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Old June 10th, 2018, 11:16 AM   #1
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Buying a bike with a lien?

So I found a good deal on a bike I've lusted after for some time but there's a catch as always. It's 3 hours away and the bike is under a lien.

Has anyone been in a similar situation? How did you handle it?

I'm assuming I would have to:

Pay for the bike and take possession of it. I'm guessing I couldn't ride the bike since I can't get insurance until I'm the official owner? So I'd need to trailer it?

Then wait for the owner to get the title from the bank and do a title transfer. I live in PA and I believe that banks will hold onto the title until the bike is paid for. They did when I got a loan to buy an FZ07 a few years ago.

Any help appreciated. As usual PA laws make buying a vehicle a huge pain.
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Old June 10th, 2018, 12:16 PM   #2
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General rule is don't do it. No deal is so unique that it's worth the trouble. Under no circumstances do you give the buyer any money without receiving an unencumbered title to the bike at the same time.

If you want to go through with it, it takes some trust in someone who has demonstrated they can't handle their financials properly - in a financial transaction. So you need to go to the bank with them to watch them pay off the loan, with the bank agreeing to send you the title as it comes through.
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Old June 10th, 2018, 12:32 PM   #3
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Don't pay the seller. Go with him to the bank, check the paper works and the title. Pay to the bank and then you have to wait for the bank to mail you the title.

Re riding the bike, I think you can insure it before buying it. I guess they only ask you for the VIN number, model and year. They don't care who owns the bike.
Trailer it always is the safest way.
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Old June 10th, 2018, 12:46 PM   #4
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Old June 10th, 2018, 12:58 PM   #5
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If the seller is willing to go to the bank, it means it's all legit.
Then you have the risk of the bank screwing you up with fees and all their hidden BS. LOL
Knock down the price until you feel is worth to take the risk.


Re the insurance, I remember AllState wrote my policy before I had the title. I didn't file any claim, though. And I'm in Florida. Don't know about PA
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Old June 10th, 2018, 01:22 PM   #6
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Don't pay the seller.
Yup, this. NEVER, ever, hand money to a seller with a promise of delivering a title later. A bill of sale means nothing, the bike isn't his to sell.

These kind of deals are almost never good. The seller made a bad decision and has more money tied up in the bike than it's worth. Generally they aren't smart and got ass raped in fees also. They have zero money to pay the balance of the market value of what the bike is worth.

In most cases I see the word lien and walk away.
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Old June 10th, 2018, 02:09 PM   #7
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Hmm sounds like buying a bike under a lien is worse proposition than I thought.

Maybe I should just be patient and wait for another deal as the season runs along. The bike is a Ducati Scrambler listed for 5k$. It's a good deal but I also noticed the bike needs it's 7500k service which is $1000.

So it's really a $6000 bike under a lien :/
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Old June 10th, 2018, 02:11 PM   #8
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If the seller is willing to go to the bank, it means it's all legit.
Then you have the risk of the bank screwing you up with fees and all their hidden BS. LOL
Knock down the price until you feel is worth to take the risk.


Re the insurance, I remember AllState wrote my policy before I had the title. I didn't file any claim, though. And I'm in Florida. Don't know about PA
PA is a big stickler about notaries and transferring titles. It can make buying bikes a hassle.
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Old June 10th, 2018, 02:11 PM   #9
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May just as well give the money to any random person who also does not own the bike.
Most often i have found these deals...all these deals to be dishonest sellers.

But yes if they'll go to the bank and sit with the loan officer and work it that way is the only safe path.

No shortage of motorcycles and good deals for me to gamble on a scam.

Good luck!
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Old June 10th, 2018, 02:12 PM   #10
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General rule is don't do it. No deal is so unique that it's worth the trouble. Under no circumstances do you give the buyer any money without receiving an unencumbered title to the bike at the same time.

If you want to go through with it, it takes some trust in someone who has demonstrated they can't handle their financials properly - in a financial transaction. So you need to go to the bank with them to watch them pay off the loan, with the bank agreeing to send you the title as it comes through.
This is what I was worried about. The bike is 3 hours away so I would need to make multiple trips to make that work.

