The Process to Sell Your Own Vehicle With a Lien

If you want to sell your vehicle with a lien on it, you must work with your buyer and your lender to do so. Working with both allows you to receive the lien release necessary to transfer ownership in most states while you keep the buyer apprised of the time frame of the transfer.

Significance of the Lien Release

You must pay off your loan to obtain a lien release, and in some states, the lender holds the title until the loan is paid. Your title lists your lender as the lien holder, which is shown on the front of the title. Before selling your car, call your bank to discuss your payoff amount, which is the amount you'll usually have to pay before you can transfer ownership. The lien release is an official bank document that states the release of interest in the vehicle. You can sell your car for more and keep the profit, but if your payoff is less than you can sell your car for, you'll have to come up with the difference. Most states do not allow you to transfer vehicle ownership while a lien is present.

Time Frame

After you find out your payoff amount, ask about the time frame to obtain a lien release from your bank after payment is made. This way, you can better inform your buyer of the process and time frame to completely transfer ownership. Find out the quickest way to obtain the release and if you can arrange for the buyer to make payment if the bank is not local. If your state holds titles (some give the title to the lien holder instead of the borrower), find out how long you can expect to wait before getting it. This information should be relayed to the buyer once you have it.

Buyers

Deal with buyers just as you would if you had no lien on your vehicle. Once you have an interested buyer, let her know that you have a loan on your vehicle that you intend to pay off with the sale amount. This is not entirely uncommon, but the buyer should know he cannot purchase the vehicle that day and title it the next. Depending on the cost of your vehicle, you may find that the buyer has to complete loan paperwork to purchase your vehicle, which will take some time itself. If your buyer finances through your lender, the bank can take care of the payoff and titling with the buyer.

Payment

Pay the loan off physically at the bank, if possible. If the lender is local, you and your buyer should arrive to the bank together to pay off the loan. Doing so ensures buyer's peace of mind, as he'll know that the sale money is going towards the pay off and he can obtain the lien release and title that day, in most cases. If your lender is not local, arrange for payment to be made to the bank by the buyer, not by you. Ask your lender how to arrange for payment to be made by another party. If you owe money on top of the sale price, pay it before the buyer makes his payment and allow your bank to confirm that the loan has been satisfied (the bank can put a note in the system to discuss information with a named party).

Considerations

In some states, you can transfer ownership of a vehicle while a lien holder is listed on the title. However, most knowledgeable buyers prefer to have a lien release before titling, as the vehicle can be repossessed for your non-payment. In such states, you can sign the title over to the buyer so the vehicle can be titled and registered quickly. You can mail the lien release to the buyer as soon as you receive it. Call your state motor vehicle office to ask if you can transfer ownership with a lien holder listed on the title so you are prepared to give your buyer the option.

Read More

How to Sell a Car to a Private Party Through an Installment Plan

Whether they want to replace an automobile with a newer model or they are trying to ease the financial burden of monthly payments, most adults need to sell a car from time to time. You can opt to sell your car through a dealership or privately. Selling your car privately takes longer, but in most cases you will receive more money for your vehicle. Some buyers present a check for the full amount, while others might ask to set up a monthly payment arrangement. Before accepting a payment plan, familiarize yourself with the process.

Instructions

1

Find the car's market value. Research Kelley Blue Book or another online automobile appraisal resource to learn the market value of your automobile. These websites usually include information on trade-in values and private party values.

2

Advertise the vehicle. Run an ad in your local newspaper and include information on your automobile to attract buyers. The vehicle's mileage, condition, make and price should all be included. You should also place a For Sale sign in the back window of the car and include your contact number.

3

Clean the car. Wash the car's exterior and have the interior detailed to improve the vehicle's appearance.

4

Draft a contract. Once you find a buyer, write a contract detailing the sale price for the automobile and specific information regarding the amount and length of the monthly payments. Include a clause that states your right to repossess the vehicle if the buyer defaults on the agreement. Make a copy of the agreement and present it to the buyer.

5

Complete a bill of sale. After receiving all installment payments for the vehicle, complete the bill of sale located on the back of the vehicle's title. Fill in the blanks and write "sold as-is" on the document. Make a copy for yourself and present the buyer with the original. Ownership transfers once the buyer presents the title/bill of sale to your state's Department of Motor Vehicles.

6

Cancel insurance and registration. Call your insurance company to have the vehicle taken off your insurance, and contact your DMV to find out how you should cancel the registration.

Read More

Can You Hide Your Car If it Is Going to Be Repossessed?

