Full question:
We are going to be selling an automobile that we currently have a lien on in the amount of approximately $350. We will be selling the vehicle to a private party for $500. The lien is with a credit union in North Dakota (our previous residence). The credit union in North Dakota has physical possession of the Title. We have contacted the credit union and they informed us that once they receive payment-in-full, they will release the title to us within 14 days. My question is, is there a specific Bill Of Sale document we should be drafting with the buyer that states there is an existing lien on it, and that their we (the seller) will be providing them with the Title to the vehicle forthwith? Furthermore, are there any other steps we should be taking to provide ourselves and the buyer with peace-of-mind that the title to the vehicle is free & clear (once the lien is paid in full of course)? Lastly, the vehicle has not moved in nearly a year, and the tags/registration are well expired. Vehicle was last registered in North Dakota. Buyers and sellers are in Indiana now. Is the registration something the buyer is responsible for, even with an expired registration?
- Category: Automobiles
- Date:
- State: Indiana
Answer:
Typically, a financed car will need to have the lien released before it may be sold. If the seller didn't have the right to sell the car, it may be possible to for the buyer to sue for breach of contract and obtain restitution.
To sell a financed car with a lien on it, you must arrange for the lender to receive their money and release the lien. This is a routine process for finance companies. The buyer pays the finance company/bank directly. If the buyer owes more than the sale amount, the seller will pay the finance company/bank the difference. If the buyer is paying more than the seller owes, the seller will receive the difference. Once the seller and the finance company/bank representative sign the lien release and it is notarized, the vehicle title is clear, and it may be transferred to the buyer.
It is generally the seller's duty to celar up expired registration, but it may be used to negotiate a lower price wit the buyer. We suggest contacting the DMV to inquire about specific requirements in your situation.
See also:
http://www.ehow.com/how_6149662_sell-car-registration-expired.html
http://www.dot.nd.gov/public/licensing.htm
http://www.dot.nd.gov/divisions/mv/docs/faq-selling-a-vehicle.pdf
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.