Probably best to drop the idea.
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Old June 10th, 2018, 02:48 PM   #11
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May or may not be good deal depending upon how much is left on loan. One of my friends got 2017 ZX10R last year for $3000 ($1k to owner and $2k to bank).
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Old June 10th, 2018, 05:29 PM   #12
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3 hours away?

I wouldn't mess with it. If it was local and I could walk into the bank office, pay the loan off and they hand over the title I would consider it.
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Old June 10th, 2018, 05:54 PM   #13
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May or may not be good deal depending upon how much is left on loan. One of my friends got 2017 ZX10R last year for $3000 ($1k to owner and $2k to bank).
why so cheap? Nobody wanted it because of the lien?
It looks like the owner could have paid it off and then sell it for a more fair value.
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Old June 10th, 2018, 07:32 PM   #14
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why so cheap? Nobody wanted it because of the lien?
It looks like the owner could have paid it off and then sell it for a more fair value.
If the owner didn't have the $2k to pay it off and needed $1K badly for some other bills they do strange stuff.
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Old June 10th, 2018, 10:32 PM   #15
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Quote:
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why so cheap? Nobody wanted it because of the lien?
It looks like the owner could have paid it off and then sell it for a more fair value.
Quote:
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If the owner didn't have the $2k to pay it off and needed $1K badly for some other bills they do strange stuff.
Yep, i think guy got into more trouble and missed couple payments. Bank was going to repo and auction off for remainder of loan. Guy got desperate and sold quickly to get whatever he can before bank took over. Bike wasn't in best condition, however, was perfect specimen for track racing.
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Old June 10th, 2018, 10:46 PM   #16
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Didn't read the thread and I'm not going to. Just came to reply that I said aloud "don't," as soon as I read the title.
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Old June 10th, 2018, 11:43 PM   #17
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Originally Posted by Alex View Post
General rule is don't do it. No deal is so unique that it's worth the trouble. Under no circumstances do you give the buyer any money without receiving an unencumbered title to the bike at the same time.

If you want to go through with it, it takes some trust in someone who has demonstrated they can't handle their financials properly - in a financial transaction. So you need to go to the bank with them to watch them pay off the loan, with the bank agreeing to send you the title as it comes through.
Having a loan on a bike or anything does not mean that someone cannot handle their finances responsibly.
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Old June 11th, 2018, 12:10 AM   #18
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I'm not implying someone who takes a loan can't handle finances. I'm saying someone who is selling a bike because they can't pay off the loan has done something wrong along the way. The bike is underwater, they over-extended themselves, and it's highly unlikely this is the only place they've cut corners. In my mind, this means less likelihood of proper maintenance, more likelihood of the "cheap but who's going to notice" method of keeping a machine on the road, and more likelihood of problems down the road. People who sell cars/bikes with loans on them are either in a terrible bind, or or financially unaware that what they've done / are doing isn't wise. People who buy from them have a non-zero likelihood of the deal going south. Doesn't mean that great deals can't be had under any circumstance - but people should certainly go in with eyes wide open.
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Old June 11th, 2018, 12:25 AM   #19
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I'm not implying someone who takes a loan can't handle finances. I'm saying someone who is selling a bike because they can't pay off the loan has done something wrong along the way. The bike is underwater, they over-extended themselves, and it's highly unlikely this is the only place they've cut corners. In my mind, this means less likelihood of proper maintenance, more likelihood of the "cheap but who's going to notice" method of keeping a machine on the road, and more likelihood of problems down the road. People who sell cars/bikes with loans on them are either in a terrible bind, or or financially unaware that what they've done / are doing isn't wise. People who buy from them have a non-zero likelihood of the deal going south. Doesn't mean that great deals can't be had under any circumstance - but people should certainly go in with eyes wide open.
there is nothing in the main post that implies the seller cannot pay, you are making assumptions about something you don't know about. the facts are someone is selling a bike with a lien, nothing more.
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Old June 11th, 2018, 12:31 AM   #20
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Assumption with good reason - as anyone who would want to make more money from the sale would pay off the bike ahead of time. Threads like these illustrate why buyers have a hard time with these deals compared to a cash in hand / walk away with title deal. It depresses the selling price. There's no rational reason for someone to sell a bike this way unless they absolutely have to, which means there are plenty of assumptions that can and should be made.
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Old June 11th, 2018, 02:52 AM   #21
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Assumption with good reason - as anyone who would want to make more money from the sale would pay off the bike ahead of time. Threads like these illustrate why buyers have a hard time with these deals compared to a cash in hand / walk away with title deal. It depresses the selling price. There's no rational reason for someone to sell a bike this way unless they absolutely have to, which means there are plenty of assumptions that can and should be made.
Alex,
I have to disagree with this point. I have a 1.5% loan on my bike. Why on earth would I take savings that are making more than that to rush and pay off this bike?