The phrase "you can run but you can't hide," meaning that you can try to escape from your problems but eventually they'll catch up with you, applies to hiding a car about to be repossessed. Eventually, the repo man is going to find your car. Repo men use every trick in the book, including staking out your house, following you and grabbing the car when you park.

Repossession

If you stop making your car payments or are consistently late, finance companies, banks or credit unions are going to send someone out to find and take back the car. If your car is repossessed, you have 15 days to catch up with your payments or pay the loan in full, plus any repossession fees, and redeem the car. Some lenders give you 25 days, according to Edmunds.com. If you can't come up with the money, the lender sells your car at auction. The lender deducts the amount the car sells for to determine what you owe. Chances are you still owe the bank, even after the car sells at auction, because you also pay for repossession fees, auction fees and interest.

Hiding a Car

Many people try to hide their cars to keep them from being repossessed. Repo men, also called recovery agents, perform a job called "skip tracing," which is looking for the car using online databases. The agent gets all of your information from your credit application, so he knows where to find your car. The car is only at the car owner's residence about half the time, according to Edmunds.com. If you move the car, besides searching online, the repo agent calls or visits all the places you could be. Some recovery agents install infrared cameras that read license plates on parked cars. The cameras can read 300 plates an hour, according to Car and Driver. The recovery agents cruise around the areas your car could be. When the camera reads an "assigned" license plate, the computer sounds an alarm, and a few minutes later, your car is gone.

Repossession Costs

If the recovery agent has to conduct an active search for your car, you pay for the cost. The more difficult you make it for the agent, the more it's going to cost you in the end. Repo men bill for the time they have to spend looking for your car, and that cost is added to what you owe on the car. If you are behind in your payments, the best thing you can do is to notify your lender. You might be able to work out a modified payment plan. If not, your car is a voluntary repossession, which saves you the repossession fees. Your credit report will probably read that you had a voluntary repossession, which might look slightly better to future lenders than having a repossession listed on your report.

Added Accessories

If there is any chance that you won't be able to afford your car, do not waste your money on fancy rims or speakers. Once you add those to the car and the car is repossessed, the lender keeps all your additions. If you did buy accessories, take them off and replace them with the original equipment. All you are entitled to get back is your personal property, including baby car seats. But sometimes your personal property can "vanish," according to Edmunds.com.

Read More

Money Saving Tips for Buying a Car

Buying a car begins with a major decision. Think about whether you want to finance part of the cost of the new or used vehicle or to pay the total price in cash. The kinds of incentives a dealer offers could be tied to specific types of financing. For example, a dealer might offer 0 percent interest financing for 5 years if you use its own finance company, such as Nissan Motor Acceptance Corporation or Ford Motor Credit. When you've got excellent credit, may persuade you to save some cash and finance at least part of the purchase.

Negotiate

You don't want to negotiate a certain amount off the dealer's published full price. You want to negotiate up from the dealer's actual cost. Some dealers advertise in print or broadcast markets that they will show you their invoice. Other dealers might be willing to share it if you ask. You want to go up from this baseline to ensure you're getting a good deal. Sometimes belonging to a bank or credit union automatically entitles you to a special offer (such as $500 over invoice). Ask your financial institution before shopping for a car with which dealers they have special financing agreements.

Used Cars

Consider buying a used car instead of a new car. A car with low mileage can give you almost the same amount of mileage and save lots on retail price markups. Road and Travel Magazine's Kyle Busch notes, "A 2- to 4-year-old used vehicle can be purchased at a savings of 25 to 50 percent as compared to its cost when new." As a final option, you can trade an old vehicle in against a used car purchase to slice another thousand or two off the total sales price.

Beware of Obvious Extras

Before sitting down and reading paperwork for a specific vehicle, compare the types of cars in the showroom and in the dealer parking lot. On the vehicle summary posted on the windshield or window, find any obvious upgrades the dealer added after the factory, such as custom tinting, leather interiors or pin-striping. If you don't need these upgrades, you can save a lot of money. Ask your salesperson to sell you a model without these upgrades even if it must be ordered in the color you want from the factory. Pay the base price plus any features you must have.

Beware Hidden Fees

When shopping for a car, read all parts of the sale contract before you sign. That is something to ask to look at even before a salesperson tries to get you to sign other forms. Look for hidden fees, such as a dealer's administrative costs. If the dealer really wants to make a sale, like if you're smart and you shop at the end of the month, the salesperson can get permission from a sales manager to remove fees that aren't required by state or federal laws.

Read More

Do I Get Any Cash Back if I Refinance My Car?

