Why is this sale hitting a snag?
March 12, 2007 3:41 PM Subscribe
I would like to buy a car, in a private party sale, from a person who has a loan on the car. State of Pennsylvania. How does one facilitate getting the title? Or is it even needed?
Here is the situation. I have an acquaintance, not a full-fledged friend, who has a 2003 Lincoln Navigator (32000 miles) which he owes $12000 on through a personal loan with his bank, headquartered out of town (but in PA).
For his own personal financial reasons he would like to sell me this vehicle for $12000.
I would like to buy it. I have cash in hand to pay for it.
He is in PA, the car is titled in PA.
I am in PA. I recently sold a car in PA (3 weeks ago) and still have my PA tag from that car. I carry insurance on another car presently, and can provide all insurance obligations.
So he has the car and loan. I have the money to purchase the car with which he can then pay off the loan. Bank has the title and holds the lien. He is not that good of an acquaintance that I will hand him the money with out getting the car immediately.
We were going to do this on this past Saturday. We are both members of AAA and went to them to facilitate the sale. The AAA rep (who really had trouble grasping the situation) told us that he has to pay off the loan first, then have the title sent to him, and only then can we arrange the sale.
We both thought that made no sense.
Today we called his bank and told them the situation and they said that we didn't need the title in hand, just a "bill of sale" to take to the notary/tag place, but offered no further details. Every relative and friend I've talked to today echoed that sentiment and exact words "bill of sale" as well as the no further details part.
My father remembers doing this 15 years ago, but not the procedure.
People buy and sell cars all the time that have liens /loans on them. Obviously, he is selling it because he cant pay it off.
What do we have to do and/or bring to a different tag place to facilitate this sale? Remember, Pennsylvania.
Thanks in advance!
Here is the situation. I have an acquaintance, not a full-fledged friend, who has a 2003 Lincoln Navigator (32000 miles) which he owes $12000 on through a personal loan with his bank, headquartered out of town (but in PA).
For his own personal financial reasons he would like to sell me this vehicle for $12000.
I would like to buy it. I have cash in hand to pay for it.
He is in PA, the car is titled in PA.
I am in PA. I recently sold a car in PA (3 weeks ago) and still have my PA tag from that car. I carry insurance on another car presently, and can provide all insurance obligations.
So he has the car and loan. I have the money to purchase the car with which he can then pay off the loan. Bank has the title and holds the lien. He is not that good of an acquaintance that I will hand him the money with out getting the car immediately.
We were going to do this on this past Saturday. We are both members of AAA and went to them to facilitate the sale. The AAA rep (who really had trouble grasping the situation) told us that he has to pay off the loan first, then have the title sent to him, and only then can we arrange the sale.
We both thought that made no sense.
Today we called his bank and told them the situation and they said that we didn't need the title in hand, just a "bill of sale" to take to the notary/tag place, but offered no further details. Every relative and friend I've talked to today echoed that sentiment and exact words "bill of sale" as well as the no further details part.
My father remembers doing this 15 years ago, but not the procedure.
People buy and sell cars all the time that have liens /loans on them. Obviously, he is selling it because he cant pay it off.
What do we have to do and/or bring to a different tag place to facilitate this sale? Remember, Pennsylvania.
Thanks in advance!
Response by poster: Thank you, jerseygirl. I am not ungrateful for your help. However, I may have been unclear. I already did know what "bill of sale" meant. Your link points to general definitions of terms applicable nationwide and specific to e-loan. I am in need of specific procedures/forms or advice on what to request at a Pennsylvania tag shop to facilitate a Pennsylvania sale of this nature. But I do appreciate your pointing me to that resource.
posted by sandra_s at 4:51 PM on March 12, 2007
posted by sandra_s at 4:51 PM on March 12, 2007
Perhaps one of the publications here would help. Maybe call the PA DOT and find out exactly - or press the bank that hold the loan for more information. I can't imagine that they would just want someone to sign over their loan collateral without being involved in some way.
posted by marylynn at 5:15 PM on March 12, 2007
posted by marylynn at 5:15 PM on March 12, 2007
Ohh. Sorry for my confusion, I thought you didn't know how to do this transaction at all. I guess I have something in common with the AAA rep! I think I might be missing a regional difference (I'm in Boston), but for my own education, what exactly is a tag shop? the Registry of Motor Vehicles? Getting the car inspected?
