Why won't they just let me pay for my car?
June 7, 2016 9:01 PM   Subscribe

Short version: Bought a car with ex in 2012 with "and" instead of "or" between our names. MISTAKE. Refinanced the car loan with a new lender a little while ago and was told by that lender that all I needed to do now was to record the lien with the Pennsylvania Department of Transportation and I could worry about updating the title later. They even gave me a pre-filled form to record the lien I just needed to sign and turn in. Unfortunately, PennDOT is not having it. What is the best way to proceed? YANML.

I originally had the loan through Toyota Financial and refinanced with USAA. USAA is pretty good about taking care of stuff like this, and when I refinanced through them, it seemed like the hard part was over. Alas, no.

In Pennsylvania, when a lender drops your lien, the vehicle title is sent to the owner, and you have to submit a form to record the lien on the title for your new lender. USAA sent me a pre-filled out form to turn into PennDOT to record the lien. I was told that I would have to fill out different paperwork at a later date if I wanted to get my ex's name off of the title, but that I could go ahead and record the lien in the meantime.

I went to a PennDOT outpost this past weekend to try to record this lien and the person I talked to there COMPLETELY FREAKED OUT.

I was told in no uncertain terms that a) I shouldn't have even been able to refinance my car in the first place, b) they certainly weren't going to record my lien before I dropped the co-owner from the title and c) that I needed to secure power of attorney for the car from my out of state ex before anything else could be done for any part of it. They ALSO said that unless I could prove I paid PA sales tax on the original purchase of the car (meaning: the loan which no longer exists because I have a new one), that I would have to pay that as well if I couldn't find the original paperwork. Do they not have databases for this stuff??

I just want to record my lien! I expected some level of power of attorney nonsensery when it came time to get my ex's name off of the title, but it seems superfluous when all I want to do RIGHT NOW is record the damn lien and worry about getting his name off the title later when the car is paid off. If I was able to refinance the loan without him, surely I should be able to record a lien on that same loan without him?

I apologize if any of this sounds clueless--I've never had to deal with this kind of car loan paperwork before (as evidenced by the fact that I apparently thought an "and" instead of "or" title was a good idea back in 2012).

I'm certainly going to consult USAA about this as well, but mostly, I just want to know--does this sound right? Do I REALLY have to get my ex to agree to power of attorney just to record a lien? Can I not just record the lien now and figure out the title thing later when my credit score is not on the line? Should I try a different PennDOT office? (I tried the AAA PennDOT outpost in Pittsburgh, but maybe a more central PennDOT office would be able to work with me?)

Is there a way I should have handled this differently? I am so perplexed by this entire experience, and I just want to record this stupid lien before the not-registering of this lien starts taking swipes at my credit score. Thanks!
posted by helloimjennsco to Work & Money (4 answers total)

The DMV people may not be completely off the mark here.

Your car's title is basically a legal document that says that it is an asset owned by You and Ex. Putting a lien on an asset "encumbers" it, basically lowering the value. Depending on [factors] it may be [various shades of illegal] to encumber an asset without the consent of all of the owners. It appears that PennDOT has chosen to enforce this rule at the paperwork end (based on the requirement for "the vehicle owner signature" not "a vehicle owner's signature" on what I assume is the appropriate form.)

Basically, look at this from your Ex's point of view. They own half a car. If you refinance, and then don't pay the new loan, the car can be repossessed, and Ex is out the value of that half car.

From USAA's point of view, if between the value left on the car, and your personal creditworthiness, they were comfortable making the loan, then I can see why they agreed to do the refinance without the Ex (especially if in your jurisdiction it's your responsibility to record the lein yourself). If you call them, they might be able to help you figure out the easiest way of getting the paperwork you need, but I'm skeptical that they could help you get around it all together.

So yeah, you should get some paperwork from your Ex. Maybe a power of attorney, maybe a bill of sale giving you his half of the car for $1.

The tax thing seems hinky -- it might have been a red herring just to get you to "shoo" or it might be paperwork that they actually need. The taxes have nothing to do with the "the loan which no longer exists because I have a new one" (besides the fact that you might have paid those taxes with the loan). If your ex has all that paperwork and you have to deal with him anyways, I'd see if you could get it. Otherwise, I'd just see if the next PennDOT person would push you on it.
posted by sparklemotion at 9:33 PM on June 7, 2016 [3 favorites]

So one thing that you really, really need to know here, is that USAA primarily deals with military members and veterans, and they kind of are way more willing to bend the rules on what they insure and how they finance. Someone I know had a car insured with USAA, where the title still had the name of the dead relative that originally gifted it. They gave zero fucks. They don't.

DMVs are where the rubber hits the road. They are not used to stuff like that and will not abide it.
posted by corb at 11:37 PM on June 7, 2016 [2 favorites]

That all makes sense. USAA gave me a pre-filled out lien recording form that has space on it for a co-owner's signature. If I can get him to sign that document and return the original to me, do you think that would be sufficient for lien recording purposes and the title transfer could be figured out later?
posted by helloimjennsco at 5:56 AM on June 8, 2016

I wouldn't worry too much about your credit score. USAA is not going to negatively report you as long as you're paying on this loan, and frankly they did screw up by financing a vehicle without the signatures of both owners on the title. A case could be made for asking them to straighten this out, preferably in a way that gets your ex off the title.

But assuming your ex is reasonably friendly, at least to the extent of not being likely to interfere with your use of the car, the easiest thing is to get him to sign that USAA document. I think that might have the effect of making him a co-signer on the loan, and would definitely keep him on as co-owner of the vehicle.

But I think it would be better to get him off the title. I did a bit of googling on this because I was curious, and I think in DMV speak it's a release of interest or release of liability form, as opposed to a sale. He isn't selling you the car; you're already an owner. He's signing away his interest in it, and if you have that document I think you should be able to secure a title in your name only (well, subject to the USAA lien), which should allow you to get the tag sorted out.

The tax thing is a red herring. I'd push back on that. But the original dealer could probably secure a bill of sale for you if you asked, and I'd want a bill of sale on a vehicle I owned.

Here's what I'd do:

- contact USAA, at the supervisor level if necessary, and communicate to them that you want to take this opportunity to get the ex off the title, since he's not on the lien. Ask them if they've got a release form and/or for help with getting that sorted.

- you may want to try to get DMV on a help line or the like, rather than dealing with it in a line of people trying to buy tags. Never certain the best approach to dealing with a DMV, but if you can get them to tell you exactly what you need over the phone, that should mean that when you come in it's all together.
posted by randomkeystrike at 8:11 AM on June 8, 2016

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