How to Sell a Car & Transfer the Title in Pennsylvania

Millions of vehicles are sold in the U.S. every year through private sales, meaning that individuals sell their vehicles to another party without involving a dealer. In some cases, owners can get a higher price for their vehicle by selling it themselves, as opposed to trading in the vehicle for cash on the price of a new vehicle. For residents of Pennsylvania, selling a vehicle to another individual involves transferring the title to the new owner so that a new title can be issued and the vehicle legally registered with the Pennsylvania Department of Transportation.

Instructions

1

Sell the vehicle to another party. Generally, this involves advertising the vehicle for sale in a local publication or online. Agree on terms for the sale with the buyer.

2

Prepare a bill of sale. The bill of sale certifies the date of the sale, the amount of the sale, the name and address of both parties and information about the vehicle, including the year, make, model and odometer reading. Many sellers choose to list the vehicle as being sold "as is," to avoid disputes about necessary repairs and the condition of the vehicle.

3

Locate your vehicle title. It is a good idea to keep your title in a safe, easily accessible place, such as a fireproof box or filing cabinet, so you can easily locate it.

4

Fill out the reverse side of the title with the buyer's name and address. You also will need to fill in exact mileage from the odometer.

5

Sign the title in the presence of a notary public. Only notarized titles are considered valid. The buyer also must sign the title and have it notarized.

6

Give the notarized title to the buyer. The buyer can then take the title to the local tag office to complete the title transfer process.

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Rules on Selling a Car With a Lost Title

All vehicles sold in the United States must come with a title. If you have lost the title, you should request a duplicate before selling the vehicle. Selling a car without the title does not allow the buyer to legally assume ownership. Duplicate titles must be requested through your state's motor vehicle department.

Features

To receive a duplicate title, you must fill an application at your motor vehicles division. Its website may also allow you to download and mail the forms for processing. As long as you prove that you are the current owner of the vehicle, a duplicate title can be mailed to you. On the application form, your name address must match the same on file with the motor vehicles division. A copy of your birth certificate and a valid driver's license may be required to certify your identity.

Considerations

In special circumstances, additional documentations may be required before a duplicate title is administered. For instance, if the owner of the vehicle has died and the title has been lost, a copy of the death certificate must be provided along with proof you are the spouse or next of kin. If you have power of attorney and have lost a title to the owner's car, the original signed power of attorney document must be brought for review.

Time Frame

Before you list the car for sale, you should have the duplicate title in your possession. It takes up to eight to 10 weeks for your state's motor vehicles division to mail the title. You must also pay any fees associated with the replacement of the title. Make sure that you let potential buyers know that the vehicle comes with a duplicate title and not the original title. Fill out the seller and buyer information on the duplicate title to transfer ownership to the buyer.

Significance

If there are liens on the vehicle, you will not be able to receive a duplicate title before selling the car. The liens must be settled with the lien holder before a new title can be released. The lien holder must prepare a letter on official company letterhead that states the lien against the vehicle has been satisfied and the title can be given to you.

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Can You Remove a Name From a Co-Signed Auto Loan?

Many times, a spouse, parent or close friend will co-sign an auto loan for another borrower to help the borrower qualify for the loan. A clear cut "yes" or "no" answer on whether or not a lender will drop a co-signer from a loan before it is paid off is not possible, as it is up to the individual lender to make that decision based on the circumstances specific to the loan, including the borrower's current financial standing and credit rating.

What Is An Auto Loan Co-Signer?

An auto loan is a binding contract that is drawn up between a lender and a borrower. If a borrower is considered high-risk, he can ask a third party to co-sign on the loan. A co-signer, or co-maker, is a person who signs a promissory note and legally assumes equal responsibility for an auto loan. Once all the parties agree to the terms and conditions of the auto loan, it is considered legal and binding.

Opt to Keep the Original Auto Loan

If you want to be removed as the co-signor, contact the lender by phone or write a formal letter requesting that your name be removed from the auto loan. The lender can approve or deny this request for any number of reasons. For example, if the other borrower has a higher credit score or has had an increase in income, you can argue that your attachment to the loan is no longer necessary, as the other borrower now qualifies for the loan on his own accord. Using this scenario, the original loan contract would stand, but your name would be removed and you would no longer be held financially responsible for the repayment of the loan.

Option to Refinance the Auto Loan

If a lender refuses to remove your name from the auto loan, and the other borrower has improved his financial strength to such a degree that he can refinance the auto loan without adding your name to the contract as a co-signer, you can ask to be dropped from the original loan. Through a process known as refinancing, the other borrower, if she agrees, can apply to refinance the auto loan under a new control and possibly at a lower interest rate.

Considerations

In most cases, you can take legal action against the other borrower on the auto loan if she has defaulted on the auto loan, refuses to repay the auto loan or has mislead you, the co-signer, in some way regarding her intention or ability to repay the auto loan amount. Contact a lawyer to make a determination about the merits of your request to force the sale of the car in a court of law.

Warning

A lender has a legal right to refuse any manipulation of an original auto loan contract. The credit worthiness of the other borrower will ultimately determine how the lender responds to your request to drop your name from the loan. Be prepared for the lender to say that the loan must be paid in full before any party can have his named "removed" from the loan.

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What to Know About Buying Salvaged Cars at Auctions

The term "salvaged car" can mean a number of different things, depending on who is using it. In the context of a used car auction, you need to determine exactly how the auctioneers are using the term, and decide whether to bid based on that information. Your main concern is that the car is in good condition, or at the very least that you know about any defects, and that the title is valid.

Buyer Beware

The reason that you can get cars more cheaply at auctions is that they are less convenient and more risky than buying from a dealer. It is possible to get a great deal at an auction, but it's also possible to get badly burned if you are foolish and don't do your homework. Arrive at the auction early so that you can thoroughly inspect any cars that you are interested in. Policies at auction houses can vary widely, but most of them operate on a "buyer beware" policy and will not react sympathetically if you buy a car and then change your mind and try to get your money back.