So... you basically want to buy the car right now, take possession of the car right now, register/insure it and then receive the title? If that's the case, what everyone was telling you in regards to the Bill of Sale is correct. You can insure and register a vehicle with the Bill of Sale. You will have to transfer the title when he receives it (there's a place to do so on the back of the auto title). Call the PA DMV and ask how to go about doing the registration - what you need to bring, etc to register the vehicle and how you go about transferring titles in PA. They might not tell you, but when you go to register the car, you're going to get hit with sales tax on the transaction, on top of registry fees. Ask about it, so you can be prepared. You can also speak to your insurance company to cover your bases as far as making sure you have everything you need to obtain/transfer insurance. As far as the actual Bill of Sale, a PA notary should be able to help you with that and legitimize the entire transaction. I'd actually strongly recommend the notary, where this seller isn't a close acquaintance.
Hope this helps more than my other vague link!
posted by jerseygirl at 5:36 PM on March 12, 2007
So... you basically want to buy the car right now, take possession of the car right now, register/insure it and then receive the title? If that's the case, what everyone was telling you in regards to the Bill of Sale is correct. You can insure and register a vehicle with the Bill of Sale. You will have to transfer the title when he receives it (there's a place to do so on the back of the auto title). Call the PA DMV and ask how to go about doing the registration - what you need to bring, etc to register the vehicle and how you go about transferring titles in PA. They might not tell you, but when you go to register the car, you're going to get hit with sales tax on the transaction, on top of registry fees. Ask about it, so you can be prepared. You can also speak to your insurance company to cover your bases as far as making sure you have everything you need to obtain/transfer insurance. As far as the actual Bill of Sale, a PA notary should be able to help you with that and legitimize the entire transaction. I'd actually strongly recommend the notary, where this seller isn't a close acquaintance.
Hope this helps more than my other vague link!
posted by jerseygirl at 5:36 PM on March 12, 2007
Response by poster: :-) Thanks, jerseygirl. FY (and everyone's) I : a tag shop in pa is a private business that has an in-house notary that has special equipment and agreements with the state to handle vehicle registrations (including the collection of sales tax) and title transfers (and sometimes other state business). They charge a fee, but guarantee the timely and complete (sometimes instantaneous) filing of state forms.
posted by sandra_s at 6:20 PM on March 12, 2007
posted by sandra_s at 6:20 PM on March 12, 2007
If you give this person 12k, how do you know he will pay off the car? The bank maintains the lien, he takes the money, the bank takes the car from you, no matter who holds the title....
posted by HuronBob at 6:36 PM on March 12, 2007
posted by HuronBob at 6:36 PM on March 12, 2007
Right, you need to go to the bank that owns the lien with him and pay it right there. This is a much more complicated transaction than buying a car with a clear title and a bit dangerous because the person you're buying from doesn't own the car yet. The bank does. They usually have a procedure for this, just don't give the guy the $$ directly or you may be screwed.
posted by IronLizard at 6:43 PM on March 12, 2007
posted by IronLizard at 6:43 PM on March 12, 2007
Err, the bank usually has a procedure for exactly this situation, if I didn't make that clear. While you're there you can also make use of their notary public.
posted by IronLizard at 6:45 PM on March 12, 2007
posted by IronLizard at 6:45 PM on March 12, 2007
Write an agreement with your acquaintance spelling out what the 12k is for and what he is to do with it. Have it notarized. I do wonder why he would let a car like that go for 12k when Kelly Blue Book shows it worth nearly twice that. I hope your acquaintance can prove to you that he owns the car. Did the bank confirm the amount due, etc?
