Selling a car, potential buyer wants to make payments. Good or bad idea?

Question

Car has been for sale and sitting for 2 months, it's a nice car in great shape but being sold in a lower income area and hard to find buyers that can come up with the full cash up front. ($4500 or BO)

Someone has offered to make payments of $200wk while I hold the car until it is payed off. It will take approx 5.5 months to pay it off and at that time the title and keys would be turned over.
Does anyone have any good contracts that protect the seller in this situation?
My concerns
-What happens if they stop making payments?
-What happens if a couple months later they change their mind about the car?
-What about the car sitting for 6 months and the potential things that could go wrong with the car while sitting (dead battery, breaks rust up, etc) and would I be held responsible?

Answer 1

Write a contract that covers your concerns.

You agree to sell (him/her) the car "as-is" with no warranty expressed or implied, upon receipt of $4,500, payable on or before (six months from date of agreement).

Buyer agrees the car is in acceptable mechanical and cosmetic condition, and that minor unforeseen changes in either may occur during the six-month period. If an automobile accident or other significant structural damage happens to the vehicle during the six-month period, you agree to refund the earnest money. You agree to run the engine periodically to make sure it turns over and is still in running condition.

In consideration of periodic payments of $200 per week "earnest money", you agree to hold the car until (six months from date of agreement). Those payments will be credited toward the $4,500 due, as long as the full amount is received on or before (six months from date of the agreement). Should the amount not be paid in full no later than (the six month date), the buyer forfeits those payments and you are free to sell the car elsewhere.

I am not a lawyer, this is not legal advice, and I am just some guy. Use this information at your peril, but that's what I'd use. He's free to chicken out prior to full payment, but you get his money (neener neener).

Answer 2

Terrible idea. If the person wrecked it or hurt someone with it, the injured party could sue you for everything you have. If the person cant get a loan from the bank to pay you upfront, it speaks to that person's credit unworthiness, which then speaks to the fact that you will probably get stiffed for payments sometime in the future.

Just because the car is in a low income area doesn't mean it has to be sold in a low income area. There are lots of buyers out there for used cars in good shape. Run an ad in the paper or car sales pamphlets (like Pennysaver, if you have something like that).

As to the battery - just disconnect the battery cables if it is going to sit idle - that will keep it from going dead. And as long as the car was waxed, rust shouldn't be a problem.

Answer 3

I bought a car off a friend and his wife worked for the court system. We drafted a small contract stating the car, terms of the contract, payment amount, what would happen if payment was missed, etc etc. We then signed it, had a witness sign it and had it noterized. Now it is a legal document in any court and the court will uphold that document.

I would put in the contract that if someone else offers to pay cash for the car, you will give back the other money minus a small fee. If they miss a payment, stop paying or choose to bail out, then like a deposit put down...its lost. So even if they pay for 5 months and then want out, too bad, they lost the money.

Having a contract and being stiff like a bank and not friendly like a neighbor will ensure if this person is serious or not. And it covers you legally.

Do not hand over keys nor title till car is paid in full. But if they wish to clean it, wash it, wax it, I would allow that.

Answer 4

Friend,
If you have any other potential options, DO NOT take payments!
Any contract between you and the buyer should go through a lawyer or Notary of Public. If you choose to wait for the money and like you said, WHAT IF SOMETHING HAPPENS? You can be held responsible for any and all damages that may happen.
It is best to get all the money up front. Tell the buyer to go to the bank and take out a personal loan or auto loan. Let the bank deal with the money headaches NOT YOU!

Answer 5

This is a very bad idea. Despite what they say, too many things can happen during this time. If they really want to do this, then they should save the 200 a week until they have 4500 and then buy a car. Don't go for it. They will then give you some song and dance about needing the car before it is payed off, or they will renege during the payment period and want their money back, etc... It just is going to be trouble.

Answer 6

Your concerns are real . I would lower the price a little for cash only . You could also move the auto to another selling area . Such as a friends yard, a gas station , mall , or even curb side . (Preferably a high traffic area) Put a sign in the window with a contact # .. Leave the car for the day .. I have sold a couple autos like this .. At the mall I get there early and park right in front of the food court entrance for the day .. try it you may get Lucky ...

Answer 7

It's been so many years since I bred golden retrievers........over 14-15ish? I'm very much retired and exhausted myself with giving the best I could. I must say that having read all of the answers........I would have taken on any "threat" by "anyone" if it meant protecting my puppies and their mother! Heck, I wouldn't even let a trainer have my Comet when he was in "Show". I was so protective. I took it all on myself with assistance. What I want to say here is that I'm shocked by the way that people act when they go to buy a tender little puppy, and they are just blank and clueless to needs. And Jennifer's post sure got the main vote from me! That little girl was OUT OF CONTROL, and the mother was TEN TIMES WORSE!! For me, I didn't have many issues, though maybe I didn't breed as long as some. The only issue that I ever had was when a couple came after I asked important questions, had them come to the home, had them bring their young daughter, and we sat down so I could "question" them. I asked where they planned to keep their puppy. They said outside 24/7. I immediately said, sorry I won't be selling any of my puppies to you. They asked "why"? I said, "because golden retrievers aren't meant to be outdoors 24/7 alone and without human attention....even in the evening hours!...They are meant to have a lot of human contact and my puppies needed to be indoors at least part of the time and in the evenings overnight, or needed a doggie door to get in and out. That was the only issue I ever had. Most of them were screened by the owner of the father to the puppies either first or after myself. Therefore, there were two of us that any and every future puppy owner had to attend for questions and answers. :oP

Answer 8

Don't do it. Buyers remorse will set in and they will want there money back. Then where will you be? Any thing sitting for that long will be a problem. Seals will dry out and then leak. the brakes will rust onto the rotters/drums etc et. Put it on eBay. Describe it fully and put a reasonable reserve on it and it will go away. Then again put it on craigslist, it's free!

Answer 9

You know where you may be able to find something official and good for this? At Office Depot. They have all kinds of legal forms available for almost any occasion.

Just make up a rule... say something to the effect that:

** If you stop making payments, the first $500.00 will not be refundable. An incentive for them to continue paying.

Answer 10

I just wouldn't go there. There are too many 'ifs' and the last thing you want is to have to cough-up the $ afterwards. (That is if you held onto the cash until all pmts were made...) Still, it sounds like it's too much of a hassle. Unless you're doing someone a favor, I wouldn't touch that idea with a ten foot pole. (Not even someone ELSE'S ten foot pole.)