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      05-03-2013, 03:37 PM   #1
alantan23
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Selling Financed Car to Private Party

Hi all.

Has anyone ever sold a car currently being financed (penfed.org) to a private party? What measures can be taken to protect both buyer and seller?

Thanks in advance.
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      05-04-2013, 01:51 PM   #2
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I bought mine from a private seller who was still financing the car through BMW.
Write up a buyers/sellers agreement showing the year, make, model, vin#, and both of your names (including signatures). You should get it notarized, especially if you are leaving the seller a deposit to hold the car.
Make sure you have the exact payoff amount because that amount MUST be satisfied for the title to be clear. Call the bank with him and have them verbally confirm the payoff.
Also make a copy of both licenses.
These steps should protect both parties involved.

FYI in the State of New Jersey, motorists are not title holders like NYS until all liens have been satisfied so if your seller is from Jersey be prepared to wait for that title, which takes about a month. It has to be released from the bank, sent to dmv, updated, and then sent to the original owner who then has to send it to you or your bank (if your financing)...I had to find that one out the hard way

Goodluck
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      05-04-2013, 02:47 PM   #3
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Pretty much what has been said. I sold my g37 while it was still financed under IFS. We signed a sales agreement with exact payoff. Guy sent the check to the IFS and they sent the lien release directly to him with my authorization. He picked up the car
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      05-04-2013, 06:56 PM   #4
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I went through the same procedure as mentioned above when buying my 335i. Difference was that I took possession of the car right there and then. No way was I going to make out a $30k check to the buyer and only have a piece of notarized paper to show for.
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      05-05-2013, 11:57 AM   #5
alantan23
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How do you take posession of the car? The financing company doesn't hand you the title right away. I'm the potential seller btw. I figure I'd do all the steps above with the paperwork AND let the potential buyer store the car at his residence in the mean time.
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      05-05-2013, 08:14 PM   #6
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Quote:
Originally Posted by alantan23 View Post
How do you take posession of the car? The financing company doesn't hand you the title right away. I'm the potential seller btw. I figure I'd do all the steps above with the paperwork AND let the potential buyer store the car at his residence in the mean time.
Yes that's what I meant..Potential buyer takes possession of the vehicle while the title/lien release are mailed.
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      05-06-2013, 10:19 AM   #7
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Quote:
Originally Posted by bwsteg View Post
I went through the same procedure as mentioned above when buying my 335i. Difference was that I took possession of the car right there and then. No way was I going to make out a $30k check to the buyer and only have a piece of notarized paper to show for.
Agreed, thats why I only gave a small deposit to be safe and to show good faith to the seller.
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      05-07-2013, 01:35 PM   #8
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I had the buyer of my Audi send a certified bank check to TD (they held my loan) - they then released the title to me (via overnight shipping) and I signed it over. (with a signed agreement and all that of course)
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      05-07-2013, 03:07 PM   #9
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So did you guys buy/sell the car for the payout amount or more? If its more, how does it work? Does the buyer send one check to the finance company for the payout amount, and another check to the seller for the difference?
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      05-07-2013, 03:56 PM   #10
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Quote:
Originally Posted by MyE92 View Post
So did you guys buy/sell the car for the payout amount or more? If its more, how does it work? Does the buyer send one check to the finance company for the payout amount, and another check to the seller for the difference?
No, the buyer had no idea what the difference was in my case. He sent the check to the bank, the bank sent my title and a check for the difference.
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      05-07-2013, 06:28 PM   #11
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Basically when the seller and buyer agree to a purchase price, the buyout amount is irrelevant. If buyout is more, seller adds the difference or 2 checks can be sent..If buyout is less, buyer makes out two checks or makes out check to finance company and hands seller cash for the difference...
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      05-07-2013, 07:44 PM   #12
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Quote:
Originally Posted by MyE92 View Post
So did you guys buy/sell the car for the payout amount or more? If its more, how does it work? Does the buyer send one check to the finance company for the payout amount, and another check to the seller for the difference?
In my case the payoff was less then the purchase price so I had a check sent to BMW and I gave the seller the difference.
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      05-07-2013, 08:18 PM   #13
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5. Complete the Sale

You usually don't need a contract for a private-party sale because most of the sale is handled by your bank. Once you and the seller have agreed on a price, contact your bank lender with the car's information and the negotiated price. They'll issue you a pre-written check. The next step is to transfer the car's title. You should go to the DMV with the seller to complete this transaction. Do not physically hand over the check until you have the modified title in hand.

An exception is if the seller still needs to satisfy a lien (or loan) on the car, which means the title can't be transferred to you until the loan is paid. Giving the seller a check yourself is risky because they could simply cash it and not pay off their loan. Instead, ask the seller to have their bank lender give them a 15-day payoff amount (which is the money needed to satisfy the loan). Then tell your bank that same information. Using your loan, your bank will pay off the existing lien for the seller and give them any cash left over. The seller's lender will then send you the car's title in your name.
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      05-07-2013, 09:10 PM   #14
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Quote:
Originally Posted by Leekay07
5. Complete the Sale

You usually don't need a contract for a private-party sale because most of the sale is handled by your bank. Once you and the seller have agreed on a price, contact your bank lender with the car's information and the negotiated price. They'll issue you a pre-written check. The next step is to transfer the car's title. You should go to the DMV with the seller to complete this transaction. Do not physically hand over the check until you have the modified title in hand.

An exception is if the seller still needs to satisfy a lien (or loan) on the car, which means the title can't be transferred to you until the loan is paid. Giving the seller a check yourself is risky because they could simply cash it and not pay off their loan. Instead, ask the seller to have their bank lender give them a 15-day payoff amount (which is the money needed to satisfy the loan). Then tell your bank that same information. Using your loan, your bank will pay off the existing lien for the seller and give them any cash left over. The seller's lender will then send you the car's title in your name.
Two things, a notarized contract is certainly needed to make this safer especially when cash is involved. Not all vehicles are purchased via financing.

Also, when a buyer is going to buy a car with a lien. What is recommended is that buyer go to his bank, request a certified or cashiers check to the name of the financial institution. This prevents seller from being able to cash check. Also both seller/buyer can mail out the check together so both parties are confident that the check was indeed mailed.
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