Buying a car with a lien

[SJW]

I want to purchase a used car from this family. She told me up front there is a loan on it from Bank of Montreal. So do I just get a carproof to prove this?

She also wants me to make out the cheque to the bank of montreal so I don't think she is out to screw me.

How does one protect himself?

[redblack]

go to bank, pay the bank loan out then get a letter stating that the loan has been paid in full

[Joe-G]

You could meet her at the bank, and pay everything off in front of them. That way you'll have all the proper paperwork, and receipts to prove that the lien has been paid off.

[ercchry]

or buy a car without a lean, why even bother when it is a buyer's market?

[Joe-G]

Originally posted by ercchry
or buy a car without a lean, why even bother when it is a buyer's market?

What's so difficult about buying a car with a lien? Sure its just a longer process, but if you really have your heart set on that car, it shouldn't really be a problem.

[ercchry]

well the fact that all used cars are dirt cheap right now why would you take the risk of something going wrong when you can just get a car with no lien on it... probably the same color and same miles too

[911fever]

^ you make a good point. Right now the deals are INSANE. Tell her to get her lien stuff figured out first before she sells it, and once it is good to go, then buy. Until than, forget about it.

[403Gemini]

Originally posted by 911fever
^ you make a good point. Right now the deals are INSANE. Tell her to get her lien stuff figured out first before she sells it, and once it is good to go, then buy. Until than, forget about it.

Chances are she needs the money to pay off the lien.

If you have your heart set on the car, a co-payable cheque to herself and the bank with a memo on the money order stating its for the lien payment and going to the bank with her to do the paperwork/transaction - then there shouldn't be any issues.

Its a bit of a pain in the ass and you may have to work around her schedule but the peace of mind is well worth it IMHO.

[Wildcat]

[leec001]

Originally posted by redblack
go to bank, pay the bank loan out then get a letter stating that the loan has been paid in full

That is what I did before

[brown_guy]

Originally posted by leec001


That is what I did before

Yup +1 and then you have to go to the regisrty to give them that letter so they can take the lean off it costs ten bucks

[realazy]

What's wrong with buying a car with a lien? Every car that is financed/leased will have a lein on it.

I would say most cars under 3 years old that are on the market (private sale) have a lein on them.

[canuckcarguy]

Pull a lien search at a registry agent (you'll need the VIN) to verify that there's just the one lien. Get a bill of sale from her, disclosing the lien amount. Make a cheque payable to her and to her bank, and then accompany her to the bank to pay out the loan. Have them verify, in writing, that they are receiving enough money to pay the loan, and that they have no further interest in the vehicle and will discharge the lien. And then drive away happy.

As for all of those people who suggest you purchase a lien-free vehicle, that's pretty extreme. That's like saying that if you're buying a house, since the market's down, you should only buy a house that doesn't need the mortgage discharged. Plenty of cars have liens on them, it doesn't make them difficult to purchase, and if this car is a good deal, go for it.

Very often, though not always, a vehicle with a lien on it is a better deal, because the owner has a time-sensitive motivation to sell. It also makes it less likely that there will be issues of ownership in the transaction - the fact that she has a lien on the car in her name is excellent proof that she is the owner (subject to the bank's interest), and that she has the authority to sell the vehicle.

Good luck.

[Tearin]

I agree with all the steps outlined by canuckcarguy but have a few things to add...

First, its not like the two of you can stroll into the vendor's bank at any time to effect the transaction. Confirm with the vendor that she has notified the bank of the intended transaction and set up an appointment.

Second, ask the vendor for the name/number of the bank representative with whom you will be meeting with. Call the bank representative and confirm the steps to the transaction.

Third, in order to release its security interest in the car, it's likely that the bank will not want to round trip the balance of the loan amount through the vendor's bank account. It's likely that the bank will want the cheque made out to it directly. Again, confirm details with bank rep.

