car with bank lien

[PLUM 70]

has any one ever bought a classic car that listed a bank as a lien holder.   Would it stop you from purchasing the car?

[Challenger6pak]

Yes. I have bought a car with a lien on it.  I got with the bank and the owner.  I had paperwork that the bank drew up that was notorized that the car would be free and clear after the lein was paid.  I also had notorized paperwork from the seller that the car would be mine once the lien was paid.  I had the seller go with me when I paid the lien.  Then the seller went with me to the DMV and transfered the title. Everything has to be documented to cover yourself from paying the lein and having the seller change their mind on selling.  They can still change their mind after you pay the lein. You would have to take them to civil court with your paperwork.  Only an idiot would change their mind when you have paperwork, but you never know. The bank or lienholder always has to be satified before you can take title to the car.

[MEK-Dangerfield]

I have NO clue of this kind of situation, but do you at least know why a lien was placed on the car, or more importantly... the size of the lien?


  Mike

[HemiOrange70]

If a car has alean for say 2000. And the asking price is 5000, then pay the owner 3000 and the bank or lein holder 2000. Get all paperwork done before. In other words-you have to make sure the lein holder gets paid or the lein still applies to the car after you buy it. You could pay the owner the 5000 but if he doesn;t pay the lein holder-you are responsible as you are the owner of the car

[Challenger6pak]

Mike, the car I bought was leined for one of the high interest payday loans.  The lein was sold when it was deemed uncollectable.  They figured the car was not worth reposessing over the lein.  They just knew that someday it would sell and when it did they would get paid first.  With the interest added to the loan he got around $200 from me for a $4500.00 car. The payday loan places are more dangerous than a credit card.

[Challenger6pak]

If a car has alean for say 2000. And the asking price is 5000, then pay the owner 3000 and the bank or lein holder 2000. Get all paperwork done before. In other words-you have to make sure the lein holder gets paid or the lein still applies to the car after you buy it. You could pay the owner the 5000 but if he doesn;t pay the lein holder-you are responsible as you are the owner of the car

The leinholder gets paid first.  The title cannot be transfered until the lein is satisfied.

[70_challenger]

I would treat this just as I would if purchasing any used car.  The seller needs to ensure that the lien is removed.  Otherwise, no deal.

Option 1: The seller pays off the loan, and gets the lien removed.  The seller then gets the title re-issued to himself (showing no lien), and hands you the clear title when you buy the car. 

Option 2: You meet with the seller at the lien-holding bank.  You and the seller meet with the loan officer, and you give your check directly to the bank.  The loan officer of the bank then issues the 'release of lien' directly to you, which you can then take with you.

Any other type of arrangement is a show-stopper, and you should not agree to it.  It is the seller's responsibility to provide a clear title with no liens...period.  Anything else involves too much risk of fraud, and too much possiblity of hassle when you get the car titled. 

-Tom