Buying a used car but owner still owes $ and has No title?

Question

We looked at a used Isuzu Rodeo and would like to purchase it. The seller still owes the bank money and the title will not be sent until it is paid off.

My first question is how does he sell the vehicle if he still owes money on it?

What is the proper way to buy this vehicle?

Answer 1

When you get the check made out to him (wether you do it yourself, or have the bank do it), Have the check made out to BOTH him and yourself.

Yes, go to the bank with him. Also speak to the bank official who will be signing the lean release on the title. BE THERE when he/she signs the release, and have the title then signed by the former owner RIGHT THERE in the bank. Then have it turned over to you before you leave the bank.

You might even discuss with the bank person having the title filled out (transferring ownership to you) before she signs off on the lein. Then as soon as she signs, the car is yours (and acutally, a lein release letter does the same thing)

If the bank is not a local bank, (meaning: you can't walk in the front door and have this taken care of)...then I would suggest not doing business with him, unless you REALLY REALLY trust him. The only way that I would be satisfied to give him a check, and not IMMEDIATLY receive a signed title, is to have a signed purchase agreement that contains AT LEAST the following:

PURCHASE AGREEMENT

1. This agreement will serve as an agreement to purchase a vehicle where an actual State of ________ Title is not currently available.

2. This transaction is made between the seller _______________ (hereafter: seller) and the purchaser _______________(hereafter: purchaser).

3. The vehicle involved in this transaction is a (year), (make), (model), (trim). Its Vehicle Identification # is: _______________________. The purchase also includes the following NON STANDARD, or optional equipment installed after the original manufacture: (list option equipment) (ie: aftermarket radio, special tires, fog lights, etc)

4. The final purchase price for this vehicle is EXACTLY $______________

5. It is understood that the vehicle in question is currently held under lein by ______________________ (hereafter: financial institution), and that a true copy of the vehicles title is held by that financial institution.

6. "Seller" agrees that upon receiving the funds indicated in paragrah 4, that said funds will immediatly be used to release said lein, and transfer ownership of the vehicle to the "purchaser".

7. In the interest of conducting a fair and equal transaction, SELLER agrees to write a personal check to BUYER in the exact amount indicated in paragraph 4. This check will be received by buyer in the same instant that seller receives buyers check to purchase.

8. Seller agrees that a true and properly signed copy of the title, with lein release signature or stamp, will be provided to purchaser within 5 days of transaction. Purchaser will then, at that instant, return sellers "security" check.

9a. If seller fails to provide title within the 5 day time period. Buyer may use this signed and dated PURCHASE AGREEMENT to transfer ownership of the vehicle to PURCHASERS control. Upon succeful transfer of ownership PURCHASER will return SELLERS "security check" and the transaction will be final.

OR

9b. If seller fails to provide title within the 5 day time period. PURCHASER may present for payment the "security check" at SELLERS bank. If the check is returned Non SUFFICIENT FUNDS, PURCHASER will immediatly bring the matter before the SHERRIF of __________ County and seek criminal prosecution.

10. During the length of time the CRIMINAL prosecution is being conducted, PURCHASER will present before the states Department of Motor Vehicles a LEIN on the vehicle indicated in paragraph 3. PURCHASER will release the lein, at which time the SELLER has refunded all the monies owed, court costs, lein recording fee's and attorny's fees (if any)

PURCHASER Signed / Dated

SELLER Signed / Dated
SELLER: By signing this document, you are stating that you do, in fact have legal right and control of the vehicle involved in the transaction, and that as registered owner, you can and do intend to sell the vehicle to the purchaser under the terms stated in paragraph 1 - 10.

Answer 2

He can't legally pass ownership over to you, unless he has the title. The back of the title has a form you fill out when he sells the car to someone else. He would put in your name, how much he sold it to you for, and you'd both sign it. Then you would go to your department of motor vehicles, or whatever, and get the title put in your name. He would also have to fill out a bill of sale, which lays out the details of the sale of the vehicle to you.

Basically, he's not the owner. The bank is the owner until the car is paid off. I wouldn't do business, especially with something of this magnitude, with someone who didn't know what they're doing.

The Rodeo isn't a very good car, either. I would recommend a Toyota 4Runner, or a Nissan Pathfinder.

Answer 3

Who does he owe the money to? and how much, if your 50% payment will cover the debt go down and pay off the debt with him and leave with the title in your hand already signed over to you and cleared of any leins. The minalamalist contract your proposing will not be enforceable in a court of law, unless he has something to sue him for and a location where he won't run away with your money from.

Answer 4

If you are paying cash then you'll have to go to the bank with the owner and purchase it there. If you are financing and using a different lender then your lender will deal with the sellers bank and seller. Don't buy the car straight out from the seller without the title.

Answer 5

I have been in a similar situation, once the owner and I had agreed on a price, we then went to his bank where they gave him a payout figure, I then payed this amount to his bank, and payed the rest to him personally, this removed the bank from the title and I later transferred it into my name.
Do not hand over the full amount to the owner, expecting him to pay it out, if he absconds, the car can be repossessed by the bank.

Answer 6

The absolutely free reverse vin check sites generally provide fake information. To get real information, money will have to be paid. The free searches provide fake information so they can get your email address to send spam.

Stay away from shady reverse vin check sites, most likely you won't get any information after you make the payment. Not to mention you won't get a report and you won't get an answer if you try to call for a refund. Stick with a reputable reverse vin check site like http://www.reversevincheck.net that has been around since 1995.

Answer 7

What the seller should do is use the money that you are paying them for the vehicle to pay off the bank....not sure but i believe you can do some sort of lien on the title..i would contact the bmv for any further information...until that vehicle is paid off through the bank the owner technically CANNOT sell it outright because the bank owns the car until they are all paid

Answer 8

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Answer 9

You or your bank pays the sellers bank the payoff and what ever is left you pay to the seller and the bank sends the title to your bank if you borrow the money. If you do not have to borrow any money for the purchase then you write a check to the bank for the payoff and the remainder to the seller and the seller will receive the title and then give it to you.

Answer 10

the only right way to do this is first off don't give him no money at all until you go to the bank with him,and pay it of,and have a paper drawn up from the bank that shows he did pay it off,then you can give him the remaining balance of what is left from paying it off,and he has to sign the title over to you on the spot,,because the bank has a clear title to it and they can release it to you,,but be care full when it comes to money,,don't give him one dime until he agrees to go with you to the bank ,and do this,,that's the only legal,and smart way to do this,,i been there before,,good luck,i hope this help,s.