Pay out the car or not?

[Pahnda]

So here is my situation:

I bought an '09 A4 last year knowing I would be leaving the country (or at least province) in either 2 or 3 years from then. I have decided to leave Spring of next year.

Now, I love the car and everything but I really don't want to be in the situation of having to sell, at the last moment, a car that I'm assuming will take months to sell due to the fact that it's still a considerable sum of money at current market value. So I've come to the conclusion I should take advantage of the last spring/summer in which conditions are good to show and sell the car then pick up something like an '07 G35 that would be quicker/easier to sell early next year, or, if I have to, store while I'm gone for a year.

The info:

I have a student line of credit that's good (won't be converted to a conventional loan) until November that is at about 3.1%. The car loan is at 2.9%. While there is a difference there, if I were to pay it out, I would have a smaller balance owing at the bank by $8,000 which should offset the interest rate difference provided I sell it in the short run of the next half a year or so.

My question:

Would it be significantly more difficult to sell it with a lien? If so, I'm thinking I may as well pay it out and then when I sell the car, just put the money in the bank. I'll have good wiggle room in the mean time anyway.

However, if it's not much of a pain to sell with a lien, or if it's possible someone could take over the financing at 2.9%, perhaps just staying as-is may be more approachable by buyers.

For the people out there who have had a lot of experience selling/buying pre-owned cars, which do you guys think is the way to go? Also, if anyone has experience with VW Financing, do you know if they allow transferring of the loans, provided the buyer qualifies?

[Thaco]

it's not that hard to sell with a lien, you just have to have whoever purchases it to make the full vehicle purchase price out to the lien holder, the lien holder will then release the lien and send you the difference.


also most financing/leases are transferable with a credit check. i don't know about VW, but i asked honda and they said all you have to do is take the purchaser to a honda dealer and have the business manager do a credit check and transfer the financing, should take an hour or less, i would assume VW is similar.

[98type_r]

Pretty much exactly what Thaco says, or depending on how VW financing operates, they might just want a cheque for the balance outstanding rather than the full purchase price. Either way, you just have to work with a potential buyer and let him know the situation. A lot of people sell cars that are still leased/financed.

[Kloubek]

Liens are no big deal. I'm always sketched doing cross-border transactions like that, but local should be no issue.

I don't want to think about what kind of hit you're going to take on depreciation after just a short while though. All lux brands lose their initial value quickly, unfortunately.

If you want to transfer the exisiting financing to someone, you might want to make sure you CAN transfer it, via rules in the contract you signed. I am not sure if they are all transferrable. (They might be? I'd venture to guess a financing company doesn't really care who owes them - as long as the person had reasonable credit.)

[Sebasshole]

i agree with what they said above, but it will save you more time and headache to just buy the car out then sell it, there are alot of stupid people in the market to purchase a car and if they are not familiar with the lein process then you might miss out on a sale.

[Pahnda]

^^
Yeah, the last car I sold was a Chevy Aveo I had during University. The person that bought that was a real pain in the ass due to a lien that was still on it. The amount, however, was so low that paying out what was equivalent to like 5 payments seemed worth it just to ease his mind so that's what I did.


Originally posted by Kloubek
I don't want to think about what kind of hit you're going to take on depreciation after just a short while though. All lux brands lose their initial value quickly, unfortunately.

Yeah, I'm sitting at probably losing around 18% in the past year. Pretty crappy but better to cut my losses in any case, plus switching to an 07-something should lessen the depreciation on my car for the next year or so.

[Thaco]

Originally posted by Pahnda
^^
Yeah, the last car I sold was a Chevy Aveo I had during University. The person that bought that was a real pain in the ass due to a lien that was still on it. The amount, however, was so low that paying out what was equivalent to like 5 payments seemed worth it just to ease his mind so that's what I did.



Yeah, I'm sitting at probably losing around 18% in the past year. Pretty crappy but better to cut my losses in any case, plus switching to an 07-something should lessen the depreciation on my car for the next year or so.

you're going to get a totally different crowd selling an A4 than you did the Aveo... People with enough money or credit to buy an A4 actually understand money, and aveo purchaser... maybe not.