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No title…No sale?

Many states including Arizona are title holding states.  This means that until the loan (lien) is paid off the lender (lien holder) keeps the title.  So suppose you want to sell your vehicle before you have paid off it off, how do you provide a title to the buyer?  Because after all, what can they do without a title?  Nothing would be the answer, unless you do the following:

Explain to the buyer that you still owe on the vehicle and the following will ensure that they will indeed get the title for the vehicle.  Now, if the buyer is also getting a loan, their lender will do all that I am going to explain as they will make double sure that they have the title in their possession at the end of the buying process.  You will just have to go to the buyer’s lender and sign some documents, surrender the car and the keys and magically you are relieved of the vehicle (and payment).  I still recommend checking your loan balance daily to see that it zeros out, that should happen within a week.  I also recommend that you contact your lender and let them know what is going on, especially if there a an upcoming payment due within the next 10 days or so.

Okay, what if the buyer is a cash buyer?  Do the following:

Complete a bill of sale, having it notarized offers another layer of security, your MVD web site should have these on line or do a web search to find one.  Most states are “as is” by default, I always like to specify this in the bill of sale anyway just to eliminate questions/problems in the future.

Have the buyer make out a cashiers check to your lender with your account number on the check.  If you owe you must also make a second cashiers check for the balance (10 day payoff provided by the lender).  If you owe less, ask the buyer of 2 checks, one to the lender and the balance to you.

Give the buyer a notarized Power of Attorney specific to the vehicle that you are selling, you can prepare this ahead of time.  The MVD web site should have these available on line.

Prepare a payoff authorization to send to your lender explaining that you are wanting the checks to be applied to your loan and to send the title to the buyer.  My experience it that about half the time they will and half the time it will come to you anyway.  Ni worries, you can get the title to the new owed later.

Pay for a 30 or 90 day temporary permit in the buyers name that will allow them to drive the vehicle until they do have a title (that will then allow them to register and legally drive the vehicle). These can be obtained at the MVD or a private vehicle license titling service.  Why should you pay?  It is not the buyer’s fault you don’t have the title and it is a nice gesture to make the process a little easier for the buyer.

Turn over the vehicle and the keys to the buyer.  Explain to them that your next step is to overnight or second day air the payoff to your lender (offer to let them come with you, sometimes buyers are very concerned that you are still trying to pull a “fast one”).

Finally, overnight or second day air the payoff to the lender.  Be sure and get a tracking number and make sure that you have the payoff address for the lender.  This is often a different address from where you are making your payments.  I also recommend including a statement with your check (s) and other documents.

Congratulations you have sold your vehicle!

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