Used Cars: Buying a used car with an existing lien, lienholder, lien holder

Question
QUESTION: I have found a used CTS that I would like to purchase from a private seller.  He has told me there is a lien on the car for $18,200.  We have agreed on a price of $17,500.  He needs my money to pay off the lien.  My plan is to pay cash.

How do I structure the deal so I am not at risk of losing my money or not getting a clean title.  We are in Michigan if that is relevant.

Thanks,

Erik


Car Guy   ANSWER: You need to only pay your money to the lienholder with certified funds. Under no circumstances give this money to the owner. Also make sure you aren't paying too much for this car CTS's are soft soft soft ... really soft. That doesn't mean they arenm't good cars only that the current market thinks they are over priced in relation to their book value if you aren't paying the equivalent of "Trade-In Value" or less on KBB.com hen you may be paying too much. Good Luck I hope everything works out and you get a great car at a good value. Let me know if you have any follow up questions
Roger

---------- FOLLOW-UP ----------

QUESTION: Thanks for the repsonse.  My follow up is concerning the fact that what I am paying is less than what the lien is.  How do I guarantee that when I pay my money to the lien holder the owner makes up the difference and I get the clean title?  Do we have to go to the bank together?  I sthere another way?

Thanks,

Erik

Answer
Usually what people do is on the day you go to get the car with your cashiers check for $17,500 in your pocket made out to both him (the seller) AND the lien holder both. He has a cashiers check made out to the lienholder for his difference (make sure you get a 5 to 10 a payoff from the bank when you calculate what the payoff is going to be and make sure that you verify this with your own ears) then when you take possession of the car you get a receipt for your money and then in an envelope addressed to the lienholder you place both checks and then both of you walk in deposit the check into a mailbox where it cannot be retrieved except by a Postal Service worker. Usually however the bank or the loan was financed will have a local branch and you can both meet there and pay off the loan and retrieve the title at the same time. Don't freak out if the bank doesn't have the title in the branch they generally keep them somewhere else altogether