What is the best process for buying a car from someone who does not have title (it's leased)?

Question

I am trying to figure out how I go about buying a car from someone who does not have title to the car because it is leased. The lessor believes that the title will be given to them within ten days. What is the best way of finalizing a deal with them? Pay them, trusting that they will send the title? Is there a contract I should have them sign? Anyone know a good resource for figuring this out?

Answer 1

So the car you want to buy is currently being leased from a bank? In order to actually purchase this car, the lease has to be paid in full. Not just the last lease payment, but the residual payment as well. The residual payment is the amount the bank needs to release the title. Here is what you do.

1. Call the bank who holds the lease. Ask the bank what dollar amount is needed to release the title (payoff for the loan).
2. Draw up a bill of sale. You can purchase a legal form at any Office Depot. Complete the form showing you as the purchaser and the current lessor (person who is currently leasing the car from the bank.) as the seller.
3. Agree on a number for a selling price.
4. Once the payoff is given to the bank, the title is sent the the lessor.
5. The lessor has to sign the title over to you.
6. You bring the bill of sale, the title, and the car to the department of motor vehicles, to obtain tags. Here is where you have to pay a sales tax on the selling price or either the actual market value of the vehicle, whichever is greater and depending on the state you live in.
7. Once that is all done, you own the car.

I recommend you only pay a partial payment for the vehicle, until you get the title signed by the lessor. Once the title is signed, you'll pay the rest. Unless you personally know the person you are buying the car from.

Answer 2

Jamie,
First everything that the person your buying it from has to be paid if its a lease it could not only be the buy out but all the miles that have been accumulated on the car/truck/SUV have to be paid for most leases allow 12000miles per year making the person that is leasing the car vulnerable to having to pay owed miles before they will release the title there are allot of paper work problems and such when trying to buy a car that is currently under lease. But if you want to go to your credit union or bank and talk to a financial adviser to get it strait be prepared they are going to ask allot of questions about the lease.
Good luck

Answer 3

I never part with my money until we're at the notary getting the title signed over. Your best course of action is to say 'Call me when you get a clear title and we'll talk then.'

Answer 4

you have to go to the leasing agent otherwise it is an illegal purchase

Answer 5

it they don't have the title then they can't sell the vehicle. you should be talking to the owner.