Titles

Be sure that the title of any car you buy is valid. If the car has no title, don't buy it unless you are buying it for parts and don't intend to put it on the road. You may find that a car with no title or with an invalid title is impossible to register, and you will be left with a very expensive lawn ornament. If the auction house you are dealing with allows you to inspect titles or cars in advance of the auction, take advantage of this opportunity to do some research and make sure that everything is above board.

VIN Check

If you can inspect the vehicle ahead of time, be sure to write down the VIN. This is the Vehicle Identification Number, and can usually be found on a small plate that is attached to the dashboard under the windshield on the driver's side. A number of websites offer VIN checking services for a fee. If you have the VIN, you can find the history of the car, including when and where it was sold, how many people have owned it, and whether it has ever been wrecked, totaled or salvaged. This information can be invaluable in avoiding buying a headache.

You Get What You Pay For

Don't go to a car auction with the expectation that you will buy a pristine vehicle for 10 percent of its value. Car auctions are frequented by many people with experience in the field. If a car sells for very little money it's because they don't want it, and if they don't want it there's certainly a reason for that. If you are careful and pay attention, you can get a decent vehicle for less than you would pay a dealer, but, as in any other venue, the less you pay, the less car you will get.

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How to Refinance the Interest Rate on a Car Loan

Auto loan interest rates fluctuate almost as much as the weather; one week they're at an all-time high, while the next week may bring all-time lows. If you financed your vehicle with a higher interest rate loan, it may be possible to lower your payments and save on finance charges by refinancing.

Instructions

1

Contact your lender to receive a payoff quote on your existing auto loan. The payoff amount is how much you will need to borrow under a new loan to swap it over. Most lenders will grant you a payoff quote over the telephone, and some will let you access online.

2

Compare interest rates between banks. Always give your existing lender an opportunity to offer a lower rate. They want to keep your business and may be competitive with other banks. Get quotes from three to five auto lenders. Check with your local bank and with online banks. See the resources below for some online refinancing options.

3

Compare the terms of each refinance offer and make sure they fit within your budget. Just because an interest rate is lower doesn't mean the payment will be lower. The loan term can make a difference in payments. Decide what term (typically 36 to 60 months for refinancing) suits your needs.

4

Complete the financing by signing the new auto loan documents. Many lenders will require additional documentation before finalizing a loan, such as insurance verification and proof of income. Make sure you change the lienholder on your insurance policy to reflect the new loan if you have changed banks.

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How to Co-Sign a Lease for a Car

Car leasing companies consider the buyer's credit score to determine whether he qualifiesfor the lease and to set the terms of the agreement. If the buyer has a poor credit score, he may get approval for a lease if someone cosigns the lease. The cosigner accepts full responsibility to pay the amount owed on the lease if the primary borrower fails to make the required payments. This is not a responsibility to be taken lightly. The process is fairly simple, but the consequences could be severe.

Instructions

1

Discuss the monthly payment amount with the person who will be taking out the lease. Ask her if she has worked out a monthly budget that includes the lease payment, and, if you are concerned about her ability to pay, review the budget together to ensure that it is balanced.

2

Go together to the car dealership where you will sign the lease.

3

Provide your Social Security number so the leasing company can run a credit check. Your credit score will help determine the terms of the lease.

4

Provide information on your income along with any required documentation. The procedure varies from one company to another, but you might need to provide recent pay stubs or last year's tax return to prove you have enough income to support the lease payments.

5

Read the lease agreement carefully. Note the amount of the lease payments and how many years the lease lasts. Consider again whether it is a risk you are willing to take.

6

Complete all required paperwork, and sign the lease agreement.

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Problems You Face When Purchasing a Car

Purchasing a car is an exciting experience for most buyers. A new car oftentimes represents a new place in life where an upgrade to a better car is a reward for hard work and a job well done. But buyers can encounter a number of problems when purchasing a new or used car. The way that these problems are faced and resolved may have a direct impact on the purchase price of the car and the enjoyment that the car provides.

New vs. Used

One of the oldest dilemmas when purchasing a car is whether to buy a new car or a used car. Car buyers vary greatly on this topic, as some desire the dependability of a new car, while other buyers prefer the cost savings of a used car. The major problem when deciding between purchasing a new or used car is the issue of depreciation. A new car will lose 70 percent of its value over the first four years of its operating life. While many car buyers have no qualms about this, others prefer to purchase a car whose previous owner bore a large brunt of the vehicle's initial cost.

Financing

Most potential car buyers intend to purchase their new or used car by means of an installment loan. These loans require that the buyer have a relatively favorable credit history that is clear of major problems such as bankruptcy or repossession. Purchasing problems may occur if the loan applicant has a spotty credit history, resulting in a high interest rate or a loan application rejection. While there is nothing wrong with purchasing a car with an installment loan, some car buyers prefer to self-finance the purchase of a vehicle by saving money to purchase a car in full with cash. Dave Ramsey, a popular personal finance expert, recommends purchasing cars with cash and investing the amount that would have otherwise been spent on a car payment in a reputable mutual fund.

Vehicle History

Many car dealers sell automobiles that have a history of wrecks, floods, fires and other problems. Buyers that purchase these flawed cars can nearly guarantee that the car will have a major mechanical problem at some point in its operating life. Car buyers who are seeking to purchase a used car should always ask to see a vehicle history report on the car they may purchase. A vehicle history report will show vital information, such as insurance claims filed on the vehicle and police reports that will ensure that the car is not stolen property.

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How to Calculate the Interest on a Lease

For some consumers, the option to lease a vehicle is more attractive than the option to purchase it outright. Monthly payments on an auto lease are computed as a sum of interest and what's known as a "depreciation" payment. The calculation to determine what percentage of your monthly payment is interest is unusual. With a little patience and concentration, however, you'll be able to complete it in no time.

Instructions

1

Call your dealership to obtain the manufacturer's suggested retail price (MSRP) for your vehicle. Ask the salesperson for the "residual value" of the car, which represents what percentage of the car's value will remain at the end of the lease term. As an example, you have a vehicle with an MSRP of $30,000 and a residual value of 55 percent.

