Came across a bike in Missouri, Quick Title and Lien Q's...

[phatjoe]

Hello,

I'm hoping some Missouri residents, and/or folks familiar with titles/liens can answer my question.

I came across a bike I like in Missouri. The owner has the title in hand, and the bike is currently being financed. This is a little bit different than IL. In IL the bank/finance company holds onto the title until the loan is paid off (afterwards, they release the title to the owner).

I've never purchased a bike from someone who has the title in hand AND with it still being financed. Is there anything I need to look out for?

If the Missouri Title indicates the bank as the "owner", the IL DMV will probably give me a hard time. I can call the Missouri DMV, but not sure what to even ask them.

THANKS!!

[Blackey]

I bought a car from another state that was financed. Dude paid off the loan with proceeds from the sale at the bank. Bank the request for title to be signed and delivered.

With your situation, if the lender has local representation and the seller pays the lender, then someone from that lender signed thus releasing interest, then you could transfer. Barring that, there is nothing to prevent the seller from taking your money, not paying the loan, and the lender still having title to the bike.

[NJDEVIL]

I sold a bike that was still financed. I let the buyer know upfront that it would be paid off from part of the sale money. I wrote up a contract and when he came to pickup the bike with payment we went to a local notary and we both signed and had it notarized. One copy for him and one for me. I overnighted the payoff to the bank then about a week for the bank to send the title. I then signed the title over and overnighted it to the buyer-done deal. I would not do anything without a contract and if you make payment take the bike and the contract at that time.

[Zoom]

I've bought cars in a few different states and I've never seen one where the finance company lets you keep the title for the vehicle before the loan is paid off. They always need some kind of collateral and the title is it.

Some car title loan companies will let you keep the title, but they aren't loaning you the full amount of the vehicle. And they charge exorbitant rates which makes up for the few loans they have defaulted on.

[TRod]

If he has it in hand, and the bike was used for collateral for the loan, then the title should have a lien from the bank stated on it. Until the bank releases that lien, it will always be attached to it and I doubt that the DMV will process it for transfer until it's been released.

If the bike wasn't used for collateral for the loan, and there is no bank lien on the title, then there won't be any issue with transfer to your name. But, if there is a lien on the title, I would not give him one cent until that title is cleared of the lien.

[BigpapaM109]

Owner has title in hand but a lien on it. If you look at the title, there is a section for lien holder and his banks name will be there. Once it is paid off he would get a title free and clear.

[Nitrogary]

OR...you could simply meet him at his lien holders place of business and pay off his title in person and give him the rest of the agreed upon amount....then the lien holder will sign off the title and you all walk away happy.

shouldnt be too difficult. sounds like he is an honest guy or he would simply tell you his title is clear and take your money leaving you to find out the bad news later that there is a lien on it !

[phatjoe]

Thanks everyone for the responses!

It seems pretty straight forward...

[chesshine5000]

If you don't see the lien info on the title, it is also possible that the guy obtained a personal loan to purchase the bike. Some people do this if they don't want to have to pay for full motorcycle coverage. So he may still owe on the bike, but as long as the title doesn't have any lien info on it, he is the one that is solely responsible for the loan amount. So he could take your money and spend it on cotton balls, and you would still be ok, it is up to him to pay it back. I bought a bike with a personal loan before, the rate is a bit higher, but the title is yours. Just a thought.

[Slanky]

They can have the title if it was a personal loan. I financed a bike through American General and the seller/shop gave me the title the same day. The money was sent directly to the seller. I thought it was strange that I got the title and the bike was financed. When I got the payment book I noticed it was a personal loan, but the title was clear and free from a lien.

[MATT'sADDICTION]

Not much new to add from what's already been stated. Only to clarify why the title may sometimes be in physical possession of the lienholder and at other times be in possession of the owner. Each state's laws dictate this policy, with the majority having the lienholder retain possession of the title. Regardless, as mentioned above, the title will have a designated space where a lienholder identifies itself. Each state's MVD/DMV will recognize the lien and not issue a new title until their is a valid lien release.

FYI, you can sell an auto to someone and personally carry the note by placing your name in the lienholder location. You can do this at the MVD. The title will be clouded until you personally release the lien. This can work well with your kids, too. Helps them understand who is in control, yet provides an incentive to get Mom/Dad's name off their title.

Bottom line, until there is no entity in that designated space, or a valid lien release, the MVD is not going to issue a clear title. However, with today's technology, it is very easy to arrange with the lending institution and be protected in your personal transaction. If you like the bike in Missouri, just make a phone call or two, and you will be able to arrange for a payoff and lien release. The first call I would make would be to MO MVD to verify name, lien, and Vin on the title.

Hope this helps a little.

MT

PS: if you are curious whether your state or another is a title holding state, check here:
http://www.allabouttitles.com/TitleHolding.aspx
After looking at the map, evidently, one state, Kansas, actually holds the title electronically until the lien is released.

[tmpc159]

I'm also in il and have bought many cars, bikes in mo. If there is a lein holder on the title, it's useless without a letter from the lein holder releasing the lein. As long as you get a notorized letter from the seller releasing the lein you will be good to go at your local DMV.

[No Mas]

You have to get a lien release from the name or entity that is is on the lien holder line of the title. In MO. you will get the title mailed to you in your name as the owner but the lien holder is named on the title if there is one. Years ago you wouldn't recieve the title until you made the last payment and the bank had the title and would release it to you.

[phatjoe]

I asked him to send me a photo of the title...there is a lien on the bike. Below is the picture. It's hard to read, but under the line "First Lien" it indicates HSBC. It's just easier if there wasn't a lien...oh well no biggie. Thanks for everyone who replied to this thread. There were a few steps mentioned that I had not considered to take with him. Very cool forum!

[BAD BOY M109R]

You have to get a lien release from the name or entity that is is on the lien holder line of the title. In MO. you will get the title mailed to you in your name as the owner but the lien holder is named on the title if there is one. Years ago you wouldn't recieve the title until you made the last payment and the bank had the title and would release it to you.