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Discussion Starter · #1 ·
I got 36 months more to go, what's the best (or proper) way to sell a car with payment pending? if he decides to pay cash, shall we go to the bank together and process the remainder balance so the bank can give him the pinkslip whe balance is paid off?

if anyone of you familiar with this type of transaction please let me know.

thanks.
 

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Re: how to sell a car that still carries payments. (stevectsai)

When I sold a vehicle with lien payoff, the buyer paid off the lender to get the title (after I contacted the lender of course), and any difference was cut directly to me.
 

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when i sold my T5, he paid cash (personal check). i waited for it to clear, paid the bank, they mailed the title, and i overnighted it to him.
 

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i sold a car that I still owed on. I took the money, gave the buyer the car, and part of the written contract/sale stated that I had X number of days to forward the title to him upon receiving it from the bank. whcih i did.

most people understand if you don't own the car outright. the most direct way to do it is to go into the bank together and then the person can see the docs and have some peace of mind, but even then they may not get the pink slip. i asked my bank about that option and they told me that the pink slips were kept on file somewhere and they don't give them to you at the bank anywya..they mail them to you. maybe you could be int eh bank with the buyer and designate the buyer's address as the "send to" address....

what are you buying if you sell your R?
 

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Re: how to sell a car that still carries payments. (stevectsai)

From my experiense, the easiest way is to pay off your car, get the title from the bank through which you finance (takes couple of weeks) and then collect the payment in full (cash/cerified check) from your buyer if he is willing to wait that long. Usualy it works well if you sell to someone in the family, or one you trust and trusts you.

I'd pay off first and start selling after...
 

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Re: how to sell a car that still carries payments. (stevectsai)

Quote, originally posted by stevectsai »
I got 36 months more to go, what's the best (or proper) way to sell a car with payment pending? if he decides to pay cash, shall we go to the bank together and process the remainder balance so the bank can give him the pinkslip whe balance is paid off?

if anyone of you familiar with this type of transaction please let me know.

thanks.
That's as good as any but ask your bank where the title is.
Most of the time it's not at a branch and depending on who the lender is it can take from 6 hours to 3 weeks to get the title.
 

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Re: how to sell a car that still carries payments. (igvolvo)

Quote, originally posted by igvolvo »
From my experiense, the easiest way is to pay off your car, get the title from the bank through which you finance (takes couple of weeks) and then collect the payment in full (cash/cerified check) from your buyer if he is willing to wait that long. Usualy it works well if you sell to someone in the family, or one you trust and trusts you.

I'd pay off first and start selling after...

This is what I did on my S40, but it was easy as I only had $2,500 left to pay on it.

If you're selling a car worth $38k and you owe $25k on it, this might be pushing the limit of your cash reserves.

I like the idea of a contract which says you have X number of days to get the title to the seller. I would make sure that the bank understands this is going on first, though, and that there are no other liens on the car.
 

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Re: how to sell a car that still carries payments. (needsdecaf)

Quote, originally posted by needsdecaf »

I like the idea of a contract which says you have X number of days to get the title to the seller. I would make sure that the bank understands this is going on first, though, and that there are no other liens on the car.
Agree, but if I was a byer, I'd not sleep well till I get the title. The fact that I have the car in my posession (I can't even drive it) doesn't mean much if you don't have a title. Paying someone $20K+ in exchange for a contract. What if...?
Sometimes "your bank" is across the country. so you can't "walk in" and do business in person...
Probably sending check to the bank, so they will keep payoff amount and cut seller the check for the difference (assuming there's one
) is the most acceptable way for byer and seller.
 

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Re: how to sell a car that still carries payments. (MagoonR)

Quote, originally posted by MagoonR »
When I sold a vehicle with lien payoff, the buyer paid off the lender to get the title (after I contacted the lender of course), and any difference was cut directly to me.

sounds like what I did--we went to the bank, the buyer had a check for our agreed upon sales price to be deposited in my bank account, the bank then gave me the residual. Don't recall how/when the buyer got the title
 

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Re: how to sell a car that still carries payments. (stevectsai)

You the seller, contact your lender and request a pay off statement that is good for as long as possible (normally 7-10 days) and tell the bank Joe Buyer is authorized to call and verify pay off info.

Have Joe buyer get 2 cashiers checks. 1 for lender and 1 for the difference (I hope) that you get. In both of your presences have the pay off and bill of sale FedXed to the lender with instructions for buyer to receive the title.

I have done it this way on 3 cars I have purchased with no snafus.

Good luck,
Jim
 

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Re: how to sell a car that still carries payments. (kenschel)

I sold a leased M3 convertible with a few payments remaining to a gentleman on eBay. I got his deposit with PayPal and he flew here to pick it up and drive it home. He gave us a certified check and away he went with our promise to send him the title ASAP. We took his money, sent it to BMW and got the title in the mail a week later. So far, so good......

The title BMW sent us was non-transferable and we were instructed to take it to our local DMV to get a transferable title to send him. At the DMV we were told "no problem, that'll be $1800". Uh, !!. We were told that since we had paid off the leased car (that was never even in my possession after being paid off), we now owed the "parasitic" State of Nebraska sales tax on the full value of that car! After we paid it, we would happily be given a transferable title. Not one to have $1800 gracing my wallet and totally confused and angry, I left to consult with a legal mind. I was told that indeed I would have to pay it to get a transferable title. Even though this is double taxation since my buyer had to immediately pay sales tax on it's value in the state he was from to plate the car and I never even had the thing after it was paid off! And to add insult to injury, I had a new Volvo S60R with "In Transit" stickers and my 30 days was rapidly running out.