2

Express your residual value as a decimal by dividing it by 100. Multiply this decimal by the MSRP of your car. For the example, this results in a monetary residual value of $16,500.

3

Determine your "money factor," which is a special number used to calculate the interest on all auto leases, regardless of term length. Divide your whole-number interest rate by 2,400. If the example vehicle has an interest rate of 8 percent, its money factor is .0033.

4

Add your MSRP and monetary residual value together. For the example vehicle, this results in a sum of $46,500.

5

Multiply this sum by your money factor to determine the amount of interest included in each month's payment. For the example, this is $153.45.

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How Much Should I Spend on Car Payments?

If the type of car you want suits your needs and fits into your budget, you are one lucky person. What usually happens, though, is that the car of your dreams is not practical or affordable. Before you indulge your dream car fantasies any further, determine what you can actually afford.

Down Payment

Before you buy a car, consider your monthly car payment and then scrape together a down payment, either with cash, a trade-in or a combination of both. The more money you put down on a car, the lower your monthly payments. Even if the dealer allows you to make a small down payment, Consumer Reports advises that you put down at least 20 percent of the purchase price of the car. Reducing the amount you have to finance also reduces the interest you pay over the life of the loan.

Budget

Before you borrow money to buy a car, determine how much you can afford to pay each month. One rule of thumb is that your total debt should not exceed 36 percent of your income. Use your pretax income as your base. Then, determine your annual debt. Include items such as mortgage or rent, utilities and your credit card bills. If, for example, your total debt accounts for 30 percent of your income, you should not spend more than 6 percent of your income on a monthly car payment. Say you make $50,000 a year; 6 percent of that is $3,000. Divide that by 12, and you get $250, the total you can afford to spend each month on a car payment.

Interest Rates

Your monthly payment also depends on what kind of interest rate you get. Don't automatically finance through the dealer without first shopping around for a better rate, perhaps from your bank or credit union. Get a copy of your credit report from AnnualCreditReport to get an idea of how high or low your credit score is. You won't be able to view your actual credit score unless you pay extra -- usually around $15, as of 2010 -- but you can check for the accuracy of the credit report. If there are errors, your score could appear lower than what it should be. Also, once you know your credit score, you know whether you qualify for the best interest rates or whether you have to settle for paying a higher rate.

Expert Advice

It's easy to be lured into buying a car you can't afford, but don't do it, recommends Bob Litwin of the Consumer Credit Counseling Service. Just because you qualify for a loan, doesn't mean you have to take and spend all of it. If you buy a car you can't afford, the new-car thrill soon fades when you can't afford to go out to dinner or even buy groceries.

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How to Buy a New Car With a High Interest Rate

If you're in the market for a new car but you aren't blessed with a great credit rating, you might only be eligible for a loan with a high interest rate. However, a high interest rate isn't as bad as it seems. In fact, you might end up digging yourself deeper in the hole by trying to figure out a way around the rate. The best thing to do is deal with it.

Instructions

1

Don't shop around. Whatever you do, do not look for a lower interest rate. If you have bad credit, chances are you aren't going to find a low interest rate anyway. Do you really want to mess up your credit even more by searching on end for an interest rate that's only lower by a few decimal points? The problem with shopping around is that when you apply to various lenders, you get a mark on your credit each time you apply. The more marks you have, the more it will drag down your credit. So it's better to stick with the first offer and work on building your credit up from there. If you continue shopping around, it will likely drive your interest rate up even higher than if you would have stuck with the original in the first place.

2

Don't attempt to repair your credit. It's also not a good idea to go to places that attempt to fix your credit because you will likely pay a lot of fees and will still end up having to pay a high interest rate. You also don't need to pay money to a company to remove something from your credit report that isn't supposed to be there. You can have it removed yourself for free. Also, don't trust in companies that offer quick credit fixes because that blemish on your credit report can't be removed for at least 7 to 10 years. Credit repair takes time, so if the company is urging you to falsify information on the application, you can guarantee they are scam artists.

3

Know the facts about higher interest rates. It's not necessarily bad to have a loan with a high interest rate. As long as you are making the payments on time each month, it will raise your score. Your payment information is routinely reported to the credit bureau each month so your credit rating improves automatically. An improved credit score will help open the doors for you later to lower interest rates. So don't look at a high interest rate as a monster, look at is as an opportunity.

4

Eliminate unnecessary expenses. In order to make the high interest rate more affordable, you should eliminate any unnecessary expenses from your monthly budget. Trips to the day spa and nail salons are no longer important in comparison to owning a brand new car, huh? Suddenly you find it easy to cut out trips to the mall, concerts, clubbing and fine dining. All of these things you couldn't live without before are a lot less significant when they come between you and your mode of transportation.

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How to Add a Lien on the Car I'm Selling

Selling a car can be easier to do if you are willing to take payments instead of the whole amount up front. If you know the person buying your car, or you wish to sell the car quickly and don't necessarily need all of the money from the sale up front, this can be a win-win for both the buyer -- who may not have all of the money necessary for the car -- and the seller. In order to secure the loan, you can place a lien on the car so that if your buyer defaults, you can repossess it. Once the loan is paid off, you can release the lien.

Instructions

1

Write up a sales agreement. The agreement must include the amount of the monthly (or other period) payment as well as the interest rate, if any, and the balance due. Include any charges for late payments, as well as a right of repossession clause, and details stating under what conditions the car will be repossessed if payments are not made in a timely manner.

2

Sign the agreement in front of a notary public and have the document notarized. Both buyer and seller should be present and will need acceptable photo identification for this process. Acceptable forms of ID are usually a government issued ID, a state driver's license or ID card or a U.S. passport.

3

Go to your department of motor vehicles and ask to have a title issued in both the name of the buyer and the lien holder. As the seller you will need to fill out a form to apply for the lien. This form usually includes listing the amount of money the car is sold for.

4

Pay the lien-holder processing fee as required by your state.

5

Wait for the title in the mail. You will no longer be listed as the owner of the car. The buyer will be listed as the owner and you will be listed as the lien holder. The title, however, will not be transferred to anyone else until you release the lien.