Ive bought and sold bikes / car / and houses, all with liens. Its easy to your due dillegance in the process. As stated, go to his bank, pay them, receive a BOS and paper work. Likely they will get a power of attorney from you and apply for the title in your name. If your getting a loan to buy it then it bacomes a bank to bank transaction. Clean, hands fee, just have to arrange pick up of the machine.
People are to scared because they dont get educated in the process. The banks wont let things go south because they have legal responsibilities to fulfill.
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Old June 11th, 2018, 07:05 AM   #22
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Assumption with good reason - as anyone who would want to make more money from the sale would pay off the bike ahead of time. Threads like these illustrate why buyers have a hard time with these deals compared to a cash in hand / walk away with title deal. It depresses the selling price. There's no rational reason for someone to sell a bike this way unless they absolutely have to, which means there are plenty of assumptions that can and should be made.
I can think of several rational reasons to sell a bike while you still have a lien and owe money on it.

1. Bought Ninja 1000 as first bike and it scared the crap out of them, now they want a smaller bike. (had a co-worker buy a Hyabusa as his first bike, it came up for sale pretty quick)

2. Bought new bike, 6 months later get offered great job out of the country, can't bring bike with you. (I had this happen when I had 2 cars with liens on them that I had to sell)

3. Bought new bike, close riding buddy gets killed in accident and you decide to stop riding.

4. Bought new bike, meet girl, get married, she hates bike and starts bugging you to sell it. (had similar thing happen to my brother in law, but it was a boat not a bike)

5. Bought new bike, financed for 48 months, 24 months later you and wife decide to have baby, realize with baby around won't have a lot of time for riding so you decide to sell bike.

6. Bought new bike, rode it for 2 days and dropped it in a sandy corner. Got bike fixed and decided motorcycle riding wasn't for you. (happened to a former boss that bought a brand new Harley as his first bike)

Not saying bad financial decisions aren't more common than my scenarios, they may be. I'm just saying there are lots of reasons besides. You are correct to say you should go into the situation with eyes wide open, you should go into the situation expecting problems (not something I would deal with from 3 1/2 hrs away).
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Old June 11th, 2018, 11:50 AM   #23
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I did it once because my gut feeling about the guy was that while he was pretty clueless about the whole process, he was trustworthy. His bank didn't have branches in the state so I gave him the cash. He paid off the loan and sent me the title. Worked out for me. Wouldn't do it again though.
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Old June 11th, 2018, 01:24 PM   #24
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Alex,
I have to disagree with this point. I have a 1.5% loan on my bike. Why on earth would I take savings that are making more than that to rush and pay off this bike?

I’ve bought and sold bikes / car / and houses, all with liens. It’s easy to your due dillegance in the process. As stated, go to his bank, pay them, receive a BOS and paper work. Likely they will get a power of attorney from you and apply for the title in your name. If your getting a loan to buy it then it bacomes a bank to bank transaction. Clean, hands fee, just have to arrange pick up of the machine.
People are to scared because they don’t get educated in the process. The banks won’t let things go south because they have legal responsibilities to fulfill.
I'm not sure I'm getting my point across clearly. I'm not saying loans = bad. Heck - a loan at close to zero interest *is* likely a reasonable financial decision compared to paying it all in cash. That's not the question. The question is when going to sell that same bike/car 2 years in, with the loan still on it, do you try and sell it with a lien, or pay it off and sell it unencumbered.

