I'm not sure if this is the right place for this, but here goes...
Like I've said before I am buying my first car ever, the previous cars I've had were hand-me-downs. My question is if I am buying from an owner who financed through Honda Finance, what precautions should I take to make sure I get the title? I plan on paying cash even though I'm weary of carrying $11,500 in my pocket...thinking about getting a Bank Cashier Check, but I don't wanna pay extra. My understanding is that Honda has to receive the money from the current owner and then they'll send the title to her, at which time, she'll send it to me. Is that right? Sorry about the wordiness and lengthiness about my post, just wanna be thorough and not screw anything up.

 

your local dmv should be able to provide more information, as there will be variations on how title transfers are processed from one state to another.

generally speaking, the ideal scenario is for the current owner to have title in-hand, which means she should pay off her loan to ahf. if that's not feasible, then you should look into making the payoff on her behalf by making that portion of the check payable (or wire funds directly) to ahf, with any difference due to current owner. think of the couple extra dollars you spend as a cost to mitigate risk.

at time of exchange, you should receive a bill of sale along with proper forms to cover release of liability and odometer disclosure. again, check with your local dmv for list of requirements. in some states, afh may be required to send that cleared title back to the dmv, who will then determine appropriate ownership based on records you've filed from the transaction.

lastly, if you are concerned abt carrying such a large sum of cash, just have her meet you at your bank to complete the transaction -- you'll probably both feel safer.

good luck!

 

Thanks for the info Glenn. On top of what I pay to the owner. I'm going to have to pay sales tax to the state and pay for a license plate. Are there any other fees I can expect to pay?

 

Be prepared to pay sales tax and registration fees.

myke

 

Here's a link to the Frequently Asked Questions (FAQ) of the Kansas Department of Revenue (motor vehicles)
Kansas Department of Revenue - Frequently Asked Questions - Motor Vehicles - Titles and Registrations

Read all the things about lien holders. And this:

What do I do when buying a vehicle and the seller does not have the title?If you are buying the vehicle from a Kansas seller who does not have the title, ask to see the Kansas registration receipt for the vehicle. If there is no lien holder information listed on the receipt, the seller will need to obtain a duplicate title in order to make the assignment of title.

If the registration receipt shows the word “ETITLE” to the right and slightly above the owner’s name and there is information listed in the lien holder area of the receipt, then the seller will not have a title to assign to a buyer until the lien is released. The buyer and seller will need to reach an agreement of how the purchase price is to be paid so that the lien holder will provide the release. Once the division receives the lien release, a title will be issued and mailed to the address indicated on the lien release.

When the title is an etitle, the seller can follow the instructions to complete and deliver to the buyer an Electronic Sales Agreement, form TR-39a. The buyer can then take the TR-39a along with proof of insurance, to a county treasurer’s motor vehicle office and obtain a temporary registration (30-day permit). The buyer cannot make application for title in his or her name until the actual title has been assigned.

If the seller will not be available to assign the title once it has been issued, the seller can complete and deliver to the buyer a Power of Attorney and Odometer Disclosure for Electronic Title, form TR-40*. The lien holder will need to add the buyer’s address to the lien release as the “mail to address”. Once the buyer receives the title, he or she can complete the assignment of title, attach the TR-40 and make application for title.

*If the buyer is titling the vehicle in another state, check with that state’s motor vehicle agency to be certain they will honor the TR-40. If they will not accept the TR-40, then a Secure Power of Attorney can be used instead. A Secure Power of Attorney may be obtained from a Kansas franchise (new) vehicle dealer or a Kansas used vehicle dealer, and there will be a fee. -------

All the basic info should be there. And what questions you don't have answered, take them up with the Motor Vehicles people, NOT the seller.

And don't give them cash. That's just foolish. Unless you happen to have it lying around, don't assume the bank can count out some hundreds for you in a jiffy.