posted by JayRwv at 6:55 PM on March 12, 2007
posted by JayRwv at 6:55 PM on March 12, 2007
your department of motor vehicles should be able to give you the proper procedure. they've been good resources for me in both massachusetts and tennessee, so i imagine you'll be able to find someone who can help you. i thnk it's probably easier for them to hold your hand on the front end than waste resources cleaning up a botched sale. get everything in writing.
talk to the bank that owns the loan as well. other people have done this, so they should know what to do.
i imagine this will boil down to you drawing up a bill of sale, notarized, between you and the seller, and then taking it to the bank to get the title.
the car talk forum at cars.com (http://www.cartalk.com/menus/email.html) is probably also a really good place to ask for advice.
posted by thinkingwoman at 8:23 PM on March 12, 2007
talk to the bank that owns the loan as well. other people have done this, so they should know what to do.
i imagine this will boil down to you drawing up a bill of sale, notarized, between you and the seller, and then taking it to the bank to get the title.
the car talk forum at cars.com (http://www.cartalk.com/menus/email.html) is probably also a really good place to ask for advice.
posted by thinkingwoman at 8:23 PM on March 12, 2007
If following the letter of the law is important to you, disregard this suggestion. But I have both bought a car from a seller who had a loan on it, and have sold a car I had a loan on. Here's how I dealt with the lag time for title release.
In most states, a title is necessary to register (and get plates for) a car.
In the case of buying the car, I used an old license plate from a different car and kept a bill of sale with me. I had printed said bill of sale off the internet, and had the seller sign it. We did not go about any official notarization process. I did insure the car - your insurance company will insure any car you can give them a VIN for, whether you own it or not. For instance, if you borrow a friend's car for a month, you can insure that, too.
Anyway, the title came about 3 weeks later, I went to the DMV and took care of everything and got plates.
Yes, if I had been pulled over in the interim, I would have been in some trouble, but I took the chance figuring I could probably explain my way out of any serious fines.
The car was owned by a co-worker, so I wasn't much worried about whether or not he'd take care of the loan.
About 3 years ago, I also sold a Subaru on which I still owed a few grand. I advertised it in the paper, explained the situation to every potential buyer who looked at it, and when someone did eventually buy it, I told him he could just keep my plates on it until the title showed up. I cancelled my insurance on the subaru, and he added it to his.
Again, was this totally on the up-and-up? No. He or I could have gotten ourselves or each other in big trouble if we wanted to. Calculated risk, I guess.
When people were looking at that car, many of them indicated they had been involved in similar transactions before. It also appeared that gray areas between ownership were common and expected and dealt with pretty much this same way. Skip the old hens at AAA!
One thing I have done differently since then is financed subsequent cars through local banks, which makes getting titles easier should we decide to sell before they're paid off.
Of course, committing crimes, driving drunk or otherwise calling attention to oneself when driving a car in legal limbo would probably aggravate any potential risk.
posted by M.C. Lo-Carb! at 9:11 PM on March 12, 2007
In most states, a title is necessary to register (and get plates for) a car.
In the case of buying the car, I used an old license plate from a different car and kept a bill of sale with me. I had printed said bill of sale off the internet, and had the seller sign it. We did not go about any official notarization process. I did insure the car - your insurance company will insure any car you can give them a VIN for, whether you own it or not. For instance, if you borrow a friend's car for a month, you can insure that, too.
Anyway, the title came about 3 weeks later, I went to the DMV and took care of everything and got plates.
Yes, if I had been pulled over in the interim, I would have been in some trouble, but I took the chance figuring I could probably explain my way out of any serious fines.
The car was owned by a co-worker, so I wasn't much worried about whether or not he'd take care of the loan.
About 3 years ago, I also sold a Subaru on which I still owed a few grand. I advertised it in the paper, explained the situation to every potential buyer who looked at it, and when someone did eventually buy it, I told him he could just keep my plates on it until the title showed up. I cancelled my insurance on the subaru, and he added it to his.
Again, was this totally on the up-and-up? No. He or I could have gotten ourselves or each other in big trouble if we wanted to. Calculated risk, I guess.
When people were looking at that car, many of them indicated they had been involved in similar transactions before. It also appeared that gray areas between ownership were common and expected and dealt with pretty much this same way. Skip the old hens at AAA!
