Is it practical for my out-of-state parents to sell my car for me?

August 27, 2018 5:36 PM

I live in New York City and am preparing to sell my car. What's the feasibility of having my parents in Minnesota help me sell it there instead? This would really beat the hassle of dealing with prospective buyers in NYC while I'm busy with work and the car is parked in random places on the street getting grimy every day. My parents are happy to help and have plenty of free time to entertain offers. And research indicates I could potentially get a higher price in Minneapolis compared to NYC. Questions follow:

1. I’m planning to visit my parents soon anyway, so I could just drive the car to Minnesota instead of flying. But if the car doesn't sell during my visit (~10 days), would it even be possible to complete a sale if I leave the car with them?

2. If the car doesn’t sell while I'm there, what’s the possibility of signing documents electronically or pre-signing documents before I leave?

3. Would it be ok to do this without first registering the car in Minnesota? There’s a 60 day grace period before out-of-state vehicles need to be registered there. Would the insurance need to be changed to MN right away, or could that wait too?

4. I bought the car from a dealer in Florida a couple years ago while living there. The lienholder (Honda Financial) has the title and I’m still making payments. When I registered the car in New York after moving here, the title should have been transferred to NY, right? But the lienholder told me it’s still a Florida title. I checked the Florida DMV website and the title is still listed there. It’s not listed on the NY DMV site. Is this something I need to fix before making any sale?

5. Anything else I should be considering or other paperwork I should get prepared well ahead of time?

posted by theory to Work & Money (7 answers total)

Just sell the car to them for $1-100 when you visit. This is asking a bit of a favor from them but no more than any other method imo, ymmv.
Makes a lot of your numbered points turn into ‘not applicable’, so win-win in my view.
posted by SaltySalticid at 6:25 PM on August 27, 2018

You will have to clear the lien before selling the car. If you have the cash, pay off the loan and get a clear NY title. Then sell it to your parents for a nominal amount. In NY you can sell a car to an immediate family member without incurring sales tax - Minnesota may have the same loophole. Once your parents have a clear MN title they can sell the car and send you the money less their commission :).

Or you could avoid all that and sell to a dealer in NYC who would do all the paperwork for a hefty discount off the car's value.
posted by leaper at 6:52 PM on August 27, 2018 [1 favorite]

When I registered the car in New York after moving here, the title should have been transferred to NY, right?

This depends on the state and I don't know what the answer is for NY. (I believe it's a question of whether the state you move to insists you title the car there.)

If you can't afford to pay off the loan, I think the only practical option is to sell to a dealer in NY (or Minnesota, but why bother), who I believe will handle paying off the loan with a portion of the purchase price and juggling titles.

If you can pay off the loan, you'll want to find out whether the title is held electronically, in which case you can talk to Florida about removing the lien and getting a copy of the title, or on paper, in which case the bank will mail it to you (which will take longer than they say it will, in all probability) along with a letter saying the loan has been paid and you can get a title without a lien in (I think) the state of your choosing.

(Disclaimer: this whole post is based on experience selling two cars in Texas--one with a Texas title and lien and one with a clear Illinois title. The latter car started life in Florida--Illinois insists you get an Illinois title, Texas does not. I found the Texas DMV (who are not the driver's license people) exceptionally helpful in figuring the process out. Unfortunately, ymmv significantly, as I think the title people in NY and MN are the driver's license people. That said, I've been a driver's license edge case in MN and they were helpful on the phone.)
posted by hoyland at 3:36 AM on August 28, 2018

One thing to be aware of is that it currently takes about 3 months to receive a car title in Minnesota. So if you tried the "sell to parents, then have them sell it" method your parents would be stuck waiting quite a while before they had the new title in hand & could sell it to someone else.
posted by belladonna at 6:35 AM on August 28, 2018

But if the car doesn't sell during my visit (~10 days), would it even be possible to complete a sale if I leave the car with them?

One way to accomplish this would be to give your parent(s) Limited Power of Attorney, which would give them the legal authority to sell the car on our behalf. I can't speak to the practicalities, or if buyers would be put off by this, but it's legally possible.
posted by yuwtze at 7:21 AM on August 28, 2018

Best answer: We've bought (and sold) a lot of used cars private party. I'll speak to you from the buyer's point of view. There is no way I would buy a car when you do not have the title in hand. I'm not going to pay you so that you can take my money and pay off the lien and then mail me the title once the lienholder gets around to clearing the lien and sending you the title a few months from now. That's not happening. That's a nightmare scenario for the buyer, even if you as the seller are on the up-and-up. If the lienholder doesn't do their part, I have to chase you and there is zero incentive for you to chase them once you've got the money. That's not even taking into account whether or not the buyer would then be able to register the vehicle in their name immediately, or whether they would end up with a car they can't drive until the lienholder gets their end settled. So the first thing you need to do is get the title in your name.

I am also not buying a car that the seller does not hold title to. If it's your parents, your uncle, your best friend, I don't care, if the person selling the car to me does not hold title it's a legal nightmare for me if it goes wrong. I am not trying to set myself up to get pulled over for driving a stolen car. Your sale may be on the up-and-up but I don't know that if the paperwork isn't in order. So the second thing you need to do is either transfer title to your parents' name, or do the POA thing mentioned above.

At this point it becomes a time vs money issue. How much more could you really get in MN vs NY? Do the math and see if it really comes out in your favor. You might be better off to just unload it with a dealer. They give you a price and settle your lien and title issues for you, you walk away with the remainder in cash.

Or you could sell the car to your parents, settle the lien between yourselves, and have the lienholder send the title to them, and then your parents could sell it. They might be looking at an undriveable car sitting in their driveway for a few months though.
posted by vignettist at 11:54 AM on August 28, 2018 [3 favorites]

I bought a car when I lived in one state, the car was in another, and the owner was in a third. I asked about it here and got some help that might apply to you, too
posted by daisyace at 3:22 PM on August 29, 2018