Learn me: selling car with lien

So I've found some decent interest in my mazda2 and now it brings me to the point. Where I must be more educated on this process. I'm used to just selling cars that I already 100% own with no loan.

This is how I understand it:

I have the title in my hand but it shows it still has a lien on it. All owners on the title (I have a co-singer) sign their name on the title and buying/selling parties fill out the spot on the title for purchaser and mileage info.

So I take the money from the person buying the car and pay my loan off and then the bank sends him the new title? But then they need some letter saying the loan is paid off to actually register their newly purchased car?

Some important information, it is an IL title and both buying/selling parties are located in MI. I can change the title to MI to make it easier I suppose but its some extra money I dont want to spend and I especially hate going to the secretary of state office.

Anyone have any experience with this?

This seems like a huge pain in the ass.

Is the lienholder local to you?

Mine was local to me and I just met the buyers at my lienholders location. Boom, they pay money, lien released, title signed instantly to them.

Its chase bank, they are everywhere here.

May I suggest calling Chase Bank? We can talk all day long, but they will be the ones getting payed, so should have no problem telling you exactly what to do.

In reply to fidelity101:

IDK how chase works.....I never actually had a title in my hands with an unreleased lien though.

Sperlo has a great idea.

In reply to N Sperlo:

I did that initially and then they just ended up mailing me the title. I may have to go in again.

Banks are the biggest pain in the ass. Oh wait, This mus be for the "who new" thread...

I say step one is contact the lien holder and go from there.

N Sperlo wrote: Banks are the biggest pain in the ass. Oh wait, This mus be for the "who new" thread...

I have to deal with the state and the bank, two of the most helpful organizations on the planet!

Who is the lien with? Is it with a bank that you, your co-signer, and the buyer can physically meet at? If so, the easy way is to schedule an appointment with the bank, co-signer, and buyer. Do the deal there; the buyer makes the check out to the bank (assuming that the balance is greater than the selling price), or to you (other way around), they release the lien right there, and everything should be taken care of. The other "easy button" is to just pay off the loan right now if you can float the cash.

Note: Call your bank first to make sure this can happen there.

In reply to mtn:

That was my idea however the co-singer lives 3 states away,

This whole co-singer bullE36 M3 was a stupid idea but I wanted to be sure I got the 0% apr however my credit was good enough not to need it and now it is causing this big pain in the ass.

This happens every day.
When a dealership sells a used car, the dealership does not own the car 100%. The dealer borrowed the money to get the car on his lot. The bank likely owns 90% of the car.
Here in Ohio, that is why there is such thing as 30 day, temp tags. This 30 days is needed for the dealership to pay off the bank and allow time for the title to get in the name of the new owner (and potentially, the new owner's bank who now owns a large portion of it.)

fidelity101 wrote: In reply to mtn: That was my idea however the co-singer lives 3 states away, This whole co-singer bullE36 M3 was a stupid idea but I wanted to be sure I got the 0% apr however my credit was good enough not to need it and now it is causing this big pain in the ass.

Does co-signer trust you? Do you trust FedEx? Send him the title, fedex overnight, have him sign it and overnight it back.

Co-signer should not be a problem. That person is not co-owner, just co-debter.
The reason of a co-signer is to make sure the car gets paid off. It would not require this person if you are capable of meeting in the bank and paying it off.

Just to be sure, is the title solely in your name?

JohnRW1621 wrote: Co-signer should not be a problem. That person is not co-owner, just co-debter. The reason of a co-signer is to make sure the car gets paid off. It would not require this person if you are capable of meeting in the bank and paying it off. Just to be sure, is the title solely in your name?

From his first post, it sounds like the co-signers name is on the title as well.

Once the lien is paid off the bank sends the title to YOU. Then you sign it and send it to the buyer.

You might be able to have the co-signer give you a limited power of attorney to sign on their behalf if you were going to meet the buyer at the bank, and only need the co-signer to sign the title. That way you aren't fed exing the title itself. I would walk in to your local branch where you would plan to meet the buyer and talk with them about the transaction.

I just did this with my wife's VW. It was financed by VW. Here is what I did:

1. Sold car - got a bank draft from buyer
2. I cashed bank draft at branch of my bank.
3. I obtained a bank draft for the balance owed to VW and sent it by overnight courier.
4. Lien release sent by fax to me by VW after 3 business days.
5. Lien release forwarded to new owner via email.
6. New owner had temp tags (10 day) until lien release was received.

Up here a vehicle cannot be owned by more than one person, so I can't help you with the co-owner issue.

I'd suggest getting the lien release, and then getting a clear title. People get funny and skittish with a title and a lien, even with the lien release right there with it.

somehow, the lien holder needs to be paid off to release the lien. whether you do pay off the loan yourself before selling the car or use the money from selling the car to pay it off doesn't matter.

here in MN, the owner of the car gets a title with any lien holders listed on it.. before the title can be transferred, the lien holder needs to fill out the lien holder card that they got in the mail from the state that says that the lien is released... once you have that signed lien release card, it transfers just like any other title.