One thing I have done differently since then is financed subsequent cars through local banks, which makes getting titles easier should we decide to sell before they're paid off.
Of course, committing crimes, driving drunk or otherwise calling attention to oneself when driving a car in legal limbo would probably aggravate any potential risk.
posted by M.C. Lo-Carb! at 9:11 PM on March 12, 2007
I purchased my last car exactly the way you're describing sandra_s, and here's how I did it.
I went to my bank and had them draw up a bill of sale that included the specifics that I would immediately take control of the vehicle, and that the seller had x amount of days to turn over a clear title. I had the bill of sale notarized and then had the bank wire the money to the sellers account.
I took the bill of sale and vehicle to the tax collecters office,paid the sales tax, registered the vehicle and was issued a temporary tag. Remember that x from earlier? It should be less than the expiaration period of the temp tag.
I called my insurance company and informed them of a new vehicle purchase and arranged a date for inspection. If you have any insurance right now you should have a grace period for new vehicle purchases where your best coverage is extended to that vehicle (it should be around 30 days, check you policy).
When the seller provided me the title, I went back to the tax collecters and got a permanent plate.
posted by nulledge at 4:38 AM on March 13, 2007
I went to my bank and had them draw up a bill of sale that included the specifics that I would immediately take control of the vehicle, and that the seller had x amount of days to turn over a clear title. I had the bill of sale notarized and then had the bank wire the money to the sellers account.
I took the bill of sale and vehicle to the tax collecters office,paid the sales tax, registered the vehicle and was issued a temporary tag. Remember that x from earlier? It should be less than the expiaration period of the temp tag.
I called my insurance company and informed them of a new vehicle purchase and arranged a date for inspection. If you have any insurance right now you should have a grace period for new vehicle purchases where your best coverage is extended to that vehicle (it should be around 30 days, check you policy).
When the seller provided me the title, I went back to the tax collecters and got a permanent plate.
posted by nulledge at 4:38 AM on March 13, 2007
Response by poster: Follow up.
I called PENNDOT (Pennsylvania Department of Transportation) this morning. What they told me, i can not believe. They told me that I must travel to the seller's bank where the title is located (279miles, Scranton to Pittsburgh) and while there, pay the loan off at the bank directly, then have them sign over the title to me and have it notarized by the bank's notary. This can only be done in person, and at the bank. I then have to get the buyer to join me at the Tag shop to finalize the sale.
This is stupid, and I believe the rep was wrong. THE TITLE IS IN THE NAME OF THE SELLER, NOT THE BANK. They cant sign off on a title they are not listed on. I tried to tell the PENNDOT rep that, but she said, "That's the way it is".
I then called the local PENNDOT DMV and was told the ONLY way someone can sell a car with a loan on it is to trade it in on another car at a dealer (for substantially less than you could sell it for). I cant believe this either.
Note to PA residents: If you can not afford your new car, you're screwed! The state of PA has set it up that you can not get rid of it unless you take on more debt in the form of a newer car.
posted by sandra_s at 6:45 AM on March 13, 2007
I called PENNDOT (Pennsylvania Department of Transportation) this morning. What they told me, i can not believe. They told me that I must travel to the seller's bank where the title is located (279miles, Scranton to Pittsburgh) and while there, pay the loan off at the bank directly, then have them sign over the title to me and have it notarized by the bank's notary. This can only be done in person, and at the bank. I then have to get the buyer to join me at the Tag shop to finalize the sale.
This is stupid, and I believe the rep was wrong. THE TITLE IS IN THE NAME OF THE SELLER, NOT THE BANK. They cant sign off on a title they are not listed on. I tried to tell the PENNDOT rep that, but she said, "That's the way it is".
I then called the local PENNDOT DMV and was told the ONLY way someone can sell a car with a loan on it is to trade it in on another car at a dealer (for substantially less than you could sell it for). I cant believe this either.