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Car Repossession Questions

If you've never dealt with repossession, you may have several questions regarding the process, your rights and if you can get your car back after it's been taken. A repossession may prove a negative experience, but once you know which questions to ask, you should know how to handle the process better.

When Will My Car Be Repossessed?

Read your loan contract to determine when your vehicle can be repossessed. While most contracts state a missed payment as reason for repossession, many banks will not take your car back right away. Contact your bank as soon as you realize you can't make your payment as many banks have programs in place to help struggling borrowers. Avoiding your bank's phone calls is likely to result in repossession sooner, so try to work out a payment plan before your payments are past due.

Where Can My Car Be Taken From?

Your car can be taken from wherever you leave it as long as it accessible and no state laws are broken while taking the car. The repossession company who is hired to take your car may try to contact you first but will most likely come by your home where the vehicle is parked and load it onto a tow truck. Your car can also be taken from a parking lot, including your place of employment or even while you are inside a store shopping.

Will the Company Take My Belongings?

Your belongings will not be kept. Most repossession companies are required to take an inventory of your belongings or park your car in a locked and inaccessible yard. Once you notice your vehicle is gone, both the bank and your local police department can let you know which company has the car. Repossession companies notify the police once a vehicle is repossessed. You can make an appointment to get your belongings back.

Can I Get My Car Back?

You do have an opportunity to get your vehicle back once it has been repossessed. Bank guidelines differ for getting a car back after repossession has taken place, but you likely have an opportunity to pay the amount past due along with towing, locating or late fees. Some banks may require you to pay the loan balance in full. Otherwise, you can contact your bank to find out how much you can pay, where to make the payment and where to pick up the vehicle.

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Documents Needed When Selling a Used Car

Your car has served you well, but now it's time to get rid of it. Before you slap a "For Sale" sign in the window and hope for the best, make it more enticing to the prospective buyer by showing him the paperwork that shows how well the car was maintained. Make sure the transaction is legal by gathering all the documents your state's Department of Motor Vehicles (DMV) requires to transfer the title to the new owner.

Vehicle History

Vehicle history documents, such as maintenance receipts or recall records, are not mandatory to sell the car, but they can help prove the car was taken care of and may add value to the asking price. A buyer may feel less hesitant to purchase a used car that was regularly maintained. In many states, the latest smog certification is required for registration.

Title or "Pink Slip"

You must provide the buyer with the documents he needs to file for a transfer of title through the state's DMV. If you own the car free and clear, the title is in your name; if you have an existing loan, the title may be in the lender's name. In some states, the title is transferred by simply entering your signature on the back of the title, along with the sales price and date of sale. Some states require official title transfer paperwork to be filled out. Every state varies on title transfer requirements.

License Plates

When the new owner registers the vehicle, he will be given registration stickers for the license plate, so the original plates must be affixed to the car before the sale.

Vehicle Identification Number and Certified Odometer Reading

Many states require a certified statement of your car's odometer reading. This is to protect the owner against odometer roll-back fraud, which is prevalent in the used car industry. In some states, you also need to submit a certified statement of the car's VIN, or vehicle identification number.

Loan Statement

If you have a loan on your vehicle and have an outstanding balance on the loan, the prospective buyer must pay off the balance due before you receive anything that's left. The buyer needs your most recent auto loan statement or coupon book.

Bill of Sale

A bill of sale or receipt may be necessary to prove the sale. In any case, it's prudent for both parties to have a copy of the receipt that indicates sale date and price.

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How to Sell My Unpaid Car

Selling your car presents an opportunity to earn a profit that can be used toward a new vehicle or to add a cushion to your savings. No matter the reason you plan to sell, understanding the process of a private car sale can help you expedite the transaction once you find a buyer. If the car is not paid off, the transaction is similar, but you must go the extra step of closing the original loan with the lender so the buyer owns the car free and clear.

Instructions

1

Contact your lender to determine the correct procedure to close out your loan. Be sure to request a lien release so the title is cleared.

2

Select an escrow service if you are unable to pay the loan in full in advance of the sale using your own money. There are a variety of third-party services that allow you to close out your loan and transfer ownership in one transaction. Once the seller brings certified funds for the car, the payment is deposited into the escrow account. The bank takes the money from the escrow account to close the balance of your loan.

3

Transfer the title to the buyer once the loan is paid in full. It is essential to transfer the loan immediately to avoid personal liability for the vehicle, especially if the buyer does not yet have insurance.

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How to Finance Older Cars

Unless you are interested in purchasing a classic collector's car, it can be difficult to obtain financing for older vehicles. This stems primarily from the low value of older cars. While difficult, it is not impossible to get financing on an older vehicle. It is often easier to finance an older vehicle if you have a large down payment or if you can afford a short-term loan.

Instructions

1

Purchase the vehicle through a used car lot that offers financing. Car lots typically offer financing for any car on their lot. You may not get the best interest rate by financing in this manner, but it does allow you to drive the vehicle off the lot the day you want it.

2

Use a home equity line of credit, if you have a home with equity in it. If not, you can ask the bank for a personal loan using another asset as collateral, such as a boat or a retirement account.

3

Sign up with a peer-to-peer lending site, such as Lending Club or Prosper.com, to finance an older car. With one of these services, you submit to a credit check and list what you need the loan for. Individuals contribute money to your loan goal so that you can get the full amount needed.

4

Apply for a used car loan through a lender that does not mind financing older cars. Some examples are Rapid Car Loans, EZ Auto Finance and Road Loans.

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How to Sell a Used Car With a Lien

When you still owe a lender money on your car, the lender holds a lien, which means that the lender has the financial right to sell the car. When you want to sell the car yourself, you must get the lender to release the lien before you can transfer the title to the buyer. The only way to get a lender to release the lien is to pay off the rest of your loan. You can either do this before selling the car or you can use the buyer's purchase funds to pay off the loan and release the lien.

Instructions

Remove the Lien Before Selling

1

Call your lender to find out how much money you owe on the car.

