selling a potential repo?

[scoobstein]

I've seen several posts re: selling a vehicle instead of having it voluntarily reposessed.   Without the title, how can you sell it?   Is there a way to do that?  Any insight is greatly appreciated.... thanks!

[Chad3304]

you have to sale the vehicle for the payoff amount or get it close and pay the rest out of pocket, but either way in order for you to get the lein released the loan has to be paid in full.

[scoobstein]

Ok... that I understand - but how can you legally sell the vehicle... when you dont have the title for it?  I know the lender would sell it at auction... and get whatever price - but I feel that I could get a better price by selling it myself.  Just want to make sure that I do it properly.

[MattH]

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@scoobstein wrote:
Ok... that I understand - but how can you legally sell the vehicle... when you dont have the title for it?  I know the lender would sell it at auction... and get whatever price - but I feel that I could get a better price by selling it myself.  Just want to make sure that I do it properly.

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If you owe then you can't sell without paying off loan and getting lien release from lender, which they will absolutely not do before getting paid, since that lien represents their assurance that they will get paid.  Dealers can do package deal in which new loan pays off old loan, but in a private sale that's not an option.  One alternative I have heard of is the buyer and seller both physically go to a local office of the lender, buyer hands certified check to lender, then either seller hands smaller certified check to lender (if upside-down) or buyer hands smaller certified check to seller (if sale price exceeds amount owed).  Doing this requires a cooperative buyer and a lender with a local office.  If the amount owed isn't too large another option is you take out a personal loan to pay off the car note and then pay off that personal loan after the sale (probably the interest rate on the personal loan will be higher than a secured loan, but you won't be paying it for very long if you sell the car quickly).

But I strongly believe in keeping a car for some time after loan is paid off, during which time amount of payment can be saved for a bigger downpayment on the next car; after a few cycles of putting more down each time you can work up to getting a used car without borrowing at all.

And I do strongly advise checking several auto price websites for recent and realistic market price information, as many people lately have been shocked to learn the market prices for their cars had dropped due to the economy.  You had better find out what your car is actually worth before making any decisions.

[Takunda1]

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@scoobstein wrote:
Ok... that I understand - but how can you legally sell the vehicle... when you dont have the title for it?  I know the lender would sell it at auction... and get whatever price - but I feel that I could get a better price by selling it myself.  Just want to make sure that I do it properly.

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You can sell a vehicle to anyone without the lien release yet. Bottom line is if you want the lien released, the finance company has to get paid in full, for what you owe. We recommend people do this all the time when they want to do a voluntary surrender, becasue almost most times a private party sale will yeild better returns than an auction. Whay you will find however is that the buyer is going to have a lot of questions before they hand you any cash. Sometimes they'll want to be conferenced in on a call with the lender to make sure they'll get the title whan the unit is paid off.  FYI the easiest way to payoff a car is via Moneygram or WesternUnion. While certified checks are ok, some have been fake and when the finance company tried to cash them they came back.

If you find someone to buy the car make sure to contact your finance company and inform them of your intentions.

[scoobstein]

thanks for the in-depth answers - i really appreciate it!

[Anonymous]

Just to clarify, are you thinking that you could sell the vehicle for less than owed privately, and get a large amount than the lender would get at auctions?  That was the impression I got.  In other words, your thinking was that you were going to turn it in as a voluntary repo but instead, maybe you could sell it as you would get more than the auction would get and the lender would be OK with that and just "bill" you for the difference, same as they would after the auction.  The answer is no, they will not allow that.  And be prepared to take  HUGE hit on the auction price.  Auction prices are typically 25-30% lower than the retail price but I have heard stories recently of 50% of current used market price because of a glut of repos, tighter lending to dealers to buy inventory, and the general condition of the auto market.

[MattH]

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@Anonymous wrote:
Just to clarify, are you thinking that you could sell the vehicle for less than owed privately, and get a large amount than the lender would get at auctions?  That was the impression I got.  In other words, your thinking was that you were going to turn it in as a voluntary repo but instead, maybe you could sell it as you would get more than the auction would get and the lender would be OK with that and just "bill" you for the difference, same as they would after the auction.  The answer is no, they will not allow that.  And be prepared to take  HUGE hit on the auction price.  Auction prices are typically 25-30% lower than the retail price but I have heard stories recently of 50% of current used market price because of a glut of repos, tighter lending to dealers to buy inventory, and the general condition of the auto market.

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Hmm, I hadn't thought of that angle, you are correct, if original poster is underwater then to avoid a repo OP will have to come up with lots of cash upfront one way or another in order to sell the vehicle privately.  The whole point of having a lien is to protect the lender.

[Anonymous]

Selling a financed vehicle is not quite as straight forward as a free title auto, but it isn't any problem either.

I have sold several financed vehicles to private parties rather than trading in.  I got a much better price.

But as previous posts mention, the buyer must pay as much or more as is owed, or you must pay the difference before title will be transferred by the lienholder.

Message Edited by txjohn on 09-10-2009 04:35 AM

[GregB]

From the examples that I have seen lately, the auction prices are shocking. The dealer sale prices and private party sale prices are way down, but nothing like the auction prices. The supply at the auctions exceeds demand and the buyers have little money left to buy and nowhere to store depreciating inventory that has no ready market.

This varies by area but if you let it go to auction, be prepared for it to go for a shocking price.

In my auto parts business I was selling parts recently to a dealer that bought a car for his wife. KBB wholesale was $11,800. He paid $2,700. It is ugly out there.