Tips on How to Buy a Used Car With Lien Holder Title

Purchasing a used vehicle can be a savvy move if you're a thrifty shopper. Instead of paying for dealer mark-ups, you can avoid the middle man and deal exclusively with the owner. However, there are some measures you should take to make sure the transfer of ownership is handled properly. Clearing any old or existing liens on the car title is foremost, and the process is not that involved.

Instructions

1

Contact the seller, and negotiate a purchase price. You are not entitled to know the full payoff on the loan (this information is private), but you are entitled to see a clean title before striking a deal. Make sure both parties come to an amicable agreement on the purchase price.

2

Schedule a meeting to purchase the car with the seller and his lender. If the purchase price (what you'll be paying) will not cover the full payoff, the lien cannot be released. In this case, the seller must provide the difference to cover the shortfall.

3

Hire a notary to witness the transaction. You do not need a lengthy bill of sale, but you do need some documentation confirming the sale. This document should include the date, the vehicle's VIN (Vehicle Identification Number), the names of the buyer and seller, the purchase price and the condition in which the car is received.

4

Give your check to the lender directly, if it will be paying off a lien on the title. The seller also must give the lender a check for the shortfall, if there is one. Only then will the lender file a release of the lien. Make sure you get a copy of this document. Get a copy of the notarized bill of sale, too.

5

Bring these documents to your local DMV office. Fill out a transfer-of-ownership form, and present it with the title, the lien release and the bill of sale. The DMV representative will transfer the ownership of the vehicle to your name--with a clean title.