Tips on Buying Cars: Buying used truck with lien from private individual, mortgage payoff, cashiers checks

Question
QUESTION: I am looking for a used truck. I plan to buy from a private person. I want to be prepared to buy from a seller who has a loan - just in case. I read your two previous answers to this question. I have several follow up questions. I think your advice to take possession of the vehicle immediately upon paying for it is very wise.

I would be paying cash, so no loan is needed. I would be very willing to get a cashiers check over the counter at my bank and mail it to the lender, or walk it into a local branch.

What is the most practical way to find out the exact payoff amount? I am assuming the seller's lender would not be willing to give me that information.

Is the payoff amount valid only if paid off on a specific day, as is the case with a mortgage payoff?

Assuming I receive the check over the counter at my bank and ask them to send it to the lender, can I legally just drive the seller's vehicle home from the bank - without him - but with his registration in the glove compartment and his license plate on the back bumper? I assume I cannot get a registration and plate without the title, which I will not have yet.

Why would the lending bank refuse to give me the title if I have a bill of sale and the check for the full balance? I live in Florida.

I am not involved in a transaction yet. I want to learn this process first. Thank you for your help!



ANSWER: Austin,

Thanks for your question.  First, you will need to call the lender with your seller and verify the loan payoff.  Now, understand it may be less than what he/she is charging you, and that is their prerogative.  Once you have verified the payoff, and if it is less than the seller is charging you, get two cashiers checks.  One made out to the LENDER ONLY! and one made out to the individual.  If the seller is only charging you their payoff, simply get one cashiers check and make it payable to LENDER with a letter notarized stating the lender send you the title to the vehicle, not the seller.  Both you and the seller need to sign it.  Otherwise, the lender will send the title to the seller not you.  Yes, the payoff amount is usually valid for up to 10 or 20 days, based on the lenders standing policies.  You will need to make sure that the check is in their possession by that date.  

As far as the registration of the vehicle, call your local DMV office in Florida and explain to them how everything is going down.  They will tell you what is required to get that vehicle into your name.  They will most likely require the both of you to come to the DMV office and sign forms, and then they will give you a temporary plate.  

The lending bank won't necessarily refuse to give you the title, that is why you need a notarized statement signed by the both of you, included with the check as well as the bill of sale.

Hope this helps.

If you have any other questions, don't hesitate to ask.

Thanks - JB

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

QUESTION: Thanks for your help JB. It sounds like the step that legally allows me to take physical possession of the vehicle is the title transfer. Until I have that title (free of liens) from the bank, I cannot legally take possession. Although I prefer to take possession immediately upon letting go of the certified check  (driving the truck home from the bank), I don't see how I can legally do that - unless the seller is willing to drive the vehicle into my garage, take off his plate and take it with him, then go with me in my car to his bank to payoff his loan with my check. My goal, therefore, is to get the cleared title from the lender during the same visit that I give them my check. This would let me take the title and the seller with me to the DMV to get a new title, registration and plates. Does this sound realistic to you? I prefer to logistically enforce whatever contract the seller and I sign, instead of legally enforcing it.

If I walk into the bank with the payoff check and a notarized letter,signed by both myself and the seller, how long will the bank need to send me the title? Can they give it to me right then and there? Will the title still show a lien, or is there a place on it where the bank signs and notarizes it to demonstrate the payoff?

Thanks much for your time and help - Best Regards Austin

Answer
Austin,

Thanks for your follow up question.  Actually, once you take possession of the vehicle, and have paid for it, and have signed a bill of sale, you are the legal owner.  It has nothing to do with the lien fulfillment on the other parties part.  Now, lets see, if the bank is a local bank, they should have the title in their possession, but if it is a national bank, then more than likely they will not have the title on hand.  Either way, they have to sign on the title fulfilling the lien and releasing it.  Their is a spot on the title where they will sign and date the lien fulfillment.  

Hope this helps.

Thanks - JB