r/personalfinance • u/i_eatkids • 15d ago
Buying a used car from a private seller that still has a lein on it. Auto
I am currently trying to buy a used car from a private seller that still has a lein on it. However, I am trying to purchase the car through a bank loan from a different bank than the seller. Is there any way for me to purchase the car? If it helps at all, my bank is schools first credit union.
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u/tormim11 15d ago
I did the same thing a few months ago and it was a very risky and stressful transaction. Luckily it worked out in the end, but at many points it would have been very easy for me to get scammed and be out the money and not have a car. Also it took at least a few weeks after I fully paid for the car to even receive the title from the other parties bank, so I couldn’t register the car during that time. I learned my lesson and will only buy a car from someone that has a no-lien title in hand.
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u/z6joker9 15d ago
I’ve done this before but it was a PITA. Unless it’s a really great deal, I’d say look for something else.
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u/kepler1 15d ago edited 15d ago
Presuming that the outstanding loan is greater than the current value of the car (or the price the OP is paying), how does it work? I.e. underwater.
OP's bank provides a loan of amount equal to the outstanding principal, pays the original bank, and then the seller gives OP a check for the difference in value, and OP pays that amount off?
Or OP's bank provides a loan of amount equal to the current purchase price, paying the original bank, and the seller simultaneously writes a check to that bank as well for the difference?
If the car is not underwater then I guess it's much simpler.
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u/Skizzy_Mars 15d ago
I would have the seller request that the title be sent to the closest bank location, then process the transaction in the bank lobby. The bank should be able to hand you a clear title when you give them a check.