Buying a car with a bank loan on it?

[r2.ha]

Hey guys I need help with buying a used car with a bank loan on it. I tried looking it up on the internet but the only thing that came up was buying a car with a lien on it. I kinda know that a lien is a finance when you buy from a dealership or is it the same thing? cause I was looking at this used car from a private dealer and he said that he still owed $12000 on the bank loan he took out for the car so I kinda don't know what to do with this, but I really like the car. If anyone can help me with this dilemma I would appreciate it

[Type_S1]

if he doesnt pay the loan they can come and take your car then you have to sue him for your money back. Stay away from it!

[r2.ha]

oh okay thanks for the advice

[core_upt]

It's not a huge issue.
Ask for the most recent statement on the amount owed to the bank, say it's $12,000, and the asking price for the car is $15,000.
Go with him to the bank that is issued the loan, pay the bank the amount required to clear the lien ($12,000) and then hand him $3,000 in cash at the bank and sign the bill of sale there. You have paid $15,000 for the car, as agreed, and you know the loan is paid of because you did so yourself.

If you pay the guy the total amount and trust that he will pay the bank, he can easily not pay them and the bank can repossess their car, regardless of you thinking that you own it.

[BrknFngrs]

Originally posted by core_upt
It's not a huge issue.
Ask for the most recent statement on the amount owed to the bank, say it's $12,000, and the asking price for the car is $15,000.
Go with him to the bank that is issued the loan, pay the bank the amount required to clear the lien ($12,000) and then hand him $3,000 in cash at the bank and sign the bill of sale there. You have paid $15,000 for the car, as agreed, and you know the loan is paid of because you did so yourself.

Agreed. I've dealt with liens on my last 3 vehicles and it's not that big of a deal as long as you do it properly. Ensure that you get a release letter stating that the lender no longer has any claim to the vehicle (once the loan is paid off). Also be explicit in the bill of sale that their is a lien in place and that the sale is conditional on you receiving the release.

[racerjim]

I don't think you guys are reading it right.

If he said he got a loan from the bank to buy the car. The only issue would be if he used the car as collateral on the loan or if he just got a simple personal loan.

If he used the car as collateral then yes it needs to be paid off, or it will show up as a lien on the car in the future if he doesn't pay it.

But if he got a personal loan and did what he wanted with it, then its his problem, its not connected to the car at all.

I've got a car i bought with a personal line of credit but the bank has no idea what i spent the money on. for all they know i went on a vacation.

[CapnCrunch]

Originally posted by racerjim
I don't think you guys are reading it right.

If he said he got a loan from the bank to buy the car. The only issue would be if he used the car as collateral on the loan or if he just got a simple personal loan.

If he used the car as collateral then yes it needs to be paid off, or it will show up as a lien on the car in the future if he doesn't pay it.

But if he got a personal loan and did what he wanted with it, then its his problem, its not connected to the car at all.

I've got a car i bought with a personal line of credit but the bank has no idea what i spent the money on. for all they know i went on a vacation.

What are you reading?

[ddduke]

Originally posted by Type_S1
if he doesnt pay the loan they can come and take your car then you have to sue him for your money back. Stay away from it!

Worst advice ever.




Originally posted by BrknFngrs


Agreed. I've dealt with liens on my last 3 vehicles and it's not that big of a deal as long as you do it properly. Ensure that you get a release letter stating that the lender no longer has any claim to the vehicle (once the loan is paid off). Also be explicit in the bill of sale that their is a lien in place and that the sale is conditional on you receiving the release.

This.

[Cos]

Originally posted by Type_S1
if he doesnt pay the loan they can come and take your car then you have to sue him for your money back. Stay away from it!

What the F are you on? People buy vehicles with liens all the time.




OP. Go to the bank with him, get a copy of the discharge letter or some sort of proof the lien has been cleared. The actual letter takes 30-60 days IIRC. It isnt a big deal but you have to make sure that he pays the loan off. That is about the only concern.

[rage2]

The easiest way is to pay the full amount to the lienholder, and let the lienholder cut a check back to the seller. That way you don't have to worry if he's paying off the loan.

[ArjayAquino]

Originally posted by rage2
The easiest way is to pay the full amount to the lienholder, and let the lienholder cut a check back to the seller. That way you don't have to worry if he's paying off the loan.

DO this.

I sold my car and I had a car loan with my bank for it. I told him we both need to go to the bank. He just gave the bank the full amount and the bank took care of putting the money where it needs to be. The seller actually tried giving me the cheque without going to the bank with me (he knew I had a loan) but I told him he needs to go so everyone knows it has been taken care of.

[chkolny541]

Originally posted by ArjayAquino


DO this.

I sold my car and I had a car loan with my bank for it. I told him we both need to go to the bank. He just gave the bank the full amount and the bank took care of putting the money where it needs to be. The seller actually tried giving me the cheque without going to the bank with me (he knew I had a loan) but I told him he needs to go so everyone knows it has been taken care of.

:thumbsup: :thumbsup: