Financing car for buyer
Date: Sun, 11/12/2006 - 08:35
Depends on your state, but in general... 1) You need a bill o
Depends on your state, but in general...
1) You need a bill of sale showing sale from owner to buyer, and it usually has to be notarized;
2) If you are financing it, you need to draw up a promissory contract and it needs to have a security agreement in order for you to legally have a security interest in the collateral;
3) If you plan to charge interest, it needs to be within legal codes. (ie you may be able to charge 5%, but to charge 10% in your state you might need a loan license.)
4) On the title, you would sign off as a seller and usually put the buyer's info on it.
5) Fill out an application for title and registration for the buyer; list your name and address as a lienholder.
6) Bring the title, title application and required fees to a currency exchange or DMV and submit the application to the secretary of state.
7) There is no room for error. If you don't fill out the title application correctly, the Secretary of State will reject it and you won't have a perfected lien on the vehicle. Also, if you don't have a good contract with security agreement, you run the risk of the buyer being able to assert a positive defense if you ever need to go to court.
8) You should also make sure the buyer has insurance, and list yourself as a lienholder on the insurance policy. That way, if the insurance is cancelled you will get a notice of cancellation.
