Question: Buying Vehicle with a Lien

So I've got a deal in place on an 05 Silverado short bed regular cab with the 5.3 for $5k. Current owner still owes money on the truck, thus the title is held by his lender (USAA.) He needs the money from the sale to pay off the loan and USAA has no local branch or anything, thus I can't just go there with him and have them immediately release the title to me. Furthermore, I am taking a loan on part of the purchase price (because rates are dirt cheap through my CU and it keeps cash free for me), so I don't know what that looks like for my CU in terms of being able to get the title to them.

This can't be an uncommon situation, nor do I feel like the guy is trying to screw me in any way, I've just never been here before and want to make sure I cover my ass in every way possible. What's the typical protocol here?

My first thought would be to have your CU talk to USAA and have them work it out. Granted, I'm a bit surprised any bank is interested in writing a car loan for such a small amount.

Ian F wrote: My first thought would be to have your CU talk to USAA and have them work it out. Granted, I'm a bit surprised any bank is interested in writing a car loan for such a small amount.

The two financial institutions should be able to handle it between themselves. IE, bank transfer and release title, or similar.

Could be a personal loan.

In reply to z31maniac:

True... but if an unsecured personal loan, his bank won't care about holding the title.

In reply to Ian F:

Yea yea, I know it seems silly, but my credit union is really flexible with their vehicle loan terms (they'll pretty much lend on anything worth >$3k) and the rates are next to nothing. With my savings still recovering from a first house purchase last year, I'd rather keep the cash on hand.

That makes sense though, I'll see if they can handle it directly with USAA. That seems easiest by far.

Z31 is correct.. Your CU will be able to sort it out, so if the the guy still has 2k left on the loan (say), USAA will already have the incoming money earmarked to pay that off, so he'll get the title released and 3k in his account.

Edit: I should add that I know this because I was in the same situation (sold a Boxster for 13k that I owed ~10k on).

The banks should be able to sort it out.

Yup. Just walked into my credit union with the owner, his payment book, and the truck sitting out in the parking lot. Signed where i was told to. Left with truck.

As above when this happens I send a check to the bank directly with the release info. They send the owner the leftover money and I get the title directly. Everyone is protected.

God damnit...So I called my credit union and I don't know if I'm just talking to a Colton or what the deal is (guy honestly didn't sound too bright), but the answer was "Uhh.......we don't do it that way. We make the check payable to the current title holder..."

So I would have to pay the dude, wait for him to send the check to his lender, get the lien released and the title sent to him, then go back and do the title transfer. I don't have a reason to not trust the guy, he seems perfectly honest and I'm sure he is, and he is willing to let me take the truck in the meantime. I still don't like this.

Is there any way to pretty well cover my ass here (signed, notarized BOS or something?) or is this just not worth pursuing? Or should I just try calling the CU again tomorrow and hope I don't speak to another Colton?

In reply to Furious_E:

I would call or stop by the credit union again, but also call your preferred notary.

If anyone in this backward state will know how to handle the title, it would be the notary that does this kind of thing a lot.

In reply to Furious_E:

USSA's name is likely on the title. This makes USSA an equal title holder. Pay USSA. From there USSA will keep what is owed to them and send the remaining pay to the other owner, the guy driving the car.

In reply to RevRico:

That's not a bad idea actually, hadn't thought of that.

In reply to John Welsh:

That's what I would have assumed, I can't fathom why this would be an issue for the credit union. I think I'm gonna call again tomorrow, see if I can speak to someone else, and likely try asking differently.

Go in person and see if you can talk to a manager vs a clerk who is used to deposits/withdrawals.

In reply to z31maniac:

Nearest location is like an hour from work and they have no weekend hours. Freaking bankers.

I stopped at a notary on my way home and they said the common thing to do is just a notarized bill of sale. So that's the way we're gonna do it, I'll take possession of the truck upon payment and have a notarized BOS in hand.

Furious_E wrote: In reply to z31maniac: Nearest location is like an hour from work and they have no weekend hours. Freaking bankers. I stopped at a notary on my way home and they said the common thing to do is just a notarized bill of sale. So that's the way we're gonna do it, I'll take possession of the truck upon payment and have a notarized BOS in hand.

In reply to z31maniac:

Picture isn't working

Edit: Quoted your post and the link showed up. I'm really not that far out in the sticks, the stupid credit union just has very few branches

Furious_E wrote: In reply to z31maniac: Picture isn't working Edit: Quoted your post and the link showed up. I'm really not that far out in the sticks, the stupid credit union just has very few branches

Hehe, you get the sense of humor. :)

Sorry this transaction is turning into a PITA.

Well it gets even better

Finally got my loan check in today, rushed home from work, and texted the seller to see if he was still good to do part 1 of the transaction tonight. He gets back to me right away and says let me see, give me a minute. I figure he's making sure the notary is still open, or the wife isn't busy or whatever.

45 minutes passes and the dude finally calls me. He owes a little over $6k on the truck still and was planning on converting the balance to an unsecured personal loan, all of which I knew previously. Well, turns out his bank won't approve him for the unsecured loan. And you're just NOW finding this out, dipE36 M3? Ugh. At least the guy isn't dishonest, he's just a berkeleying moron.

So here I am, check in hand from my CU, insurance policy purchased on the truck, and no idea if this transaction is actually gonna happen. What a royal, epic clusterberkeley. So now I've gotta call the CU tomorrow and see what I have to do in the highly likely scenario that I have to bail on this whole ordeal. Massive goddamn clusterberkeley.

Good thing I took tomorrow off, I will be drinking heavily tonight. And I am never buying anything with a lien again unless the payoff is less than purchase price and the bank is local. berkeley ALL of this. I feel like an idiot.

How much dollars does he need a person loan for?

In reply to John Welsh :

Like $1300, not a huge amount. Don't know what his credit/income situation is like, but I feel like this should not be that hard.

You want another story? When I was Elise shopping, I found one in Washington. Seattle, I think, or the next town south. We negotiated on the phone, came to terms, deal. Dr.Linda was going to fly to Seattle, meet him, give money, drive the car back to Arkansas. I had insurance on it, (real) bank check from the Walton Family bank (Arvest), flight booked on a no-refund red-eye, ready to go. We get up at 0300, get ready to head out the door, I think, ya know, I haven't heard from this guy in a while. Better check my email. Go upstairs, boot the box, check email. Dumb berkeleyer went out for "one last ride" and totaled the car the night before. Now I had to undo all that. So, yeah, I know how you feel. Have a beer on me.