2

Pay off the loan using your savings, credit card or money borrowed from a friend or family member. You can repay these funds as soon as you receive the money from the sale of your car.

3

Take out a personal loan or home equity loan if the amount of money you owe on the car is greater than the amount you expect to receive in its sale and you cannot afford to make up the difference. You will be able to repay much of the loan with the proceeds from the sale. Pay attention to the interest rate because you will need to make payments on the loan after the sale of the car. The length of time to full repayment depends on how big of a difference you have between the amount you owe and the car's value.

4

Ask your lender for written notification that it has released the lien on the vehicle. This is important because the title will not be updated to remove the lien listed on it before the sale and the buyer will need assurance that you own the car.

Complete Transaction with the Buyer

5

Arrange a time for your buyer to meet you at your lender's local branch to pay for the car and receive the title.

6

Call your lender and have an agent prepare the paperwork for the transaction so it will be ready when you arrive.

7

Repay the balance of your loan with the money from the buyer, along with your personal funds if the sale price was less than the loan balance. At this point, the lender will either give you the title immediately or provide you with documents releasing the lien that you can take or mail to the motor vehicles department to receive the new title for the buyer.

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How to Trade in a Car With a Loan

If your are ready for a new car, it is possible to trade in your existing car -- even if it still has a loan. The dealership will pay off the car loan when you trade in your car for a new one. The biggest roadblock will be if your current car is worth less as a trade in than the loan balance. This is called being "upside down" in your current car.

Instructions

1

Collect information on your current car loan, including the lender's name, your account number and the lender's phone number.

2

Select the new car you would like to buy at the dealership. While you are test driving the new car, have your current vehicle appraised for trade-in value.

3

Give the salesman the loan information on your car so he can include the payoff amount when the price and payment is prepared for dealer's offer to you on the new car.

4

Negotiate your car deal from the dealer's offer. Try to negotiate a lower price for the car you are buying, a better value for your trade-in and the best possible interest rate. The dealership will have room to negotiate in all of these areas, so keep asking for a better deal until they stop giving.

5

Verify that the figures on the final agreed-upon details are correct. The new car loan amount should be the new car price, plus taxes and fees, minus the trade-in value, minus your cash down payment, plus the balance of your current car loan.

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How to Buy a Car in Atlanta

Buying a car in Atlanta is relatively straightforward, but the Georgia Office of Consumer Affairs recommends exercising caution in your negotiations, especially with dealers. In 2009, the agency reported that it had received complaints about nine dealerships in Georgia failing to pay off the customer's trade-in after a sale. The people were duped out of thousands of dollars when they traded in cars they still owed money on. The dealers promised to pay off the loans, but never did, leaving the customer with two loans--one for the car they purchased and for the trade-in that was never paid off. The Atlanta Journal Constitution reported that some of the scams took place in or around Atlanta.

Instructions

1

Apply for a loan from your bank or credit union in Atlanta before you begin shopping for a car. This allows you to determine how much you can spend for a car. It also protects you from overpriced financing offered by dealers. The Georgia Office of Consumer Affairs reports that some dealerships encourage middle- and low-income buyers with questionable credit to take possession of the car "on the spot" while the credit details are worked out over the next day or two. Then, after the customer has become emotionally attached to the car the dealership reveals details of financing with an exorbitant interest rate.

2

Sell your car on your own in Atlanta rather than trade it in, if applicable. Selling the car yourself will allow you to avoid trade-in scams at dealerships. Advertise your car on free online classified sites in Atlanta and on social networking sites attracting people from Atlanta.

3

Get all the terms in writing, but be sure you really want the car before signing papers. The Georgia Office of Consumer Affairs reports there are few remedies for car buyer's remorse in Atlanta and the rest of the state. The agency reports that in essence, the car is yours once you sign the contract, even if you have never test-driven it or taken the keys.

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Do I Have to Pay the Difference of a Repossession?

Your car is only yours for the amount of time you make payments on it. If you stop paying your lender before your loan is fully paid off, the lender will repossess the car. Not only does this leave you with no transportation, it doesnt necessarily relieve you of your obligation to pay off the original auto loan.

How Repossession Works

Lending consumers large sums of money is a considerable risk for banks. Auto loan lenders, like mortgage lenders, reduce this risk by placing a lien on the vehicle the borrower wants to buy. The lien gives the lender an ownership claim on the car until the borrower pays it off. When this occurs, the lender releases its lien and the car belongs solely to the borrower.

The lenders lien gives it the right to repossess the car if you stop making payments. If you do not pay the amount you owe, plus any late fees, repossession fees and storage fees your lender charges, it will sell your car and put the proceeds toward your debt.

Repossession Deficiency

The lender will sell your repossessed car for the best price it can find, but that price may not be high enough to pay off both the remaining loan balance and any additional fees the lender levied against you during the repossession process. You are legally liable for the difference between the amount the lender recovered through the sale and the amount you owe.

Legal Consequences

Your lender will contact you and demand payment of any deficiency that remains after it sells your car. If you do not make payment arrangements, the lender has the right to file a lawsuit against you. If the lender wins its lawsuit, it receives a legal judgment from the court. State laws vary regarding the different judgment enforcement methods creditors can use following a lawsuit, but in general a lender can attach liens to other property you own, levy your bank account and garnish your wages.

Tax Implications

If the lender does not believe it can collect the debt from you, or cannot enforce its judgment, the Internal Revenue Service allows it to write off the unpaid deficiency as a bad debt. Doing so provides your lender with a tax deduction equal to the amount you owe.

While writing off the repossession deficiency as a tax loss benefits the lender financially, it could pose a problem for you. The IRS requires taxpayers to pay taxes on any debts they owed that were subsequently forgiven. Thus, if you leave your repossession deficiency unpaid, you could end up owing additional taxes.

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Does a Cosigner of a Car Loan Have to Be Contacted on a Defaulted Loan?

The biggest risk of co-signing a loan is the possibility of credit damages caused by late payments or repossession. As a co-signer, you're equally as responsible for the auto loan payments as the borrower. Depending on the way your loan account was set up when you initiated the loan, you might not be contacted if the borrower defaults on payments.