Financially, the choice is easy at that point. The seller will make more money, and sell the bike/car much faster and easier with the title in hand. Selling with the lien in place costs the seller money. If the seller doesn't have enough $ to remove the lien at that point in preparation for the sale - they may have stretched themselves awfully thin on the initial purchase.

Going to the bank to get it sorted may be a great way to minimize the risk where possible, but with credit unions, and out of state banks, it may not be possible to take care of the process entirely without putting a significant amount of trust in the seller to go through with everything as expected on time.

I'd also separate the discussion from bike --> car --> house --> yacht --> jet. As one goes further to the right, it becomes less and less likely that a lien/mortgage is ever paid off. The financials of very expensive items are tied directly to the loans that facilitate ownership. It should be different (and simple) for almost all used motorcycles. It should be different for many used cars.
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Old June 11th, 2018, 01:27 PM   #25
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I can think of several rational reasons to sell a bike while you still have a lien and owe money on it.

1. Bought Ninja 1000 as first bike and it scared the crap out of them, now they want a smaller bike. (had a co-worker buy a Hyabusa as his first bike, it came up for sale pretty quick)

2. Bought new bike, 6 months later get offered great job out of the country, can't bring bike with you. (I had this happen when I had 2 cars with liens on them that I had to sell)

3. Bought new bike, close riding buddy gets killed in accident and you decide to stop riding.

4. Bought new bike, meet girl, get married, she hates bike and starts bugging you to sell it. (had similar thing happen to my brother in law, but it was a boat not a bike)

5. Bought new bike, financed for 48 months, 24 months later you and wife decide to have baby, realize with baby around won't have a lot of time for riding so you decide to sell bike.

6. Bought new bike, rode it for 2 days and dropped it in a sandy corner. Got bike fixed and decided motorcycle riding wasn't for you. (happened to a former boss that bought a brand new Harley as his first bike)

Not saying bad financial decisions aren't more common than my scenarios, they may be. I'm just saying there are lots of reasons besides. You are correct to say you should go into the situation with eyes wide open, you should go into the situation expecting problems (not something I would deal with from 3 1/2 hrs away).
Every one of those is of course a valid reason to sell a bike. And even more importantly, there is no judgment on what is a "valid" reason to sell. Heck, if someone wants to sell a bike because they don't like the color, and that's valid enough for them, there's no need to justify that decision to anyone at all.

But 5 of the 6 listed above are still great candidates for doing everything possible to remove lien prior to sale. If time is short (#2), there may not be any option other than trying to get whatever one can before hitting an immovable deadline - but that's the point, it will cost the seller money.
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Old June 11th, 2018, 02:04 PM   #26
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The lender will not release the title without complete satisfaction of the note. Period, end of story. Performing the transaction at the sellers bank gaurantees the title is clear, the transaction is “safe” from robery, counterfit bills, forged cashier checks.
You mentioned across state lines and far away transactions. That really doesn’t play a role in this. The banks (acting as your agent) know how to make it work. I bought my last bike in Seattle via pics on the dealers site. Talked to my CU, they got a buyers order, built the loan and sent me with a check to pay for it.

The process really is safer and easier than people make it out to be.
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Old June 11th, 2018, 02:48 PM   #27
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The lender will not release the title without complete satisfaction of the note. Period, end of story.
Where are you seeing a counter-argument to this? Of course the loan needs to be paid off before the lien is released.

Quote:
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Performing the transaction at the sellers bank gaurantees the title is clear, the transaction is “safe” from robery, counterfit bills, forged cashier checks.
You mentioned across state lines and far away transactions. That really doesn’t play a role in this. The banks (acting as your agent) know how to make it work. I bought my last bike in Seattle via pics on the dealers site. Talked to my CU, they got a buyers order, built the loan and sent me with a check to pay for it.

