Budget101 Discussion List Archives Budget101 Discussion List Dave Ramsey Total Money Makeover

Viewing 0 reply threads
  • Author
    • #260418

      On Thu, 24 Jul 2008 09:25:28 -0700 (PDT), you wrote:

      >I have a question about selling the car for a beater.


      >If you sell a car that has a loan on it, you are still responsible for paying

      that loan off. So, if you sell the car and get a beater, even paying cash for

      the beater, you still have the car payment for the car you no longer have. Or

      am I missing something? It is not like you get the money that you are currently

      paying for the car freed up to pay on your other debts.

      You have to pay the loan off to get the clear title for the car. No

      clear title, no sale. In most car loans the car is the collateral for

      the loan, and the finance company is listed as a lien holder on the

      title until the loan is paid off.

      If there is a lien holder listed on the title, most states will not

      transfer the title. Some will with either proof the lien is paid in

      full (the release) or the (notarized) approval of the lien holder.

      It’s one of the things a new car dealer does when you buy a new car

      without having paid off the older one. The finance companies have to

      approve the deal.

      When you pay off the loan, the finance company forwards the paperwork

      to the state, which issues you a new (clear) title, without any lien

      holder listed. Check with the local motor vehicle licensing office

      for the rules in your state.

      If you can sell the car for more than the payoff on the loan, pay the

      loan off, and have money left to buy a beater car go for it.

      In reality, unless you have enough cash to pay off the loan before you

      try to sell the car, nothing will happen. Few people are willing to

      hand over money, and get a promise of a title in a week. First you

      have to cash the check, then you have to pay off the loan and get the

      release to get the title in your name only, the you need to get the

      title, and only then can you legally sign it over to a buyer.

      You might be able to work a deal with a dealer, but seller a higher

      priced car and replacing it with a beater is a loss for them. Expect

      to lose your shirt.


Viewing 0 reply threads
  • You must be logged in to reply to this topic.

Budget101 Discussion List Archives Budget101 Discussion List Dave Ramsey Total Money Makeover