[neo]

I need some help with used car buying/selling. In the past I have bought new cars and my previous car was always paid off first. Now if I go to a dealer I know they just pay off my loan and handle everything. So a few questions:

1. What happens if I want to sell it myself and I haven’t paid it off?
2. Or if I want to buy a car from a seller who hasn’t paid his off yet? Normally they have the title and just sign it over to you but in this case they wouldn’t have that.
3. And lastly this may be a bit of a stupid question but since the previous owner paid taxes on his new car purchase do I then pay taxes again when I buy it from him (I’m assuming yes, when I title it)?

Thanks in advance.

 

[hfelknor]

I need some help with used car buying/selling. In the past I have bought new cars and my previous car was always paid off first. Now if I go to a dealer I know they just pay off my loan and handle everything. So a few questions:

1. What happens if I want to sell it myself and I haven’t paid it off?

You have to fully explain the situation to the buyer.
I have done this years ago. It DOES complicate the transaction.

2. Or if I want to buy a car from a seller who hasn’t paid his off yet? Normally they have the title and just sign it over to you but in this case they wouldn’t have that.

That's right. You can't get the title until he gets one with no liens attached. This can take some time.


3. And lastly this may be a bit of a stupid question but since the previous owner paid taxes on his new car purchase do I then pay taxes again when I buy it from him (I’m assuming yes, when I title it)?

Of course the new buyer owes new sales tax based on the transaction.
I know that you realize that the govt wouldn't pass this opportunity.
Some people have been known to make up two sales contracts, one with a lower price for tax purposes.
I never have as I don't think a few hundred dollars is worth jail time.


One thing a seller might consider is taking a short term loan from a credit unio, etc and go ahead and pay off the car before he sells it.
Then of course, make sure you pay off the loan as soon as you get the bucks from the seller.
But this assumes that you are committed to the sale.
If you don't sell it...........the loan is still there.....

Thanks in advance.

I think you are seeing one of the several reasons people PREFER to trade in.
I always sell the old car, but then I am lucky enough to be in position to buy my cars for cash nowadays.

Homer

 

[jaggy13]

your making it more complicated than it really neads to be.

just think of it like this; the lein holder needs to be satisfied to release the title.

you get a loan from your bank, they handle the transfer w/ the other bank (or lein holder) and if the sale price is less than what is owed the seller must pay the difference. (thats when car salesmen offer to roll your negative equity into your new loan.)

at any rate you do need to pay sales tax based on the state you register in. (5% for me, due at registration.) Most lenders will add that to the loan for you.