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Car Lien Question

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Bunovitch

Guest
Minnesota

I recently had some work done to my car which resulted in expenses I was unable to pay all at once. The mechanic agreed to let me pay on a monthly basis after putting a mechanic's lien on the car while I retained the use of my car. I have been paying the agreed upon (in writing) payment faithfully; I recently had to bring the car to him once again, thinking that it was something related to what he had already done (the engine was practically reworked in full) While my car was there, the shop sustained a fire, although my car was not damaged in the blaze. Now the mechanic is hurting for money until his insurance comes through and what he wants me to do in order to retain use of the car again is to place him on the title as a lien holder for the amount that I owe him for the repairs. He said upon completion of paying for these repairs he would give me a lien release. He said he wants to do this so he can borrow money from the bank to offset the cost of financing me because his cash flow has been severely depleted due to the fire.

The guy seems to be trustworthy, but I'm by nature a little skeptical of situations like this so I wanted if anyone with much more expertise on this subject could tell me if this is legal or if this is something that I *should* agree to?
 


HomeGuru

Senior Member
Bunovitch said:
Minnesota

I recently had some work done to my car which resulted in expenses I was unable to pay all at once. The mechanic agreed to let me pay on a monthly basis after putting a mechanic's lien on the car while I retained the use of my car. I have been paying the agreed upon (in writing) payment faithfully; I recently had to bring the car to him once again, thinking that it was something related to what he had already done (the engine was practically reworked in full) While my car was there, the shop sustained a fire, although my car was not damaged in the blaze. Now the mechanic is hurting for money until his insurance comes through and what he wants me to do in order to retain use of the car again is to place him on the title as a lien holder for the amount that I owe him for the repairs. He said upon completion of paying for these repairs he would give me a lien release. He said he wants to do this so he can borrow money from the bank to offset the cost of financing me because his cash flow has been severely depleted due to the fire.

The guy seems to be trustworthy, but I'm by nature a little skeptical of situations like this so I wanted if anyone with much more expertise on this subject could tell me if this is legal or if this is something that I *should* agree to?
**A: how much money are we talking here and do you live in a small town?
 
B

Bunovitch

Guest
$2,565 is the current total. And no, actually I live in a suburb of Minneapolis but the shop is located farther out. It is a small shop. Maybe I should also mention that this mechanic is the nephew of my husband's cousin (by marriage). So he's not exactly *family*, but close enough to where if he screws me over there might be some repurcussions, at least relationship-wise.
 

HomeGuru

Senior Member
Bunovitch said:
$2,565 is the current total. And no, actually I live in a suburb of Minneapolis but the shop is located farther out. It is a small shop. Maybe I should also mention that this mechanic is the nephew of my husband's cousin (by marriage). So he's not exactly *family*, but close enough to where if he screws me over there might be some repurcussions, at least relationship-wise.
**A: what is the estimated book value of your vehicle?
 

HomeGuru

Senior Member
You need a new car. Once he takes title, he will use the car as collateral for his loan then you will have problems with the loan as it is not your loan but your car. How will the loan be repaid? Are you going to pay if with the money that you owe him? How much is he going to finance using your car as collateral and will the lender be using a blanket mortgage ie. using other assets as collateral? If that is the case, will the lender release the car even if his entire loan is not repaid? And what happens if the insurance money takes a year to settle or the insurance company decides not to pay?
 
B

Bunovitch

Guest
I tend to agree. (particularly about needing a new car) I knew there was a good reason I felt completely uncomfortable with this and I hadn't even considered the lender using the car as collateral and not releasing the lien in the event he decides not to pay the loan back. I will speak with him about this but at this point I think I'd rather have him keep the car and charge me storage until I can pay him back in full (which should be sometime early in 2004)

Thank you for your help.
 

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