Read Your Paperwork

Your lending contract states the process and reasons for a repossession, although it may not describe the procedures for collection and contact. Most lenders, however, make repeated attempts to collect payment after a loan payment is late. To protect the lender, contracts usually state that the lender has the right to repossess a vehicle one to 10 days after non-payment. While most lenders wait to repossess the vehicle to provide time for payment, the terms are clearly stated in the loan contract, which both you and the co-signer agreed to by signing the contract.

Arrange Contact with Your Lender

To prevent issues with non-payment, contact the lender and ask to receive a copy of the loan statement each month. When you signed the original loan contract, the person you co-signed for likely became the loans primary borrower, so her address and contact information were likely recorded as the loan's contact information. It might also be difficult talking to the lender about the account unless the borrower authorizes the lender to talk to you. Avoid these issues by discussing your contact requests before you sign the loan contract. This way, your information is added to the account properly and you'll receive statements reflecting the balance and payments on the loan account.

Online Access and Payment Collection

Many lenders provide an online banking service, which allows a borrower to review a loan account balance, the payoff amount and late fees caused by late payments. Payments are often updated the same day, so you're likely to catch payment issues quickly if you have access to the borrowers loan account. Most lenders require both borrowers to open a joint account, so obtaining online access to your account shouldn't be difficult. As a term of co-signing the auto loan, you might request that the borrower pay you instead of the lender. This way, you can ensure timely payments and protect your credit.

What to do After Default

If you find out the borrower isn't paying the loan balance, you'll have to pay the past due amount to protect your credit rating. Payments more than 30 days late are reported on your credit report. If you find out about the loan default nearing or close to repossession, refinance the vehicle into your own name to protect your credit. You're also liable to pay the lender for the amount due on the loan after the repossession. If the car has already been repossessed, you'll have to pay the balance due or the lender can pursue legal action against you and the borrower.

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Tips for Buying a Car With No Credit History

Having a vehicle or reliable transportation is a necessity for adults with responsibilities. However, if you don't have good credit or a credit history, acquiring a car loan can prove challenging. Auto lenders use your three-digit credit score to assess your likelihood of repaying the car loan. And even if you have the best intentions of repaying the loan, having no credit history makes a lender nervous. Still, there are ways to acquire a car loan with no credit history.

Show Steady Employment Or Income

A steady job or a steady source of income can compensate for no credit history. Being in a position to realistically afford a car payment is imperative, and auto lenders closely evaluate a borrower's financial circumstances before approving his request for a loan. Look for employment and stick with the same employer for a few months before applying for a loan. Be sure to keep copies of your paycheck stubs or tax returns to provide proof of income.

Find The Right Auto Dealer

Most cities feature at least one dealership that advertises, "buy here, pay here." These dealerships help people with no credit history and bad credit. Obtaining an auto loan is a quick and simple way to build or restore a credit history. And since the automobile secures the loan or serves as collateral, these lenders are more apt to take a chance on a person with no credit history. Unfortunately, these dealers may require a down payment and charge a higher interest rate.

Bring a Co-Signer

Since individuals with a good credit history are more likely to repay an auto loan, using someone with a good credit history to co-sign your auto loan can help you secure a loan with a reasonable interest rate. Finding a co-signer is tricky because he becomes responsible for the debt if you default. Demonstrating a measure of responsibility, such as maintaining a bank account in good standing or paying a cell phone or utility bill on time, can put family member of friend at ease so that they may willingly co-sign your vehicle loan.

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Can I Buy a Car From a Private Seller With a Car Loan?

It is possible to buy a car from a private seller using a car loan. The primary problem with buying a car from a private party is that the seller must wait for the buyer to acquire the money from the bank. However, by being prepared to make the purchase, a buyer can significantly reduce the time needed to get the money, which will increase the odds of a successful purchase.

Pre-Approval

Before going car shopping, a consumer should contact a number of banks, credit unions or other lenders to determine which will offer the best loan terms. Borrowers can check loan terms from online and local lenders. Once the buyer determines which lender offers the best deal, he should complete the application process for pre-approval of the auto loan. By having a pre-approval before looking for a car, the buyer will be able to close the deal with the seller more quickly.

Completing the Loan

Once the buyer finds a car and settles on a price with the seller, the buyer will need to gather information on the car for the lender to complete the loan. Information will vary depending on the lender, but the make, model, mileage and Vehicle Identification Number are common requests. The bank will then use the information on the car to determine the specific terms of the loan. Banks may look into the car's background for collision and other damage reports before processing the loan.

Title Issues

Many sellers may not own the car outright. This means that a bank or other finance company holds the title. In this case, buyers should ask the seller to provide the name of the title's holder and get a payoff amount from her lender. The bank writing the loan for the car purchase can then pay the other lender directly and issue a check for the difference to the seller. The lender holding the title will then send the title to the new lender or buyer.

Other Considerations

A buyer using a loan to buy a car from a private party should expect to pay slightly higher interest rates than those buying a car from a dealer. Lenders see writing loans for older cars and those with higher mileage as a greater risk. This means that the loans for these cars may be shorter in duration and have a higher interest rate. Lenders may also have more strict lending guidelines for private party car loans. Buyers should review a copy of their credit report before applying to make certain of the accuracy of the information on the report.

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How to Keep a Car From Being Repossessed With Partial Car Payments

If you've run into hard times and are having trouble making your car payments, talk to your lender immediately to work out a payment plan. Many lenders would prefer to work with you and may even offer you options to permanently lower your car payment -- or at least for the time being. Don't wait until your car loan is behind before your reach out for help. Learn how you can make partial car payments if your bank allows it.

Instructions

1

Figure out your budget and how much you can spend on your car payment. Contact your bank to discuss your payment amount and how long you'll need to make partial payments. Figure out how much you have to spend towards your car payment and the dates that you can make each payment, as well the date that you plan to catch up.

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Call your lender and have your account number handy to give to the bank representative. Or, stop into your local branch to talk to a bank representative.