Fourth, a no interest and release letter will give you title to the car in law. You should obtain this to be sure the bank can never come back and assert it has a charge over the car. Nonetheless, there is still the administrative matter of getting the title cleared at the PPR. Form 6 under the PPR regs deletes the security interest. Not all registry agents will do this filing (it's an optional service). So you should get a clear undertaking from the bank that they will do this OR you need to find a registry agent who will file this form upon presentation.

I could blather about how in an ideal world, the sale of the car would be conditional upon the release of the security interest AT THE PPR and everything would be held in escrow until then...but I digress.

[roopi]

I've done this before for a friend and all we did was go to the bank and pay off the loan. We were provided with proof from the bank that the loan was paid in full. Next we went over to the registry and showed them that the loan was paid and the lien was removed from the vehicle. Took about 30 minutes for the entire process.

[Wrinkly]

Interesting thread.

I want to buy an out of province vehicle with a lien - I think the lien may be greater than the agreed price (owner hit hard times and must sell). Any ideas how I should handle this?

It's on consignment with a dealer, and they assure me they can't legally sell it with a lien and that it "will be removed".

BUT, I don't want to go to all the trouble of getting certified cheque in place/ travel arrangements etc, to see it and (hopefully bring it home) just to find out it's not gone according to plan - or worse still, get it home and have problems inspecting/registering/insuring it as a result. I'm a complete noob to this - which is probably obvious.

Any input/experiences gratefully received.

[Redlyne_mr2]

1. Do a car proof this will give you the history of the vehicle in North America and will notify you as to whether or not there is a lien in any other provinces.

2. Have her get a payout letter from BMO to show you the amount owing.

3. Make the cheque copayable to her and BMO as she suggested.

4. Get a letter of release from BMO for your records and to provide to the registries

Easy as that

[Zero102]

Speaking of buyers market, what is with all the strange listings on canada trader?
A $4500 2008 VW Scirocco?
http://canadatrader.com/result/detai...calgaryalberta
A $5600 2008 Honda Accord?
http://canadatrader.com/result/detai...calgaryalberta
A $7000 2008 Volvo S40?
http://canadatrader.com/result/detai...calgaryalberta
$8900 2008 Lexus IS F?
http://canadatrader.com/result/detai...calgaryalberta


I know the market is in the garbage, but this seems a little scammy, no? I mean hell, I didn't think the Scirocco was even available on this side of the pond for a couple more years yet. I was helping a friend look for a car and I thought these sounded too good to be true, but this many scammer ads right now?

[Redlyne_mr2]

Originally posted by Zero102
Speaking of buyers market, what is with all the strange listings on canada trader?
A $4500 2008 VW Scirocco?
http://canadatrader.com/result/detai...calgaryalberta
A $5600 2008 Honda Accord?
http://canadatrader.com/result/detai...calgaryalberta
A $7000 2008 Volvo S40?
http://canadatrader.com/result/detai...calgaryalberta
$8900 2008 Lexus IS F?
http://canadatrader.com/result/detai...calgaryalberta


I know the market is in the garbage, but this seems a little scammy, no? I mean hell, I didn't think the Scirocco was even available on this side of the pond for a couple more years yet. I was helping a friend look for a car and I thought these sounded too good to be true, but this many scammer ads right now?

Yah autotrader is being taken over by scammers.. pretty bad.

[Aleks]

Originally posted by Zero102
Speaking of buyers market, what is with all the strange listings on canada trader?
A $4500 2008 VW Scirocco?
http://canadatrader.com/result/detai...calgaryalberta
A $5600 2008 Honda Accord?
http://canadatrader.com/result/detai...calgaryalberta
A $7000 2008 Volvo S40?
http://canadatrader.com/result/detai...calgaryalberta
$8900 2008 Lexus IS F?
http://canadatrader.com/result/detai...calgaryalberta


I know the market is in the garbage, but this seems a little scammy, no? I mean hell, I didn't think the Scirocco was even available on this side of the pond for a couple more years yet. I was helping a friend look for a car and I thought these sounded too good to be true, but this many scammer ads right now?

Yep they are all Scams. I wonder how many people actually bother wasting their time contacting these people.