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Selling a car with a lien on it?

darqnessdarqness KCMORegistered User regular
edited August 2012 in Help / Advice Forum
My wife and I recently had twin girls, and found that her hatchback doesn't fit the car seats comfortably without have to put your knees up to the dash. So we've decided to sell her Mazda 3 sincer we originally purchased it with 0% financing which has allowed us to come out 3-4k ahead on it. We'll take the profit from it, and apply it as a downpayment on a used SUV for her.

Here's the issue: The loan on it is with Chase bank who provided the special terms through Mazda. I know that generally when selling a car with a lien you want to meet at the bank who provided the loan, so the buyer can just pay it off there and take delivery of it. However according to Chase.com and the various support reps I've spoken with, there are no Chase bank branches anywhere near me in a 200 mile radius. Do I write up a bill of sale for the car to show that they did purchase and pay for it, then send in the buyer's payment to Chase to have it paid off, THEN let them take the car? I would think that this would scare off any potential buyers; having to pony up the money without taking immediate delivery of the car. However if that's the way it has to be done then I'll work with it. I just want to make sure I do this right.

Also I'm located in Missouri, and have the title for the vehicle which states that there is a lien on it.

darqness on

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    bowenbowen How you doin'? Registered User regular
    Call them, they'll tell you the specifics.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
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    3cl1ps33cl1ps3 I will build a labyrinth to house the cheese Registered User regular
    Call and talk to a live person at the bank. Then call again another day and make sure the information matches.

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    darqnessdarqness KCMORegistered User regular
    I think I've found what I need. It took a couple of different Chase reps to figure it out, but the best way would be to use an escrow company, so that the buyer knows the car and title will be released to them once it's paid off. It looks like escrow.com does this specifically.

    My main concern was that most people wouldn't want to send in a payoff on a car that they can't take delivery of right away. The Chase rep said absolutely do not release the car until the loan is paid off and I've received the clean title to sign over.

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    DjeetDjeet Registered User regular
    You can sign over a title with a lien on it, but since the title shows a lien the new owner would need a letter from Chase indicating the lien on the vehicle has been released. There's less hassle for everyone (you, new owner, Chase, title office) if you do the transaction with a lien-free title, however this may introduce several weeks of delays in the transaction which may put off buyers. Negotiate deal with buyer. Request a payoff statement from Chase. They cut you check. You deposit check. You pay off Chase. Movements of large amounts of money take a couple days usually. They issue a letter of lien release to you. You go to title office and get them to issue a clean title (this is the part that takes the longest). You sign over new title to buyer and provide a bill of sale.

    If you can get buyer's bank to work with Chase then you may be able to get some of this expedited (e.g. they pay Chase directly and you the difference and Chase issues you a lien release which you turnover to buyer). A title transfer should still be able to be negotiated with the county/state so long as there's a signed title and a lien release, but this may vary by locality. Looks like escrow.com could help you here.

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    darqnessdarqness KCMORegistered User regular
    Thanks Djeet. That's most helpful. After doing some research online it looks like it might be possible to have the buyer's bank cut a check directly to Chase for the payoff, and then they cut a check for the remaining balance to me. I imagine this would give the buyer some peace of mind knowing that I'm not taking the money and running. Making it as easy as possible for the is my main goal, since that will help attract buyers.

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