Selling a car that is still being financed at the bank

[RX_EVOLV]

Bumping an old thread cause I don't want to start a new one.

Never done this before but selling my car privately that's still being financed with BMO. Is it possible that the buyer prepare a certified bank draft for the full purchase amount, we both meet up at a BMO branch, I deposit the cheque into my BMO bank account over the teller, and then immediately instruct them to pay the car loan off in full.

1) Are they able to apply the funds to the loan immediately after the certified cheque is deposited.
2) Is this something that can be done over the counter at BMO?
3) So should the cheque be made out to my name AND Bank of Montreal?

I thought about having two separate cheques as Max_boost suggested, but then the amount oweing will change daily due to interest charges, so probably 'cleaner' to do that with a single cheque and then ask the bank to apply whatever is oweing directly at the time of transaction. Is this correct?

Thank you so much!

[vengie]

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Bumping an old thread cause I don't want to start a new one.

Never done this before but selling my car privately that's still being financed with BMO. Is it possible that the buyer prepare a certified bank draft for the full purchase amount, we both meet up at a BMO branch, I deposit the cheque into my BMO bank account over the teller, and then immediately instruct them to pay the car loan off in full.

1) Are they able to apply the funds to the loan immediately after the certified cheque is deposited.
2) Is this something that can be done over the counter at BMO?
3) So should the cheque be made out to my name AND Bank of Montreal?

I thought about having two separate cheques as Max_boost suggested, but then the amount oweing will change daily due to interest charges, so probably 'cleaner' to do that with a single cheque and then ask the bank to apply whatever is oweing directly at the time of transaction. Is this correct?

Thank you so much!

I've done this multiple times.

The bank can supply a letter to the new buyer stating the Lien is free (even though it may take a few business days to be made official). That way if there are any issues registering they have the letter.

Its actually very straight forward.

[NissanFanBoy]

Yup just get them to come with you to your bank so they can get proof the check's being applied to the outstanding loan..easy peasy.

[RX_EVOLV]

Nice. Thanks guys!

[Rocket1k78]

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I've done this multiple times.

The bank can supply a letter to the new buyer stating the Lien is free (even though it may take a few business days to be made official). That way if there are any issues registering they have the letter.

Its actually very straight forward.

I did this 2 years ago in edmonton and the bank(TD if i recall) wouldnt do a letter like that and they said it can take up to 30 days for the lien to be cleared off. I bought a bike and met the owner at the financing bank and they verified the amount owing as of that day, paid the bank direct what was owing and then i gave the remainder to the seller. All the bank could give me was a slip saying the amount i paid and to which loan number. I registered it the next day and it was no issues

[Twin_Cam_Turbo]

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I did this 2 years ago in edmonton and the bank(TD if i recall) wouldnt do a letter like that and they said it can take up to 30 days for the lien to be cleared off. I bought a bike and met the owner at the financing bank and they verified the amount owing as of that day, paid the bank direct what was owing and then i gave the remainder to the seller. All the bank could give me was a slip saying the amount i paid and to which loan number. I registered it the next day and it was no issues

This. The only bank that will regularly do a lien release letter on the spot is Servus Credit Union. BMO is one of the worst to deal with for liens I find. As a buyer it’s better (for me) to make two drafts, one for the lien amount and the remaining to the seller. At most they will likely give the buyer a paper recipt that shows money being applied to the loan. It will not be released immediately, more often than not it will be 7-14 business days. On the bill of sale I always fill out the lien details on the back, make sure it’s stated as “all liens cleared at time of sale” and have the seller initial that in case anything goes sideways.

I’ve done this a few hundred times now.