🚀 go-pugleaf

Russ Poffenberger writes:

>But if the owner has a loan on the car, then he DOES NOT have the title. The
>lienholder (the bank that carries the loan) has the true title.

This isn't right.  I don't see any reference to a "true" title in the
CVC.  There is (or should be) one and only one title to a vehicle.
The owner's name appears on the title and so does the lienholder's
name.  The lienholder must release his or her interest prior to
transfer of ownership of the vehicle by signing the title in the space
provided.

Some lienholders retain possession of the title, some don't.  That doesn't
affect anything, though (other than the obvious:  they probably won't give
the title back to the owner until the lien is settled).

>The bank must
>be paid off first, then they will mail the signed over title to the owner.

OK, if they had possesion.

>Typically, when a loan on a car is paid off, you must go to the DMV within
>a certain amount of time and have the title transferred.

Source, please?  I've never heard of this.

> I am not sure if this
>is necessary before selling by the owner, or if the bank signed title can be
>transferred to the new owner directly.

It's not necessary:  the new owner can apply for a new title with the one
signed by the lienholder.

>In any case, there is a catch-22 here. I don't know what the best way to do
>it is to avoid problems.

The only way I know of to protect the purchaser is to insist that the
seller pay off the loan before handing over any money for the vehicle.
If the seller can't do this, it might be possible to 1) get title from
seller if lienholder does not have it, and 2) deliver that and money
directly to lienholder, with some means for assuring that the title
(with all signatures) is then given directly from the lienholder to
the purchaser.  If the lienholder doesn't want to deal with the
purchaser, I'd call off the deal.  One of my standard questions as a
potential buyer is "do you have clear title to this vehicle?".

Do escrow companies handle this kind of transaction?  Or do they stick
to real estate?

to accept the universal responsibility of doing | David L. Levine
good to all sentient beings, and if that is not | Internet: levine@ics.uci.edu
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