Even making a deposit in cash (or purchase of a cashier's check) over $10,000 requires an IRS form to be signed. Has to do with the prevention of money laundering, you can read some basics and get some links via the Wiki page here:
Bank Secrecy Act - Wikipedia, the free encyclopedia

 

You're quite correct to be concerned. Buying from a private individual who has a loan is a big trap. The sellers who run off with sales $ are legion.
You must get with the KS DMV, someone posted the link to start with so you know the process they want.
.
Handle this deal through a responsible financial institution like your bank or Honda dealer. Most Honda dealers and reknown bankers have direct access to Honda Finance so you can be assured that any of the funds you provide to purchase do go to Honda Finance and not go into the hands of the seller. Do not depend of the seller paying off the remaining debt first and second to make sure they really know the payoff ! PERIOD !!!
You would be stunned at the number of borrowers who really don't know the payoff. Usually they owe much more than they think thanks to the rule of 72 on calculating interest and that can threaten the sale.. It also assists your getting the title promptly. Though most sellers are honest, it pays royally to take no chances!
Mosr Honda dealerships finance department are glad to help you simply because you are now a Honda customer and charge you nothing except the taxes, title transfer, and license plate purchase or exchange.
The DMV probably can't handle making sure any of your payment that is needed to clear the title goes to the lender so your bank or dealer is preferred. Depend on a professional !
AND:
Make sure you get copies of every piece of paper you sign. Repeat, get a copy of every piece of paper you sign. Or vouch for. And you will need a good sales agreement that most financial institutrions Honda dealers can also help. Make sure all contacts, vehicle description including VERIFIED serial numbers, verifiable mileage, affidavit of cleared title or other personal loans (sometimes vehicles are used to 'guarantee a personal loan that won't show up at Honda Finance), any any damage that has occurred in the past and where repaired, if it was. CarFax claims to be a good source but its really only 50% reliable. Still, its a good thing to check.. Now that we scared you hopefully you'll go to a professional to help. Even if they charge you $50 its worth it.
Its just good business.

Good luck and congrats.

PS verified means you read the numbers yourself. Do not depend on anything else!

 

I've sold a car that was still being financed before. It's really not that hard, it just takes a few days longer because I have to wait for the bank to send me the title.

Here's how it usually goes:

Buyer agrees to buy the car for a certain amount.

We draw up a bills of sale/sales contract stating the facts such as the amount he paid, lienholders and that once I receive the title, I have to sign it over to him within a certain number of days. You guys can even get it notarized if it makes y'all feel better.

He gives me cash, I give him the keys and he drives off. I can accept checks too, but we'd have to cash it at the bank first before I give him the keys.

A few days later, I get the title in the mail, sign it, and send it to him immediately.

Now let's say that I have a buyer but he wants to finance the car thru his own bank...

His bank would issue a bank draft with both of our names on it. He would sign it over to me so I can send it over to my bank. Then my bank will automatically send the title to his bank, and he now assumes the new loan. I hope that makes sense.

Either way, it's a pretty simple process. Just make sure both parties have copies of everything.

myke

 

im with mahout. pay the institution directly, dont pay it through the girl.

 

I'm in the case that I'm the car owner and wanna sell my car, but the bank has the title. Good luck with it, hope it works for you both.

 

Rules exactly the same. Use a financial officer at a bank or Honda dealer. They will see that the loaning institution is paid so your title is cleared and transferrable and the buyer is safe too. The best for you is do it at YOUR bank holding the title so it can be cleared out right then. Make copies of all paperwork INCLUDING the signed title and transfer. The financial institution can then be sure buyer and seller get what they should.

 

How does the loaning bank know the car will be title loan-free ?
No financial officer I know would loan $ until he knew the title was clear and car was inspectable by him. Even after a valid sales agreement signed and all.

And you may be honest but what's keeping you from simply taking the cash and going off with it? If he went with you to your bank and saw it paid and title cleared you might be OK but ...
Then the buyer goes back to his back to complete the sale.

Its not so simple if there's dishonesty involved. What happens if the seller finds he owes more than the sale price ? I've seen it happen a lot.
The buyer really ends up with nothing; the original bank loaner has title, maybe not the car, tand the buyer has absolutely nothing except considerable law enforcement and lawyer conferences.
And if he drove away in the Fit the bank not paid could have him arrested for theft.
Repeat: use a professional. All are safer that way.

 

Because I have an official letter from my bank stating what the payoff amount is. Once it's paid off, they release the title.

I don't need to touch the cash. He can just pay my bank directly and take the car with him. Once the title comes, I sign it off and give it to him.

Once again, I have an official letter from my bank stating what the loan amount is, which is usually less than the selling price. His payment satisfies the loan, he drives off with the keys and the car.

I understand this is a little out of the comfort zone of some people, but it's perfectly legal. You just have to have some common sense.

If you're still uncomfortable, an escrow service may also be used.

It's not that hard.

myke

 

Its not illegakl til someone walks away with undeserved cash. And when you have the money go directly to your bank you had a professional take care of it.