Van Nuys, CA asked in Consumer Law for California

Q: How do I best protect myself so that if I pay a part owner of a car with lienholder on it, that I get the title?

He needs the money that someone pays to pay off the car. He said that we could call the lienholder together, and they could send him documentation stating the balance is now 0 and that he is the legal owner. However, I do not know if that documentation is good enough. We then discussed he would write me a bill of sale. Would that bill of sale be sufficient to qualify me as the legal owner of the car, or would it only be once the car is registered with the DMV under my name?

I would like to buy the car but want to make sure that I protect myself.

How can I best do this? I would like to draft up a letter of agreement before I even give him the money stating what the money is exactly for and what steps would occur after he receives my money ( ie: the money in the amount is to pay off the vehicle _ with the VIN number, once it is paid to the lienholder, he receives

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2 Lawyer Answers
Daniel Timothy LeBel
Daniel Timothy LeBel
Answered
  • Consumer Law Lawyer
  • San Francisco, CA
  • Licensed in California

A: When manufacturers buy back "lemon" vehicles, they often ask the consumer to get a payoff quote from the lender prior to the exchange. There's no real legal right for the manufacturer to do this written into the statute, but the car company has the money and the consumer has the "lemon," so the manufacturer has that leverage.

At the time of the exchange, referred to as a "surrender" in California, the manufacturer will payoff the balance of the loan directly to the lender, with any overage going to the consumer. The consumer receives a second check for the payments already made, statutory penalties (for failure to promptly repurchase the vehicle, and incidental damages. And, of course, the required transfer documents are executed by the consumer surrendering the vehicle.

You could follow this same process in your private purchase: get the payoff amount, payoff the loan directly, and provide the balance of the agreed price to the seller. This would resolve the concerns you have about the seller's actions after you've paid the agree price.

Maurice Mandel II
Maurice Mandel II
Answered
  • Consumer Law Lawyer
  • Newport Beach, CA
  • Licensed in California

A: Your best protection is to have the leinholder sign off the pink slip. You get this at the time of the transaction. Any thing else you are at risk for losing your money and not getting the car.

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