When you refinance your car loan you do not receive any cash back if you take out a straight refinance loan. Lenders do allow car owners to take cash-out refinance loans, however, and then you would receive money back. You can either use a cash-out refinance loan to pay off an old loan or use it to extract cash from a car you own free and clear.

Loan-to-Value

Secured loans, such as automobile loans, work on the basis that if you default on loan payments, the lender assumes control of the collateral used to secure the loan. For a lender to fully secure a loan, the amount you borrow cannot exceed the value of the collateral. Some lenders write purchase car loans equal to 125 percent of a car's value, but cash-out refinance loans are typically capped at between 80 and 100 percent of a car's value.

Paying Off Your Loan

When you refinance a car loan, your new lender contacts your old lender and requests a pay-off quote. You can take the difference between the car's value and the pay-off amount as cash back. Most lenders have processing fees for car loans, however, and in many states you also have to pay document tax whenever you take out a loan. You can choose to roll these costs into the loan or pay the costs as an out-of-pocket expense. Ultimately, you are left with the same amount of cash.

Restrictions

Cars and other vehicles lose value due to having limited lifespans. Generally, lenders only finance cars that are less than 7 years old. Additionally, term times offered on cars are progressively shorter for old vehicles. The term time impacts your payment because shorter term times mean larger monthly payments. When you take out a car loan, the bank examines the total amount of your monthly debt payments relative to your total monthly income. Generally, your debt-to-income ratio cannot exceed 50 percent. Therefore, people who take out loans on older cars often have problems qualifying for large amounts because short term times mean payments would exceed DTI maximums.

Other Considerations

When you take out a cash-out refinance loan on a car, you risk losing that car if you ever fall behind on your loan payments. The money you can borrow on cash-out car loans are similar to the sums available on unsecured products, such as credit cards. If you have a credit card and cannot make your payments, you do not have to worry about losing your car. Therefore many people prefer not to tie loans to their cars. Secured loans such as cars, however, have fixed low rates, whereas credit cards have variable rates that are often very high.

Read More

How to Reduce Car Payments

The benefits are many when you reduce your car payments. Financial problems can strain relationships, affect your level of concentration at work, and even lead to health problems. Your quality of life also diminishes if you live in a constant state of panic and worry about losing your vehicle. Fortunately, manageable car payments can reduce the stress level in your life and improve your financial situation. What's even better, you don't need professional help to lower your auto payments. You can do it yourself.

Instructions

1

Refinance your car. A lower annual percentage rate (APR) can significantly reduce your monthly car payments. This is particularly true if you currently have a high APR and your credit has improved since your car purchase. Look for a car loan with an APR of at least 1 percent lower than your current loan.

2

Trade your car for a less expensive one--either an older vehicle or a less expensive model. For example, an automobile that costs one-fourth less will reduce your car payments by one-fourth. If your current monthly payments are $400, you will pay $300.

3

Sell your current automobile. Pay off the loan, and lease another vehicle. One benefit of car leasing is that you can often find a newer, more expensive auto and still have lower monthly payments.

4

Renegotiate the term of your auto's purchase agreement. Although not advantageous, this option will reduce your monthly car payments. Once your financial situation improves, you can make higher payments to pay off the loan.

5

Eliminate your car payments. Sell your car and buy an old beater for about $1,000 or less. You can upgrade once your situation improves. You may have to put up with negative comments from family members, friends or co-workers. However, your stress level will diminish, and you'll be able to focus on the more important things in your life.

Read More

How to Sell a Car in VA

In Virginia, selling a car is a fairly painless three-step process --- sign, transfer and inform. The buyer of the car is the party who has the most work to do in getting it registered in his name. The Virginia Department of Motor Vehicles (DMV) office has a clear selling procedure for citizens to follow to ensure a smooth transaction.

Instructions

1

Sign the back of your car title. Under Section A, enter your personal signature as well as the name and contact information of the buyer, who will become the new registrant. Enter the agreed upon selling price and odometer reading.

2

Ask the buyer to sign and confirm his information in the required area of the title in Section A. Hand it over to him along with the car after payment has been made.

3

Remove your license plates from the car before the buyer drives away. Mail back or drop off your plates to the nearest Virginia DMV location unless you plan to use the plates for another car to be registered in your name.

4

Call the Virginia DMV office to inform them that you've sold your car. Provide the car VIN, title number and date that you transferred the car to the other party. You can also send notification online. Call your insurance company to cancel your policy for the car, since it is no longer in your possession.

Read More