Note to PA residents: If you can not afford your new car, you're screwed! The state of PA has set it up that you can not get rid of it unless you take on more debt in the form of a newer car.
posted by sandra_s at 6:45 AM on March 13, 2007
Generally, titles are in the name of the car's owner. If the car has a bank lien on it, then the title should list the bank and (possibly) the human too.
posted by nita at 7:37 AM on March 13, 2007
posted by nita at 7:37 AM on March 13, 2007
Why do you think part one is stupid? You want to do a title transfer. In order to do that you need to have your hot little hands on the existing title and you are 100% wrong - the bank's name IS on the title. The car is not titled TO the bank, however they hold an interest in the title.
I suspect you have never seen an auto title in person, else this would be perfectly obvious to you - there are on most titles room to have four or five (!) persons of interest listed.
The bank is on the title because they own an interest in it and legally the car cannot be sold unless they are satisfied as well, no different than if you were trying to buy a house that was owned by two people - you can't get just one person's signoff. Yes, it's more inconvenient but that's the price you pay when you don't just pay cash for a vehicle.
The people you need to be dealing with - or, more accurately, the people your acquaintance needs to be dealing with - is his bank, who do this a hundred times a day and have some procedure to handle it. I assume that he himself is not 300 miles away and has some local branch. They'll either send the title there so he can pay them for it in the branch - and they likely have a notary and the forms needed and will assist in this - or will offer up some other mechanism to help.
posted by phearlez at 7:52 AM on March 13, 2007
I suspect you have never seen an auto title in person, else this would be perfectly obvious to you - there are on most titles room to have four or five (!) persons of interest listed.
The bank is on the title because they own an interest in it and legally the car cannot be sold unless they are satisfied as well, no different than if you were trying to buy a house that was owned by two people - you can't get just one person's signoff. Yes, it's more inconvenient but that's the price you pay when you don't just pay cash for a vehicle.
The people you need to be dealing with - or, more accurately, the people your acquaintance needs to be dealing with - is his bank, who do this a hundred times a day and have some procedure to handle it. I assume that he himself is not 300 miles away and has some local branch. They'll either send the title there so he can pay them for it in the branch - and they likely have a notary and the forms needed and will assist in this - or will offer up some other mechanism to help.
posted by phearlez at 7:52 AM on March 13, 2007
Response by poster: Dearest phearlez.
Before you assume anything about me ("I suspect you have never seen an auto title in person, else this would be perfectly obvious to you"), I have 2 titles in my hand right now for the 2 vehicles I currently own. I have no liens on them. In PENNSYLVANIA (not Virginia, where you are), the state sends you a NEWLY GENERATED TITLE each time the title is transferred. In most cases, PA titles do not list previous owners/title holders on them.
Also, my question states that I sold a car 3 weeks ago.
I KNOW WHAT A TITLE LOOKS LIKE.
If you read the original question fully you will see that his bank said that they would be more than happy to let us use use a "bill of sale", which they say they do all the time.
And yes, one branch, 279 miles away. It is a small, local bank. The seller has moved, from there to here, since taking the loan.
Thank you for your attempt at answering this question with politeness and clarity. Wow.
posted by sandra_s at 8:12 AM on March 13, 2007
Before you assume anything about me ("I suspect you have never seen an auto title in person, else this would be perfectly obvious to you"), I have 2 titles in my hand right now for the 2 vehicles I currently own. I have no liens on them. In PENNSYLVANIA (not Virginia, where you are), the state sends you a NEWLY GENERATED TITLE each time the title is transferred. In most cases, PA titles do not list previous owners/title holders on them.
Also, my question states that I sold a car 3 weeks ago.
I KNOW WHAT A TITLE LOOKS LIKE.
If you read the original question fully you will see that his bank said that they would be more than happy to let us use use a "bill of sale", which they say they do all the time.
And yes, one branch, 279 miles away. It is a small, local bank. The seller has moved, from there to here, since taking the loan.
Thank you for your attempt at answering this question with politeness and clarity. Wow.
posted by sandra_s at 8:12 AM on March 13, 2007
Sandra_s, your hostility and ingratitude for people who are trying to help you is really out of place here at AskMe. I'm beginning to suspect that you're one of those people who is thinking about your $5 signup entitlements while you're typing.
