BDHo

hi guys.
need some help. sorry if this seems too logistical

im buying a older 911 that has a lien on it from capital one auto finance.
Seems the owner has stopped paying the loan and the car is about to be repossed in3 weeks.
Assume that if the lien is for $100 and I buy the car for $70, how does this work? I assume the seller has to give CapOne $30 to get the title? How long does it take to get the title released? How do i cover my risk during the interium period?

Would CapOne ever accept a reduced value as in this case, the auction value of the car is $60 and, in the scenario where it gets repossed, CapOne has "wrong-way risk" for the seller to be able to comeup with the remaining $40 to be made whole.
thanks so much.

DC from Cape Cod

Good luck stopping the repo process at this point. To answer your question, the seller would have to pay off the lien in full. If he sells it for less than the lien, he would have to make up the difference. If he doesn't pay of the lien, they will repo the car from you instead. I would find a different car or make him pay it off either in advance or in front of you somehow. I would not trust him to do so.

trophy

This is always a sticky one but one with a possible solution.

I would never pay a seller in the hope he then pays off the lien. The best thing to do (I have done this a couple of times) is to find out the amount of the lien and agree with the seller to pay that amount to CapOne (assuming it is less that what the seller is asking for the car) and the balance to the seller. You will need to work with CapOne and the seller in this case to enure is goes through smoothly.

EG: Seller is asking $100, Lien is $70. Pay CapOne $70 and the Seller $30, this will provide you with a car with a clear title.....

Regards

BDHo

in this case the loan is 'underwater' .. e.g. the sale price of the car is $70 and the lien is $100.
if i goto capone with $70 and the seller comes up with $30, what is the process to protect me in the interium?

air eater

There was a lengthy discussion concerning liens in a post recently.
Do a search and you'll get get more than enough opinions to consider.

trophy

In this case I would be walking into CapOne with the seller and have the payment made at the same time and ensuring before paying the money that the lien will be cleared.

Alternatively you could have the seller pay the shortfall and once proof pf payment is received from CapOne, you could then pay the balance. I would also have the seller "authorise" CapOne to provide information to you the buyer (this would have to be done in writing) you woul dthen be able to dela with CapOne and get information.

Warpig

If the seller is local to you and you can both visit capone together. If together you can come up with the balance on the loan. Have him sign the title over to you then when capone releases the title that is in their posession anyway. Capone will issue a lien release letter to him which will also leave capone with you and you are all set. Depending on your state if the title is present (capone should have it) and the lien is satisfied then capone may even release the lien right on the original title and you will not need a release letter. I know in Illinois there is a spot on the title for the lien holder to release the lien on the title. This way it can all be done right at capone.

Either way if you show capone you are feverishly working on trying to settle the debt they will not repo. It's when you do nothing and hope it goes away or when there is no other potential solution the repo man will come. Capone doesn't want your car... they want your money.

Nick

DC from Cape Cod

Does Capital One have branch offices?

JimPA

AFAIK, they have no branches. The HQ is in California and their operations center in Plano, TX. You'll have to deal with them through the mail. That makes it pretty hard to do some of the things others suggested. If you and the seller are in the same location, one option might be for both of you to put cashier's checks in one envelope to Cap One (yours for the purchase price, the seller's for the remaining loan balance needed to clear the lien allowing for mail transit time and extra days for the checks to clear). Obviously, you'd need an understanding with Cap One and a definitive payoff figure (allowing mail time) for this to work.

got*ki

Yuup. Remember now that the loan agreement is between Cap1 and the seller of the car. Cap1 has no obligation to you (as buyer of the car) upon satisfaction of the debt, as the original loan agreement is between Cap1 and the person who took out the loan. Cap1 could care less about who is buying the car, as their primary concern is getting payoff for the balance of the loan. Once the balance is satisfied, then the title goes to the party that they have the agreement with (seller of the car). UNLESS,....there is some type of payoff authorization release in writing from the seller to Cap1 that authorizes Cap1 to release the title to you. Something to the effect of "..upon satisfaction of the payoff amount, I hereby authorize Cap 1 to release the title to _______ (YOU). As procedures vary by institution, your best bet would be to call Cap1 and ask them what their policy/procedure is.

Another cautionary point is to make sure that the payoff amount is correct. Simple interest loans accrue interest charges on a daily basis. If the payoff quote amount is estimated for a certain day and the payment comes in later, the payment is (in theory) short and the loan is not considered satisfied because there is a balance, and the title is therefore not available for release.

As mentioned in earlier posts, the best way is to walk into the bank and make sure that the title is avaialble for immediate transfer upon full payoff balance.

Good Luck...

got*ki

If the loan gets to the point of no return and the car is repossesed, then normally the bank has an (ethical and legal) obligation to auction the car off to obtain the most money reasonably possible for the car. If they do not make a fair attempt to do so, then they expose themselves to unncessary risk/problems, should the delinquent loan party complain. Clear cut procedures are normally followed by the bank to minimize complaints and risk.

The bank's primary intent at that point is to ensure that their loan is satisfied and minimize any problems in the process. The bank couldn't just turnaround and sell it to a friend for a few bucks and then have the deliquent person make up the balance. Complaints would surely follow...



Good Luck!!

Rinty

I just handled the purchase of an encumbered Harley for my brother in law in Holland, and it was a lot of work. I did the payout by sending the seller's bank draft for the shortfall, and my lawyer's trust cheque, to Harley Davidson Financial Group.

My suggestion would be to give this car a bye, unless it is an unusual deal, and the buyer is both local and cooperative.

PorscheDoc

If he can't make payments on the car, how is he going to come up with the difference?

matt777

I was wondering that myself.

ilko

I would walk away if the repo man is involved. There are other cars out there.