How to Turn Over a Car Title When Someone Other Than a Financial Institution Has a Lien on It

Most car buyers use banks, credit unions or other traditional financial institutions to obtain a loan. Some people turn to alternative financing for their vehicles. The lender is entitled to place a lien on the title until the debt is paid. A mechanic may also place a lien on your vehicle. Normally, you must pay this debt and clear the lien before you sell the car. But it is possible to sell a car and turn over the title that has a nontraditional lien attached to it.

Instructions

1

Talk to the lien holder about selling the vehicle. Ask if the holder would be willing to run credit checks and approve a suitable buyer to assume responsibility for the lien.

2

Advertise the car in thrift papers, newspaper classified ads and online. Negotiate with prospective buyers and make the deal. Be open and honest about the lien and the necessity of passing a credit check when speaking with buyers.

3

Have a suitable buyer fill out a credit application. Give it to the lien holder so it can run a credit check. Repeat the application process until the lien holder approves an applicant.

4

Have the lien holder sign a transfer contract releasing you from the debt. Get this document notarized so you can take it with you to the motor vehicles department.

5

Have the buyer sign a purchase contract. Review the document with the person in detail and be sure he understands he is assuming your debt by signing the contract.

6

Provide the lien holder with a copy of the purchase contract. Collect any money you may be getting from the deal and give the keys to the buyer.

7

Sign the title and hand it over to the department of motor vehicles along with copies of all the contracts involved in the sale. Take the buyer with you so she can review the documents with an agent of the DMV and take official possession of the vehicle.