3

Tell the representative that you are having trouble making your car payment. Answer any questions the representative asks you and tell him your budget and and the dates you'll be able to pay. Ask if you are able to lengthen your loan to lower payments permanently if you believe your situation will be long term.

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Discuss any options offered to you. Your bank may be able to defer your car payment if you have a good payment history, allowing you to miss several payments without being considered late. The representative may also offer to lengthen your loan or set up a payment arrangement that works for your budget and time frame.

5

Sign any paperwork the bank requires. If you extend your loan, you'll have to sign an entirely new loan contract. If you agree to defer payments or make partial payments for a period of time, sign the bank's agreement to do so.

6

Make all payments agreed upon by your bank to avoid repossession.

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How to Lower Car Interest Rates

Most people want to lower their monthly expenses and increase their disposable income. If you have a car loan, reducing your interest rate can result in a lower monthly payment. Hence, you'll have cash to put into savings or pay down debts. Some car buyers obtain a higher rate due to no credit history or poor credit. However, there are ways to obtain a reduced rate.

Instructions

1

Obtain a copy of your credit report. Low interest rates are reserved for people with a good credit history. Request a copy of your credit report from one of the three major bureaus, or order an online copy from Annual Credit Report.

2

Improve your FICO score. Individuals with acceptable credit are candidates for a low interest rate. If you have a low score, take steps to boost your score. Pay your bills on time, reduce your debts and limit credit inquiries. Paying off judgment and collection accounts can also raise a low score.

3

Refinance your auto loan. To lower your car interest rate, contact your current auto lender (or select a new lender), and inquire about a refinance. A refinance creates a new auto loan, in which the new loan pays off the old one.

4

Compare auto loan rates. Request auto loan quotes from at least three lenders. Comparing quotes is the only way to obtain the lowest rate and best loan term. Quotes feature an estimated interest rate, loan term and monthly payment.

5

Choose the best auto loan. After reviewing the auto lender quotes, pick the quote that features the lowest car interest rate. Make an appointment with the lender to sign the new loan documents.

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How Does a Person With a Poor Credit Score Get an Auto Loan?

Having a poor credit history doesn't mean you have to rely on public transportation or drive around in a much older car. While big dealerships may not approve your application with poor credit, there are tips to help you qualify for an auto loan.

Benefits of a Subprime Lender

Buying a car from a dealership that specializes in bad credit auto loans, or using a lender that issues loans to borrowers with bad credit, can help you obtain an auto loan. Visit dealers and finance companies that advertise "fresh start" or bad credit loans.

Importance of a Co-signer

Co-signers are valuable when applying for an auto loan with bad credit. The person chosen to co-sign your agreement must have a good credit rating and income to pay the car payment if you're unable to meet the obligation.

Solution

The automobile serves as collateral for vehicle loans. Thus some lenders are more prepared to approve an applicant with poor credit. As a trade-off, bad credit applicants usually must agree to a higher interest rate on the loan.

Warning

Shopping around and comparing auto loan finance rates is helpful because dealerships may offer financing with higher interest rates than you could obtain on your own. In addition, some subprime lenders charge exorbitant rates when an applicant has a bad credit history. Checking with your local bank or credit union beforehand can help you avoid predatory practices.

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Tips on Buying a Leased Car

Purchasing your leased vehicle instead of returning it may prove financially advantageous, as you know the vehicle's maintenance and repair history. Lack of such information can be a problem with used car purchases. Also, if you went over your mileage allowance, you can save on lease-end fees by purchasing the car instead of returning it.

Call Your Bank

Call your bank to find out your lease purchase amount. The bank can also go over any fees associated with buying your car. Dealers can also do this for you and can arrange your financing so you don't have to do it yourself. But some banks allow dealers to mark up the lease purchase amount for profit, so make sure you call the bank first. In addition, dealers profit from handling a customer's financing, as many banks allow the dealer to mark up the loan interest rate. Deal with the bank directly for these reasons.

Shop Rates

You do not have to finance your vehicle through the bank that originally leased to you. While leasing banks offer competitive rates for new cars and leasing, their used car rates are often a bit higher than those offered by other banks. You can finance the vehicle through a local bank, so check rates in your area, including credit unions. A bank where you have an account may be able to offer you a rate discount for being a customer. Call different lenders or visit their websites to determine rate differences.

Check Values

Your lease purchase price was determined at the time you leased your vehicle. It was based on expected depreciation and future market values, which may have been wrongly determined. Check vehicle values at Edmunds.com or the Kelley Blue Book website to ensure you're not purchasing your vehicle for too much money. Doing so can cause difficulty in obtaining a loan if you're trying to borrow more than the vehicle's value. Or, you may find it difficult to trade out of the car in the future because of negative equity.

Trade-In Option

If you are buying your lease to avoid lease-end fees or over-mileage fees, you also have the option of trading the car into a dealership. A dealer will purchase the car from the leasing bank and apply any negative equity to your new purchase. You will not incur over-mileage or other penalty fees this way. Depending on your state, your trade may be tax deductible. In this case, the trade value is deducted from a new car's purchase price before tax is applied. This, too, can save you money.

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Credit to Buy a Car

Cars are an expensive purchase that people finance when they cannot afford to pay the total cost all at once. Vehicle loans are secured by the car itself, since the lender can repossess it for nonpayment and sell it to offset the owed balance, but you still need a decent credit rating to qualify for financing.

Credit Requirements

You need a solid credit history and good credit score to finance your car purchase at a reasonable interest rate. You can still get credit to buy a vehicle with some past problems, but your lender will charge a higher interest rate. The Cars Direct automotive website advises that a credit score of 740 qualifies you for the best terms, and financing at higher rates is available with scores down through the high 600s. A high score requires a long string of on-time payments on all your existing accounts and low credit card balances.

