selling a car

What is the name of your state (only U.S. law)? NC

We are selling our car to an individual via a private sale. We still owe a balance on the car and therefore do not have a title in hand. I want to do this this as safely as fairly as possible. If we draw up a bill of sale showing the following:
1. a statement (notorized) showing receipt of payment in full
2. a statement (notorized) showing the title will be forwarded upon receipt (we have been told 7-10 days)
3. a statement (notorized) showing the new owner being liable for any damage or problems and once he takes possession of the vehicle
4. proof of insurance by the new owner (we will obviously keep insurance as well until we transfer the title)

At this point is it safe to let the new owner take possession of the vehicle?

jml68 said:

What is the name of your state (only U.S. law)? NC

We are selling our car to an individual via a private sale. We still owe a balance on the car and therefore do not have a title in hand. I want to do this this as safely as fairly as possible. If we draw up a bill of sale showing the following:
1. a statement (notorized) showing receipt of payment in full
2. a statement (notorized) showing the title will be forwarded upon receipt (we have been told 7-10 days)
3. a statement (notorized) showing the new owner being liable for any damage or problems and once he takes possession of the vehicle
4. proof of insurance by the new owner (we will obviously keep insurance as well until we transfer the title)

At this point is it safe to let the new owner take possession of the vehicle?

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**A: do not sell unless you can deliver free and clear title. In other words, you get enough $$$ to pay off the car loan.

The loan will be paid in full, my question is what to do with possession of the vehicle during the days between "buyer pays us" and "we pay of loan in full and receive title". We cannot actually transfer title until we have paid off the loan. If he pays us today and we pay off loan tomorrow, we should receive the title by Monday. Who gets possession of the car until then???

jml68 said:

The loan will be paid in full, my question is what to do with possession of the vehicle during the days between "buyer pays us" and "we pay of loan in full and receive title". We cannot actually transfer title until we have paid off the loan. If he pays us today and we pay off loan tomorrow, we should receive the title by Monday. Who gets possession of the car until then???

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Ownership is with the title ONLY.

Ideally, you could go down to the credit union or a bank and get a short term loan on a line of credit, use those funds to settle the car loan, then repay that credit line with the buyers money that you do not accept until the title is ready and you do the deal in one shot. No holding money or holding cars.

jml68 said:

The loan will be paid in full, my question is what to do with possession of the vehicle during the days between "buyer pays us" and "we pay of loan in full and receive title". We cannot actually transfer title until we have paid off the loan. If he pays us today and we pay off loan tomorrow, we should receive the title by Monday. Who gets possession of the car until then???

Click to expand...

I've gone through this twice (once as a seller, and once as a buyer). both times were handled the same way: The other party and I met at the lender's office, paid off the loan, and title was immediately given to the buyer.

You don't have to do it that way, however. Once you have the funds, then you should give the buyer the car. In fact, if I were the buyer, I would not give the funds unless I was going to receive the car. The title can be given at another time.

The signed contract and receipt of the exchange of funds is enough to protect the buyer if you were to later refuse to send the title. In other words, he would have enough evidence to win a lawsuit against you if necessary. At the same time, if he were to wreck the car before you gave him the title, you'd have enough evidence to conclusively prove that he was the owner of the car.