buying car from a private seller..

Buying from a Private Seller

I have bought several vehicles from private parties where they still owed money on the car. The first time, the bank was local and I met the seller at the bank, paid the bank in cash and had the title transferred into my name and then paid the seller the balance (at the same time).

In the second instance, the bank was not local and this wasn't possible. So, I asked to see a pay-off balance for the guy's loan, sent a money order in to the lender (GMAC) with a copy of the Bill of Sale (keep a copy for your records as well), with BOTH of our signatures on it and a photocopy of his driver's license with instructions to mail the Title/Pinkslip to me, as the new owner.

You can always call the guy/girl's lender and ask what their specific procedures are for obtaining the title in your state. Make sure you have a SIGNED Bill of Sale from the seller and keep several copies. I actually photocopy the sellers Driver's License, as well as mine, at the bottom of the Bill of Sale when I make copies, but I'm just anal.

Also, make sure you submit the "release of liability" form to the DMV stating the date of transfer of ownership. My friend just sold his car and, according to the police, it was used in a "crime" several weeks later. The police are expecting him to pay for property damage.

PS - CarFax is not perfect. My Mustang had a clean bill of health, but the previous owner showed me pictures of an accident that she had been in that was repaired by the local Ford autobody shop.

IF the accident wasn't reported to the cop it won't show on carfax report.