Purchasing a used motorcycle with a lien

[dcdomain]

Update: Found a thread with the info I was looking for. Thanks for the responses anyway, and for not harping on my terrible search skills!
http://bayarearidersforum.com/forums/showthread.php?t=216958

Hey guys,

I'm in the market for a motorcycle and recently got the following reply. Wondering if anyone has had experience with this and could offer suggestions as to how to move forward? TIA!

The Bike is currently owned by San Mateo Credit Union (since we used them for financing). We are the first and only owners of the motorcycle. There are a couple of options in going forward with a sale. If you're serious about purchasing the bike, we could easily pay the remaining balance owed to the bank (it's only 2 months) and have the pink slip delivery process started.

-dc

 

[Diezel]

Don't even THINK about buying it till they show you the title. It's not worth it, since there is only 2 payments left on it.

 

[Beauregard]

I sold a fellow BARFer (HalfEvil) a bike that had a loan on it. He gave me the full amount and I FedEx'ed him the title when it came.

It was a seamless transaction, but it required trust.

 

[Dr. Evil]

No reason you couldn't do it, but it'd be best to arrange the transaction so it takes place at the bank (credit onion) with a bank employee helping to clear things up and witness.

 

[louemc]

No reason you couldn't do it, but it'd be best to arrange the transaction so it takes place at the bank (credit onion) with a bank employee helping to clear things up and witness.

:thumbup That's the only way, I'd do it.

 

[mototireguy]

Remember that in these cases the seller does NOT have the title and does NOT own the bike. The lien holder (credit union) owns the bike.

Best to meet the seller at the credit union, hand over your money to the credit union and make sure to get proper receipts/documentation.

Too many horror stories of used bike sales where the seller takes your cash, disappears and doesn't forward the money to the lien holder. Leaving you the buyer holding the bag with what's basically stolen property.

 

[Splicer]

I don't mean to hijack the thread but I have a variant on this situation.

I am selling a bike that is paid off—has been for three or four months—but for which I have not yet received the title. The bank (not local) told me last week when I called to ask about it that they were releasing the lien. I have no idea whether I'll receive the title in a couple days (OK, this is unlikely), a couple weeks, or a couple years. Would it be ethical for me to substitute a signed (and perhaps notarized) contract stating that the title would be provided to the buyer immediately on receipt?

 

[Beauregard]

A signed bill of sale and a copy of the DMV release of liability for both parties has always worked for me.

I sold a Toyota Tacoma to a dude on CL for $14k, I think at the time I owed $5k on it. He gave me the cash and I sent him the title about 4-5 weeks later when my bank sent it to me. I also bought an XR650R (plated) without a title because the seller owed like a grand on it. We did the deal at his home and he sent me the title when it came... actually I think I went to his house and picked it up.

These deals are about trust. Get a feel for the seller and if for any reason he rubs you the wrong way don't do it. On the other hand if he comes off as a man of integrity then in my personal experience it's fine.

 

[edchung]

There are basically two ways to buy a lien'ed vehicle, not including paperwork details:

1. Buyer gives Seller money.
2. Buyer *trusts* Seller to not be lame and send money to the bank.
2. Seller pays off bank, waits for title to arrive from bank.
4. Seller sends signed title to Buyer.

Alternately:

1. Buyer and Seller meet at San Mateo Credit Union.
2. Buyer pays "payoff amount" directly to the bank. Use a cheque with your name on it. Sign a Bill of Sale with the Seller at the bank.
3. Bank sends title to Seller.
4. Seller sends signed title to Buyer.


Actually, would another option be to transfer the loan? That is, if Buyer went to San Mateo Credit Union and said, "I would like to transfer ownership, and the loan, to my name," would SMCU then transfer ownership without depending on the Seller to send the title later?

 

[The Godfather]

There are basically two ways to buy a lien'ed vehicle, not including paperwork details:

1. Buyer gives Seller money.
2. Buyer *trusts* Seller to not be lame and send money to the bank.
2. Seller pays off bank, waits for title to arrive from bank.
4. Seller sends signed title to Buyer.

Alternately:

1. Buyer and Seller meet at San Mateo Credit Union.
2. Buyer pays "payoff amount" directly to the bank. Use a cheque with your name on it. Sign a Bill of Sale with the Seller at the bank.
3. Bank sends title to Seller.
4. Seller sends signed title to Buyer.


Actually, would another option be to transfer the loan? That is, if Buyer went to San Mateo Credit Union and said, "I would like to transfer ownership, and the loan, to my name," would SMCU then transfer ownership without depending on the Seller to send the title later?

Yes, that can work too, just as long as the Buyer is approved for the loan by the credit union.

However, since there are only 2 payments left, the credit union in this particular case may not transfer the loan.

 

[Diezel]

However, since there are only 2 payments left, the credit union in this particular case may not transfer the loan.

Even if they did, the buyer would have to qualify for it. And since very few places make small amount personal loans. That could get pretty odd quickly.

Like I suggested, with the pay off amount so low. Don't even consider buying it, unless the seller has the title in hand. It's just NOT worth any effort if something goes stupid.

 

[maxandgrinch]

I've done it by having the buyer make the check out to my bank, the lien holder.

I provided a FedEx envelope with the bank address completed, asked them to verify this was the mailing address by their own means (look up on intertubes/call the 800# whatever they felt comfortable with), and then the bank called me in a couple of days and asked what I wanted done with the amount over the payoff.

As it has already been suggested and since the bank is local - go there and do it in person.

 

[dcdomain]

Thanks for all the advice everyone! Will have to think about this some more, might still be worth a trip up to meet the seller in person...

 

[Motech]

It would have to be a very special bike to be worth the hassle, so anything Japanese or American is ruled out.