I had to pay the $1800 and learned a valuable lesson. I also paid the $750 for the plates for the new car. I'll also never feel the same about this tax leaching state of Nebraska. I now buy every thing I can in Iowa (6 miles away) since I'm determined to extract the pound of flesh stolen from me by these sleazebags.

Just beware in case you have the same situation in your state!
 

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Re: how to sell a car that still carries payments. (TeeRex)

Quote, originally posted by TeeRex »
The title BMW sent us was non-transferable and we were instructed to take it to our local DMV to get a transferable title to send him. At the DMV we were told "no problem, that'll be $1800". Uh, !!. We were told that since we had paid off the leased car (that was never even in my possession after being paid off), we now owed the "parasitic" State of Nebraska sales tax on the full value of that car! After we paid it, we would happily be given a transferable title. Not one to have $1800 gracing my wallet and totally confused and angry, I left to consult with a legal mind. I was told that indeed I would have to pay it to get a transferable title. Even though this is double taxation since my buyer had to immediately pay sales tax on it's value in the state he was from to plate the car and I never even had the thing after it was paid off!

I have heard similar horror stories on Bimmerfest. Evidently, BMWFS is not too friendly when it comes to selling lease vehicles to anyone other than the lessee. When I sold my lease from a bank, the bank didn't care who was paying it off and took payoff directly from the buyer (and transferred title directly). Then again, the bank isn't interested in having a returned vehicle that can be CPO'd either.
 

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Re: how to sell a car that still carries payments. (MagoonR)

That's the same with (mostly) ALL leased cars in ALL states.
You have only paid part of the sales tax so you have to pay the rest, title it in your name, THEN send the signed title to the buyer.
Usually no exceptions. ALL states, ALL leases, I'm very surprised you got away with it
 

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Re: how to sell a car that still carries payments. (JRL)

Quote, originally posted by JRL »
That's the same with (mostly) ALL leased cars in ALL states.
You have only paid part of the sales tax so you have to pay the rest, title it in your name, THEN send the signed title to the buyer.
Usually no exceptions. ALL states, ALL leases, I'm very surprised you got away with it

If I am leasing and don't buy it out....the state gets no additional tax. Therefore, if I find someone to buy the lease out, the state gets tax from the buyer. The leasing company is the owner of the vehicle and shouldn't care (and didn't in my example) who pays them off since they are made whole and have no resale risk.

If one were to trade in a leased vehicle, the lessee doesn't pay sales tax to release the title to the dealer. The end buyer pays the sales tax.
 

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Re: how to sell a car that still carries payments. (MagoonR)

You're right, in theory and in common sense, but most companies want the original lessee (if they choose to buy it out) to pay the tax, not have someone else do. Why, I don't really know, but most states require this BS
 

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Discussion Starter · #16 ·
Re: how to sell a car that still carries payments. (TeeRex)

Quote, originally posted by TeeRex »
I sold a leased M3 convertible with a few payments remaining to a gentleman on eBay. I got his deposit with PayPal and he flew here to pick it up and drive it home. He gave us a certified check and away he went with our promise to send him the title ASAP. We took his money, sent it to BMW and got the title in the mail a week later. So far, so good......

The title BMW sent us was non-transferable and we were instructed to take it to our local DMV to get a transferable title to send him. At the DMV we were told "no problem, that'll be $1800". Uh, !!. We were told that since we had paid off the leased car (that was never even in my possession after being paid off), we now owed the "parasitic" State of Nebraska sales tax on the full value of that car! After we paid it, we would happily be given a transferable title. Not one to have $1800 gracing my wallet and totally confused and angry, I left to consult with a legal mind. I was told that indeed I would have to pay it to get a transferable title. Even though this is double taxation since my buyer had to immediately pay sales tax on it's value in the state he was from to plate the car and I never even had the thing after it was paid off! And to add insult to injury, I had a new Volvo S60R with "In Transit" stickers and my 30 days was rapidly running out.

I had to pay the $1800 and learned a valuable lesson. I also paid the $750 for the plates for the new car. I'll also never feel the same about this tax leaching state of Nebraska. I now buy every thing I can in Iowa (6 miles away) since I'm determined to extract the pound of flesh stolen from me by these sleazebags.

Just beware in case you have the same situation in your state!

that sucks... I better check with local authorities before I work on selling. Good info though..
 

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Re: how to sell a car that still carries payments. (stevectsai)

Just some additional info on the tax situation. It was not BMW specific. It's a state instituted requirement for all manufacturers doing business in this state. I had a friend who had the exact same thing happen to him with a Ford truck a few months later. I also have a friend who in the same situation in the state of Iowa was given a waiver form which states that the buyer paid the car off.

The BUYER paying the car off is no minor technicality legally and since the buyer of my car paid mine off, we were double taxed. Since taxes were due from the state of Nebraska and simultaneously for him in Texas. When someone promises to buy your car and provides the money for the payoff, the previous owner of a leased car NEVER owns it and therefore should not owe any unpaid sales tax on it's value. Stripped down to it's simplest form, there was one sale here, not two. This would be analogous to a dealership having to pay the full sales tax on a vehicle (it wasn't "given" to them, right?) and then you, the buyer having to pay it again when you buy it. I've talked to auto dealers and this of course (surprise!) doesn't happen.

It took a class action suit to get Iowa to stop requiring sales tax be paid up front for the full value of leased car, and that's probably why they have the waiver. To preempt their losing another expensive lawsuit that is probably coming down the pike to states like Nebraska. Deservedly so I might add.

Modified by TeeRex at 3:38 AM 6-2-2006
 
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