That said, here is your correct advice. Go to Pittsburgh from Scranton with your seller, pay off the loan, and get the bank to clear the title so it can be signed over to you.
And the next time you ask a question here, start and finish by being respectful and polite.
posted by ikkyu2 at 9:44 AM on March 13, 2007
That said, here is your correct advice. Go to Pittsburgh from Scranton with your seller, pay off the loan, and get the bank to clear the title so it can be signed over to you.
And the next time you ask a question here, start and finish by being respectful and polite.
posted by ikkyu2 at 9:44 AM on March 13, 2007
Sandra: Note to PA residents: If you can not afford your new car, you're screwed! The state of PA has set it up that you can not get rid of it unless you take on more debt in the form of a newer car.
You can trade a more expensive car for a less expensive car. If you can't afford a new car, you shouldn't buy it. Personal responsibility, etc.
posted by jeffamaphone at 10:18 AM on March 13, 2007
You can trade a more expensive car for a less expensive car. If you can't afford a new car, you shouldn't buy it. Personal responsibility, etc.
posted by jeffamaphone at 10:18 AM on March 13, 2007
Response by poster: I absolutely agree, jeffamaphone. That is why in my case, I pay cash for the vehicles I buy. I believe this person lost their job, so there is a mitigating factor for them. But ultimately you are correct, personal responsibility should be #1
posted by sandra_s at 11:57 AM on March 13, 2007
posted by sandra_s at 11:57 AM on March 13, 2007
Dearest Sandra,
If you continue on your path of getting angry with everyone who attempts to assist you but fails to give you the answer you want (rather than ones that reflect reality) I suspect you are in for a long and unpleasant journey. I'm sorry you took my offhand comment as some kind of insult, it certainly wasn't meant that way.
Your problem here seems to be largely revolving around the way you want to do things vs what all your possible choices are according to the people who are the gatekeepers on your progress. You want to use a title agency, which your message implies is a way to get this done expediently but is not a requirement. That's a system that matches the way they used to do things when I was a Florida resident. I concede I am not a Pennsylvania resident, no matter how much your delightful manner makes me wish I could reside in your fair state, but the PA info indicates they'll happily mail you the new title.
Given that, I suspect that the lien holding bank will happily take the check and provide you a bill of sale and send the documentation on to the state for processing.
Perhaps I should have been clearer in my statement that the person you are buying this car from should contact his bank for more guidance. As implausible as it may seem that they might not want to have extended dialog with you, HE is their customer and more likely to get some hand-holding from them regarding options in how to proceed.
I suggest that since you're so focused on using an expediter for this process you could, I dunno, consult one of THEM for more information.
posted by phearlez at 12:27 PM on March 13, 2007
If you continue on your path of getting angry with everyone who attempts to assist you but fails to give you the answer you want (rather than ones that reflect reality) I suspect you are in for a long and unpleasant journey. I'm sorry you took my offhand comment as some kind of insult, it certainly wasn't meant that way.
Your problem here seems to be largely revolving around the way you want to do things vs what all your possible choices are according to the people who are the gatekeepers on your progress. You want to use a title agency, which your message implies is a way to get this done expediently but is not a requirement. That's a system that matches the way they used to do things when I was a Florida resident. I concede I am not a Pennsylvania resident, no matter how much your delightful manner makes me wish I could reside in your fair state, but the PA info indicates they'll happily mail you the new title.
Given that, I suspect that the lien holding bank will happily take the check and provide you a bill of sale and send the documentation on to the state for processing.
Perhaps I should have been clearer in my statement that the person you are buying this car from should contact his bank for more guidance. As implausible as it may seem that they might not want to have extended dialog with you, HE is their customer and more likely to get some hand-holding from them regarding options in how to proceed.
I suggest that since you're so focused on using an expediter for this process you could, I dunno, consult one of THEM for more information.
posted by phearlez at 12:27 PM on March 13, 2007
This thread is closed to new comments.
posted by jerseygirl at 3:58 PM on March 12, 2007