The process really is safer and easier than people make it out to be.
Buying from a dealer who can facilitate it with your bank is a different situation - better understanding of the process on all sides going in. Educating the seller on what they need to do to make this work is the main issue that all other issues sprout from.
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Old June 11th, 2018, 02:54 PM   #28
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Agreed, but that also say’s the a good deal on a bike is not immediatly nullified by the presence of a lien.
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Old June 11th, 2018, 07:54 PM   #29
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Every one of those is of course a valid reason to sell a bike. And even more importantly, there is no judgment on what is a "valid" reason to sell. Heck, if someone wants to sell a bike because they don't like the color, and that's valid enough for them, there's no need to justify that decision to anyone at all.

But 5 of the 6 listed above are still great candidates for doing everything possible to remove lien prior to sale. If time is short (#2), there may not be any option other than trying to get whatever one can before hitting an immovable deadline - but that's the point, it will cost the seller money.
It's kind of like the Ninja 250's I've bought for $250-$400 that needed there carbs cleaned or other minor things to get them running and then sold for $1,000-$1,500. The previous owners could have done the same thing, but they didn't. Some people don't have the money, some don't have the time, some don't have the smarts to do it. And many people just want to take the easy way out.
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Old June 11th, 2018, 09:14 PM   #30
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So I found a good deal on a bike I've lusted after for some time but there's a catch as always. It's 3 hours away and the bike is under a lien.

Has anyone been in a similar situation? How did you handle it?

I'm assuming I would have to:

Pay for the bike and take possession of it. I'm guessing I couldn't ride the bike since I can't get insurance until I'm the official owner? So I'd need to trailer it?

Then wait for the owner to get the title from the bank and do a title transfer. I live in PA and I believe that banks will hold onto the title until the bike is paid for. They did when I got a loan to buy an FZ07 a few years ago.

Any help appreciated. As usual PA laws make buying a vehicle a huge pain.
I've read all the responses here. As a former banker I can tell you that all banks operate in accordance with the federal Uniform Commercial Code - regardless of what state you live in. A buyer finances a motorcycle the buyer gets a title in the mail in his name with the bank's name on it a lienholder. Upon payment/satisfaction of the debt the bank mails a lien release to the owner indicating the loan was paid and satisfied. The owner can then submit his title to his department of motor vehicles along with the lien release and receive a "clean" title in the mail, or the owner can present the title and lien release to a buyer and the buyer gets an title in his name with no lien on it when he registers the bike. No title with a lien release - no payment for the bike. It is a felony to sell "chattle mortgaged property" - property with a lien on it.

Before you waste 6 hours of your time be sure the seller can produce the title with a lien release or walk away.

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Old June 12th, 2018, 08:02 PM   #31
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PA is a big stickler about notaries and transferring titles. It can make buying bikes a hassle.
This is true, Pa wants both parties at the notary office. What a pain. Arkansas simply does not care, I can sign the title myself in the Revenue Office and still walk out with a Registration. LOL

HOWEVER

If you are buying a bike from out of state, you can title it yourself with a good bill of sale and the owner signed on the title. I did this with 2 bikes bought from MD. Love this loophole. But that was 6 years ago, so you should call the notary if you ever try to do this.
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Old June 13th, 2018, 12:45 PM   #32
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Old June 15th, 2018, 02:32 PM   #33
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Old June 15th, 2018, 02:56 PM   #34
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Old June 22nd, 2018, 06:40 AM   #35
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Originally Posted by kdogg2077 View Post
So I found a good deal on a bike I've lusted after for some time but there's a catch as always. It's 3 hours away and the bike is under a lien.

Has anyone been in a similar situation? How did you handle it?

I'm assuming I would have to:

Pay for the bike and take possession of it. I'm guessing I couldn't ride the bike since I can't get insurance until I'm the official owner? So I'd need to trailer it?

