Full question:
I am planning to purchase a car from a private party for $13,000 but the seller still owes $6,000 to the bank and therefore cannot transfer the title upon receipt of my payment. It will take some time after payment for the necessary transfers to take place. How can I enter into this transaction without risk (i.e. if the title transfer falls thru I need my money back).
- Category: Automobiles
- Date:
- State: California
Answer:
It’s not advisable to pay for the car until the title is transferred. When a car is financed, the lien must be released before it can be sold. If the seller doesn’t have the right to sell the car, you may be able to sue for breach of contract to recover your money.
To sell a financed car, the seller must arrange for the lender to receive their payment and release the lien. This is a standard process for finance companies. You can pay the finance company directly. If the amount you pay is more than what the seller owes, the seller will receive the difference. Once the lien is released and notarized, the title can be transferred to you.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.