Credit Assessment

Assess your credit before buying a car by reviewing your Experian, Equiax and TransUnion credit reports, the Lending Tree loan site advises. Banks, credit unions and finance companies use at least one, and sometimes all three, of these reports or check your credit score, which comes from the report data. Federal law entitles you to free reports through AnnualCreditReport.com annually. The reports let you see whether your credit is in good shape and whether your reports have errors that could make it hard to get financing. Dispute any mistakes through the credit bureaus, which have online forms for complaints, before seeking a car loan. You can also check your credit score, but the bureaus are allowed to charge you for it.

Credit Sources

Many dealerships have finance departments that search for loans when you purchase a car from them, but their rates are often higher than what you could find on your own because they make money from marking up the interest rate, according to Philip Reed of the Edmunds automotive website, For example, the dealer might find that your credit rating qualifies you for a loan at 5 percent, but the finance person tells you that you must pay 7 percent and keeps the rest as profit. Get preapproved through your credit union, bank or an online lender before car shopping to avoid this problem.

Alternative

You can get credit to buy a car with a co-signer if you do not qualify on your own, because lenders grant the financing on the strength of the other person's credit rating. Your co-signer must agree to be fully responsible for the bill if you ever default because that person is guaranteeing the debt. You ruin the other person's credit, as well as adding more negative entries to your own credit reports, if you stop paying for the car.

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How Long Does it Take to Build Credit With Car Payments?

Car loans are secured loans because they have property backing their repayment. The Federal Trade Commission (FTC) explains that banks and financial companies repossess cars if the buyers cease paying. People with bad credit can often get vehicle loans because of the collateral. Lenders charge higher interest on subprime accounts, which raises their profits. Eventually such borrowers build their credit up again by handling the car loans properly.

Time Frame

FICO, the biggest credit score provider, explains that every on-time loan payment helps your score and looks good on your credit reports. Banks and finance companies report loan details such as original balance, amount owed and payment dates immediately. A good car loan history, accompanied by good performance with other bills, builds positive credit within one to two years, although it does not completely offset prior damage.

Benefits

A good credit history means lenders, credit card issuers and others are more willing to open accounts for a person, which provides more financial flexibility. People who make their car payments on time and handle other bills in the same way can get credit cards, loans and even mortgages. Good records qualify them for lower interest rates, according to FICO.

Alternative

Sometimes people with extremely bad credit cannot qualify for a car loans to build it back up. They may ask a family member with excellent credit to co-sign for the vehicle. The loan is granted on the strength of the co-signer's records, and that person is equally responsible for repayment, according to Bankrate financial writer Pat Curry. The co-signer must either pay for the car or face ruined credit if the borrower defaults.

Considerations

People with bad credit who use a car loan to rebuild it are often forced to accept bad financing terms. Subprime lenders command high interest rates and tack fees onto the transaction. Warren Clarke, an Edmunds automotive site editor, advises refinancing the loan as soon as credit records are sufficiently improved. He states this is often possible within two years of good performance on the existing loan and other financial obligations.

Warning

Car loans can eventually harm credit if they last too long. Some loans run 60 months or even more. The Cars.com vehicle buying website warns that many people wind up owing more than their vehicles are worth when they sign up for long-term financing. They must pay off this difference or roll it into a new loan when they purchase a new vehicle, which means higher payments that could be difficult to handle. Late or missed payments on the new loan bring down the credit score.

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How to Beat a Ruthless Lien Holder

Of course, everyone intends to pay their bills and do so on time. But sometimes financial hardship gets in the way. What do you do when you need just a little more time to pay your bills and a lien holder is pressing down on you? You need your car. Desperate times call for desperate measures. Here are a handful of options available to you.

Instructions

1

Contact your lender. Although they are not obligated to do so, the lender may agree to delayed or reduced payments for a short period of time to avoid the expense and difficulty of repossession.

2

Trading the car back for a less expensive option can be a solution to your problems. If you are lucky, you can discharge your debt or at least mitigate it considerably, while not losing transportation.

3

Park the car in an enclosed structure, like a garage, at all times. This is a less ethical option, but the lien holder cannot enter an enclosed structure to repossess the car, so if you can keep it in an enclosed spot, you can buy yourself a little more time to pay what you owe.

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Can Car Sales Tax Be Included in Financing?

Car sales tax can normally be included in the total loan amount taken when buying a new or used car. This is helpful for consumers who prefer to put no money down when financing a vehicle. However, a consumer's credit history, the total amount financed and even the type of vehicle can impact the lender's decision when it comes to financing car sales tax.

Credit History

The most important factor when it comes to financing sales tax on a new or used car purchase is personal credit history. Consumers with poor credit histories and those financing a large amount of negative equity from a previous vehicle may need to put their sales tax down on the purchase of a vehicle. In many cases, a down payment even larger than the sales tax amount is required. For some car buyers, it can even be impossible to secure financing with a down payment of any amount.

Total Amount Financed

The loan-to-value rating of a car loan has a large bearing on whether or not sales tax can be financed. For example, if a car is valued at $15,000 but, because of negative equity being rolled over from your previous auto loan, you look to finance $19,000, your loan-to-value would equal 127 percent, meaning you are looking to borrow 127 percent the value of the collateral. Few lenders consider advancing such a large amount, because it means you will be a very poor equity position and have higher payments, which renders your loan a higher risk.

Type of Vehicle Financed

Some vehicles have very low book values for a range of reasons. For example, a Pontiac would have a lower book value than a Chevrolet for the simple fact that the Pontiac brand is no longer in production, so the strength of the mark is diminished. Therefore, a Pontiac G6 may have a loan value of $10,000 while a comparable Chevrolet model has a value of $12,000. This means that for like vehicles priced at $13,000, the loan-to-value amounts are vastly different. It could be difficult to secure financing on the Pontiac without putting sales tax down, while securing a full-value loan for the Chevrolet would be easier.

Making the Right Financial Decision

Electing to finance sales tax in your new or used car purchase means that you must pay interest on the sales tax amount. In the grand scheme of things, financing sales tax could raise your payment significantly, and the total cost of borrowing money would be higher because of the interest paid on sales tax. Paying your tax upfront makes the most financial sense, unless a 0 percent APR offer is currently available from the manufacturer. If you can borrow money for the taxes without paying interest on the loan it becomes a moot point.

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