Then wait for the owner to get the title from the bank and do a title transfer. I live in PA and I believe that banks will hold onto the title until the bike is paid for. They did when I got a loan to buy an FZ07 a few years ago.

Any help appreciated. As usual PA laws make buying a vehicle a huge pain.
It varies by state, but in Texas, the biggest problem is not dealing with the state, but rather the bank that has the lien. I've gone with a friend to look at a couple of bikes that were subject to liens, and in both cases, the reason he didn't buy them was that there was no way to do the "pay cash -> get title" thing you'd normally do with a Craigslist sale, regardless of whether we went to one of the bank's retail locations or not.

The sticking point being that the retail locations of most big chain banks don't actually have the titles, and they apparently don't have procedures in place for handling a situation like this, such that they could get them. They want the seller to pay the loan off, and then get the title in mail, at which point he can do whatever he wants with it. In order to overcome this, you'd have to trust the seller to sign the title and give it to you, weeks later, which is obviously a scary proposition, given that the seller is probably an idiot who didn't even consider this.

That said, if you can find out what bank actually has the lien, it may be worth calling them, explaining the situation, and asking if they can arrange to send the title to a specific retail location so you can do this. Some may actually be able to do it. I don't think it would be worth messing with for a Ninja 250, but if the bike were something really special, then it may be worth the hassle. You'd just have to get square with the idea of doing some of the seller's work for him, given that he's the one who should really be doing this kind of leg work.
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Old June 22nd, 2018, 01:02 PM   #36
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It varies by state, but in Texas, the biggest problem is not dealing with the state, but rather the bank that has the lien. I've gone with a friend to look at a couple of bikes that were subject to liens, and in both cases, the reason he didn't buy them was that there was no way to do the "pay cash -> get title" thing you'd normally do with a Craigslist sale, regardless of whether we went to one of the bank's retail locations or not.

The sticking point being that the retail locations of most big chain banks don't actually have the titles, and they apparently don't have procedures in place for handling a situation like this, such that they could get them. They want the seller to pay the loan off, and then get the title in mail, at which point he can do whatever he wants with it. In order to overcome this, you'd have to trust the seller to sign the title and give it to you, weeks later, which is obviously a scary proposition, given that the seller is probably an idiot who didn't even consider this.

That said, if you can find out what bank actually has the lien, it may be worth calling them, explaining the situation, and asking if they can arrange to send the title to a specific retail location so you can do this. Some may actually be able to do it. I don't think it would be worth messing with for a Ninja 250, but if the bike were something really special, then it may be worth the hassle. You'd just have to get square with the idea of doing some of the seller's work for him, given that he's the one who should really be doing this kind of leg work.
I like Texans "old fashioned"values but their business practices need to join the new millennium. I never heard of a financial institution holding the actual title. Do they still deliver mail by horseback?

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Old June 26th, 2018, 03:46 AM   #37
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I never heard of a financial institution holding the actual title.
As far as I know, the lender always holds the physical title *somewhere*, as they physically own the vehicle and need to be able to prove that fact should anything happen to it, just like the rest of us.

Same deal in OH AFAIK. My parents just went through the payoff and title mailing process with a car. Paid it and waited a few days for it to be mailed to them.
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Old June 26th, 2018, 05:21 AM   #38
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As far as I know, the lender always holds the physical title *somewhere*, as they physically own the vehicle and need to be able to prove that fact should anything happen to it, just like the rest of us.

Same deal in OH AFAIK. My parents just went through the payoff and title mailing process with a car. Paid it and waited a few days for it to be mailed to them.
Not in New York, New Jersey or Michigan.

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Old June 26th, 2018, 05:40 AM   #39
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Nope, in New York we get the title and it is printed with the lien's name on it.
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Old June 26th, 2018, 06:07 AM   #40
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Nope, in New York we get the title and it is printed with the lien's name on it.
That's right and the same for New Jersey and Michigan. I know because I've resided in all three states. I won't live long enough to try out the other 47 states.

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