Buying a vehicle with a lien, is reposession the worst case outcome?
September 20, 2010 7:55 AM Subscribe
What is the worst case outcome for buying a vehicle with a lien still shown on the title.
I am looking for a project for the winter, specifically a motorcycle that needs a little (or a lot) of TLC. I may have found a candidate, it needs work that I am capable of completing and it is very cheap. However, the owner is not sure they can find the paperwork to show that the bike's lien has been paid off, although they assure me that it has, in fact, been paid in full. This sets off all sorts of alarms for me.
Here is the actual question I would like answered. What is the worst case outcome if it turns out that the lien is still in effect? Is it merely repossession of the bike from me, by the lien-holder, or could I be on the hook for more than that? If repossession is the only possibility, this deal may still be worthwhile to me, if I decide the chance the seller is lying to me is small, since the amount of money involved is quite low.
I live in NY state and that is where I will be titling the bike, where the current owner's title is from, and presumable where the lien is from also.
I am looking for a project for the winter, specifically a motorcycle that needs a little (or a lot) of TLC. I may have found a candidate, it needs work that I am capable of completing and it is very cheap. However, the owner is not sure they can find the paperwork to show that the bike's lien has been paid off, although they assure me that it has, in fact, been paid in full. This sets off all sorts of alarms for me.
Here is the actual question I would like answered. What is the worst case outcome if it turns out that the lien is still in effect? Is it merely repossession of the bike from me, by the lien-holder, or could I be on the hook for more than that? If repossession is the only possibility, this deal may still be worthwhile to me, if I decide the chance the seller is lying to me is small, since the amount of money involved is quite low.
I live in NY state and that is where I will be titling the bike, where the current owner's title is from, and presumable where the lien is from also.
what cosmicbandito said. Without the release of lien you're never going to get the title transfered anyways, you might as well take care of that first. I can't imagine why you would want to skip a very simple step and create a lot of headaches for yourself.
posted by HuronBob at 8:56 AM on September 20, 2010
posted by HuronBob at 8:56 AM on September 20, 2010
Response by poster: I guess the step I was overlooking is that the lienholder is listed on the title and I can call them myself. Or does the seller need to do that?
I was getting hung up on him not being able to find the paperwork.
posted by no1hatchling at 8:59 AM on September 20, 2010
I was getting hung up on him not being able to find the paperwork.
posted by no1hatchling at 8:59 AM on September 20, 2010
However, the owner is not sure they can find the paperwork to show that the bike's lien has been paid off, although they assure me that it has, in fact, been paid in full.
In places I've lived (not NY), you simply can't transfer the title without this paperwork (assuming the title still shows a lien). So you can't really sell a vehicle without finding this paperwork or obtaining a copy. I'm not sure exactly what the worst case scenario is legalistically, but it would be something along the lines of you have given the owner a bunch of money and perhaps even taken possession, but they can't transfer the title to you and you can't register the vehicle in your name (since you don't actually own it yet despite transfer of money).
posted by advil at 9:00 AM on September 20, 2010
In places I've lived (not NY), you simply can't transfer the title without this paperwork (assuming the title still shows a lien). So you can't really sell a vehicle without finding this paperwork or obtaining a copy. I'm not sure exactly what the worst case scenario is legalistically, but it would be something along the lines of you have given the owner a bunch of money and perhaps even taken possession, but they can't transfer the title to you and you can't register the vehicle in your name (since you don't actually own it yet despite transfer of money).
posted by advil at 9:00 AM on September 20, 2010
If the bike has been paid off, then there should not be a lien on it.
Earlier this year, I sold my grandpa's car (on his behalf). The car had been paid off. However, my grandpa could not find the title. I live in Illinois and was able to have the Secretary of State issue a new title (costing somewhere around $60).
If I am reading your question correctly, I believe you need the title. Taking posession of the title should show that there is no lien on the car. In most cases, the lender retains the title until the vehicle has been paid off and then gives the title to the owner.
posted by parakeetdog at 1:27 PM on September 20, 2010
Earlier this year, I sold my grandpa's car (on his behalf). The car had been paid off. However, my grandpa could not find the title. I live in Illinois and was able to have the Secretary of State issue a new title (costing somewhere around $60).
If I am reading your question correctly, I believe you need the title. Taking posession of the title should show that there is no lien on the car. In most cases, the lender retains the title until the vehicle has been paid off and then gives the title to the owner.
posted by parakeetdog at 1:27 PM on September 20, 2010
I bought a car recently that I stupidly didn't notice still had a lien listed on the title. When I was at the DMV to register it and the guy at the counter said there was still a lien, I nearly fell over. His next statement was that since the car was more than 10 years old, it was fine and he could just ignore it. It took another half hour for my blood pressure to drop again. So, if this is >10 year bike, I would try calling the DMV to see what the deal is with older titles and liens. Maybe it won't be a big deal.
posted by sulaine at 2:02 PM on September 20, 2010
posted by sulaine at 2:02 PM on September 20, 2010
If there is still an active lien on the bike you won't be able to do anything about it without help from the previous owner. The previous owner will either need to get the paperwork, or he'll have to give you a bunch of personal information, and probably still have to take a confirmation call from the lien holder, and sign some papers for you.
My current car had a lien on it, and the PO lost the paper saying it had been paid off. I took the title to the DMV, they told me the bank that held the lien, I had to give the bank the PO's address and some other personal stuff, they sent me a form for the PO to sign, I sent it back to the bank, they signed and notarized it, sent it back, and I took that back to DMV.
If I didn't have AAA and access to their DMV services I would have bailed. It was a hassle.
posted by gally99 at 7:28 AM on September 21, 2010
My current car had a lien on it, and the PO lost the paper saying it had been paid off. I took the title to the DMV, they told me the bank that held the lien, I had to give the bank the PO's address and some other personal stuff, they sent me a form for the PO to sign, I sent it back to the bank, they signed and notarized it, sent it back, and I took that back to DMV.
If I didn't have AAA and access to their DMV services I would have bailed. It was a hassle.
posted by gally99 at 7:28 AM on September 21, 2010
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posted by cosmicbandito at 8:07 AM on September 20, 2010