm used to from them. Why can't the buyer and I just go to his bank and do what Roundball's wife did? That seems to be the easiest thing to do. I could probably get a short-term personal loan tomorrow to pay it off. I mean, I have the money but it's not liquid and I don't feel like selling stuff to get it. But then I don't want to pay the car off and then not be able to sell it either. And I haven't gotten a lot of bites on this.

Vinny536 · 10-30-2008, 07:47 PM

Quote:

Originally Posted by Rick Lee

I owe $11,700 on it. Even if I had the cash to pay it off tomorrow, it seems like it would take a good week or so to get the title in hand. I'm talking about BMW Financial Services. They really aren't being as helpful as I'm used to from them. Why can't the buyer and I just go to his bank and do what Roundball's wife did? That seems to be the easiest thing to do. I could probably get a short-term personal loan tomorrow to pay it off. I mean, I have the money but it's not liquid and I don't feel like selling stuff to get it. But then I don't want to pay the car off and then not be able to sell it either. And I haven't gotten a lot of bites on this.

if you have acceptable collateral for your bank to give you another secured loan you should be able to get the car paid off, then list it in a week when you get the title and immediately pay off the new loan when the car sells. if you do this just be sure you get a payment you can afford. While rebuilding my credit i had a secured loan on $500.00 cash. they locked my cash in my savings account. i earned 2% but paid 3% in interest. they also offered me a term of 5 years. the teller looked at me funny when i asked for something more realistic, like a year.

i don't understand why they wouldn't work with you either. perhaps try to call again tomorrow and maybe you will get an different more knowledgeable operator. If you don't get the answer you want out of them ask for a supervisor. sometimes just finding the right person at the call center makes all the difference. good luck, it doesn't sound like fun.