Liens and Car Trades

[Weapon_R]

Here's the scenario.

I am going to trade my car for someone elses. Their car is noticably more expensive than mine (worth ~$18000). They owe about $12,000 on it still.

I am willing to pay approximately 6-7k on top of my car, but there will still be a considerable amount owed to the bank. The guy does not have the remainder, but is making payments on the loan monthly.

Is there any way this trade can be done without having me stuck with the lien on the car I trade for?

[-APEX-]

what kind of car cause i think i got someone in mind who wont mind finishing off the payments

[rice_eater]

i wouldn't do it man. make him change the lien for something else like his house or your car once you do the trade. If i were that guy and i didn't know you i'd be very tempted to piss that money away rather than pay it to the bank!

[lint]

Originally posted by rice_eater
i wouldn't do it man. make him change the lien for something else like his house or your car once you do the trade. If i were that guy and i didn't know you i'd be very tempted to piss that money away rather than pay it to the bank!

Ummm, normally when a bank lends you money to buy a car, they put a lien on the car. The bank would hold a lien on the sellers car until the loan is paid in full. Once he's traded the car and the bank is paid, there is no lien to transfer. If Weapon-R takes out a car loan, his ank will put a lien on the car.

[Weapon_R]

I don't need a car loan, he is the one who has the car loan. He won't be able to pay it with the difference i'm giving him, but I need to know if there is a way to keep the lien his responsibility while transfering ownership of his car - there's gotta be a way to do this.

[max_boost]

Unless he gets another loan temporarily, I don't know how you would pull this off. Perhaps go down to the bank and talk to the financial adviser.

[rc2002]

He can talk to his bank (where he got the loan) and simply have them transfer the lien from his car to your car. That way when you get his car, it will be lien free.

His bank will provide the paperwork, and all you need to give is your VIN and vehicle registration to prove to his bank that your car actually exists. Then you both sign the agreement that says that the lien will be transferred to your car, after you make the trade.

[Weapon_R]

Originally posted by richardchan2002
He can talk to his bank (where he got the loan) and simply have them transfer the lien from his car to your car. That way when you get his car, it will be lien free.

His bank will provide the paperwork, and all you need to give is your VIN and vehicle registration to prove to his bank that your car actually exists. Then you both sign the agreement that says that the lien will be transferred to your car, after you make the trade.

Thanks a lot, thats exactly what I needed to know.

Now he would have to put that 7k I give him towards the lien right, since if he owed 12,000 the bank wouldn't exactly transfer the lien to my car since it's not worth that much right?

[rc2002]

He would most likely have to put at least part of that 7k towards the lien. The bank has the final say though so the best thing to do is to go with him to his bank and clear up all of your questions.

[MerfBall]

Originally posted by Weapon_R


Thanks a lot, thats exactly what I needed to know.

Now he would have to put that 7k I give him towards the lien right, since if he owed 12,000 the bank wouldn't exactly transfer the lien to my car since it's not worth that much right?

The best thing to do is to have a certified cheque made out jointly to the person and the lienholder (the bank) this makes sure that he puts the money towards the payment. And if in doubt at all talk to the bank, they know best how to handle these things.

The transfer of lien sounds ok, but the bank may turn it down if the value of your car is less than the lien that will be put on it.

Also, on the bill of sale make sure to put a condition on there that the car is free of all liens, this isn't a sure thing but will provide you with some protection. Bill of Sale Page 1 (http://www.plates.net/Forms/BILLSALE.pdf) and Bill of Sale Page 2 (http://www.plates.net/Forms/BILLSAL2.pdf)