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2014-07-22 12:14 PM

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Champion
10018
50005000
, Minnesota
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Subject: Selling car to private party with bank loan - process?

I am planning to sell my car to an friend who will be getting the money from her credit union on loan.  I have only ever sold cars to people with cash, so we've simply traded the title for the check in one meeting.

Her bank said she needed to "bring in the title for a lien check" before issuing the check.    I told her that the title did show a lien, I had the Certificate of Lien Perfection, and why did they need to physically see the title to verify the lien status?  I don't think it proves anything.  Also, it's a coincidence that I we know and trust each other - I would never hand over the car title to a stranger in this way.  It seems like a bizarre step.

So, I wondered, has anyone been involved in a private auto sale that included a credit union loan and what was the process at the CU?  Did you have to meet at the CU?

Just curious.  It may be a state by state issue.  I've only ever purchased a car myself at a dealership, so the financing, title, etc, all happened automagically.



Edited by BikerGrrrl 2014-07-22 12:15 PM


2014-07-22 12:41 PM
in reply to: BikerGrrrl

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1159
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Subject: RE: Selling car to private party with bank loan - process?
Originally posted by BikerGrrrl

I am planning to sell my car to an friend who will be getting the money from her credit union on loan.  I have only ever sold cars to people with cash, so we've simply traded the title for the check in one meeting.

Her bank said she needed to "bring in the title for a lien check" before issuing the check.    I told her that the title did show a lien, I had the Certificate of Lien Perfection, and why did they need to physically see the title to verify the lien status?  I don't think it proves anything.  Also, it's a coincidence that I we know and trust each other - I would never hand over the car title to a stranger in this way.  It seems like a bizarre step.

So, I wondered, has anyone been involved in a private auto sale that included a credit union loan and what was the process at the CU?  Did you have to meet at the CU?

Just curious.  It may be a state by state issue.  I've only ever purchased a car myself at a dealership, so the financing, title, etc, all happened automagically.




set up a time to go with her to the bank for the lien - or see if they would accept a notorized copy of it. you should potentially also be able to say, this is currently who holds the lien with the account info
2014-07-22 1:26 PM
in reply to: 0

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Champion
10018
50005000
, Minnesota
Bronze member
Subject: RE: Selling car to private party with bank loan - process?

I don't have a lien - I have the paperwork showing the lien was released.  This usually just accompanies the title when someone transfers ownership.  I could have gotten the title cleared in advance, but it's not required if you have the "Certificate of Lien Perfection."

Just to clarify - the "Certificate of Lien Perfection" is the notice filed with state driver and vehicle services showing the bank has released the lien.



Edited by BikerGrrrl 2014-07-22 1:28 PM
2014-07-22 1:35 PM
in reply to: BikerGrrrl

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Expert
3126
2000100010025
Boise, ID
Subject: RE: Selling car to private party with bank loan - process?

I buy all my cars private party, have never run into this problem with my CU or the other parties.

Usually a VIN check is all the bank wants before hand. I typically try to handle the transaction at the CU, goes a little smoother and everyone feels safer when the CU handles the transaction for us. I'd just setup an appointment with your friend to go to her CU and get everything handled.

Seems like it does vary by state though. Never heard of a Certificate of Lien Perfection before. In Idaho the bank holds the title until paid off, the "owner" just holds the application for title. Once the car is paid off the state sends the title to the owner in the mail, free and clear. 

2014-07-22 3:28 PM
in reply to: BikerGrrrl

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Elite
2729
200050010010025
Puyallup, WA
Subject: RE: Selling car to private party with bank loan - process?

We just did this and it was a little confusing honestly. But one thing I learned, make sure you file with the state that you sold the car. The state licensing website might also have some instructions...

 

:-)

2014-07-22 4:24 PM
in reply to: Aarondb4

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Champion
10018
50005000
, Minnesota
Bronze member
Subject: RE: Selling car to private party with bank loan - process?

Originally posted by Aarondb4

I buy all my cars private party, have never run into this problem with my CU or the other parties.

Usually a VIN check is all the bank wants before hand. I typically try to handle the transaction at the CU, goes a little smoother and everyone feels safer when the CU handles the transaction for us. I'd just setup an appointment with your friend to go to her CU and get everything handled.

Seems like it does vary by state though. Never heard of a Certificate of Lien Perfection before. In Idaho the bank holds the title until paid off, the "owner" just holds the application for title. Once the car is paid off the state sends the title to the owner in the mail, free and clear. 

Thanks.  Yeah, I would have thought the VIN check was enough. 

In Minnesota you receive the title in the mail after the sale is registered and it has the lien holder info typed on it (or "no liens" or something like that).  Then the bank contacts the state when the lien is satisfied, who sends the certificate to the owner.  Yeah, it's weird. I think it should automatically generated a new title being sent to the owner.    This means, of course, that Toyota Credit Corp (or whoever) has 50 different processes, I suppose!



2014-07-22 4:32 PM
in reply to: lkct01234

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Champion
10018
50005000
, Minnesota
Bronze member
Subject: RE: Selling car to private party with bank loan - process?

Originally posted by lkct01234

We just did this and it was a little confusing honestly. But one thing I learned, make sure you file with the state that you sold the car. The state licensing website might also have some instructions...

 

:-)

Fortunately that's the one thing I do know about, based on some recent sales (helping my dad). I've spent too much at DVS, in person and on their web site...

And this is why I like going to the dealership!!!

2014-07-23 9:30 AM
in reply to: BikerGrrrl

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Champion
6993
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Chicago, Illinois
Subject: RE: Selling car to private party with bank loan - process?
yeah I feel your pain. I did the same thing. Bank said they rarely would give a loan but since my sister worked at that branch as head teller they made an exception.

I also got into the we need the title to get the check but the owner would not give the title without the check issue. Eventually we agreed my sister could bring the check and take the title since she worked for the bank.
2014-07-23 2:11 PM
in reply to: chirunner134

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Expert
1224
1000100100
Is this Heaven? No, it's Iowa.
Subject: RE: Selling car to private party with bank loan - process?

I have worked for a bank for 16 years.  Credit Unions do things differently than banks and I am not a big fan of their general lack of understanding.

All the Credit Union needs to propertly document their new collateralized position in the transaction is the Year, make, model, and VIN for the auto.  They need to beleive that the vehicle funds are going to be purchased by the buyer from the seller and that the buyer will be obtaining a tilte clear of any and all liens.

The CU sounds like they are making a very simple transaction much harder than needed. 

A title in hand with a Lien Release certificate is all the documentation that you as a seller need to provide to the buyer upon receipt of the agreed upon funds.

Good luck. 

2014-07-28 8:16 AM
in reply to: BikerGrrrl

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Expert
1743
100050010010025
Glen Burnie, Maryland
Subject: RE: Selling car to private party with bank loan - process?
I work for a credit union in Maryland. We have 2 part titles also. We ask for a copy of the title to verify VIN and lien. If the vehicle has a lien then we make the check also to the lien holder so ensure the loan will be paid with the fund. If the lien is satisfied then the check is made to the seller. We never require the original title before the transaction is completed.
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