🚀 go-pugleaf

levine@liege.ics.uci.edu (David Levine) writes:
: 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.
: 

There is a "registered" owner and a lienholder. The registered owner is the
person who bought the car. As with any kind of secured loan, some form of
collateral is necessary to secure the loan. For a car loan, the car itself
is the collateral.

The lienholder has legal rights to tha car. If you fail to make payments,
they will re-possess the car. They have every legal right to do so. In effect,
they are the true financial owner of the car.

: 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).
: 

I have had several car loans with several different banks/lending institutions.
These include

Bank of America.
Ford Motor Credit.
Chrysler Credit.
Western Financial Credit.

In EVERY case, they retained the actual physical title of the car. They would
sign and return it to me when the loan was paid off. Any institution that did
not do this is asking for trouble.

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

Even if the owner kept possession of the piece of paper, as long as there is
a lienholder listed on the title, it CANNOT be sold or transferred without
being signed off and released by the lienholder.

: >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.
: 

The CVC states that any change of title or ownership must be registered with
the DMV. I don't know the actual section. Maybe someone on the net can look
it up.

: > 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?
: 

Not that I know of. My wife does escrow, they are usually limited to real
estate transactions.

Russ Poffenberger               DOMAIN: poffen@sj.ate.slb.com
Schlumberger Technologies       UUCP:   {uunet,decwrl,amdahl}!sjsca4!poffen
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