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Q: Selling Car - Need to Pay Off Loan, Tranfer Title ( Answered 5 out of 5 stars,   1 Comment )
Subject: Selling Car - Need to Pay Off Loan, Tranfer Title
Category: Miscellaneous
Asked by: mikedavies-ga
List Price: $10.00
Posted: 21 May 2003 11:07 PDT
Expires: 20 Jun 2003 11:07 PDT
Question ID: 206866
I am trying to sell my car.  At the moment, I have a lein against it,
and owe about $15,000 to the bank on it.  I am trying to sell it on
the private market, but don't know how it works with the money - I
will have to give the money to the bank in order for them to release
the title to me.  What is the common way of doing this if I need the
buyer's money to pay off the loan?

Further, I live in New Jersey, and am selling the car in New York. 
With regard to the title (which is an NJ title) - does this matter? 
How do I officially transfer the NJ Title to someone living in New
Subject: Re: Selling Car - Need to Pay Off Loan, Tranfer Title
Answered By: bitmaven-ga on 21 May 2003 12:26 PDT
Rated:5 out of 5 stars
Dear mikedavies-ga: 

    I managed to find a few helpful resources on your lien-transfer
issue.   First, NJ has some amazingly helpful links on title transfer
and liens that I've included below.   They also have a good help desk
for answering title related questions.   When I called them, I ended
up speaking to one of their customer service reps, Marsha, who clued
me in on what you need to do.

     First, in order to transfer valid title in NJ, you need to get an
authorization letter from the lienholder, giving the ok to transfer
the title.  You need to let the lienholder know who your future buyer
will be, as well as terms of the agreement (including payment).  I
would suggest contacting your lienholder (the bank) and finding out
what kind of arrangements could be made.   You didn't provide that
information, otherwise I could have saved you the step.    More than
likely, the lienholder will require some sort of assurance from you
that you'll pay them the money accordingly, post-sale.

     When you get the assurance, have the lienholder make a copy _on
their letterhead_ and send it to the NJ DMV.   I found this directly
on the NJ lien page, and thought their instructions (and address!)
would be helpful for you.  If the lienholder won't directly send this,
you can get a copy from them, and send the DMV a copy yourself.   The
letterhead is important, as is the signature.  As Marsha let me know,
the whole point is to let the lending institution know who has the

Q. How can I satisfy a lien on a vehicle?

A. Send a letter on lienholder's letterhead to Motor Vehicle
Commission Data Output – Title Records Section, 225 East State Street,
Trenton, New Jersey 08666. Provide the year, make, vehicle
identification number, name and address of the vehicle owner, and a
statement that the lien was satisfied. The letter should be signed by
an authorized officer of lending institution.

Important:  After the title is transferred, you need to remove the
license plates and returned to the DMV.

At that point, provided you've paid off (or gotten other assurances
from the lienholder), the buyer must then register with the DMV in NY.

You must provide them with the following information, as per the NY
DMV Website, and the customer service assistant,  Diane, at the NY

Proof of ownership. Provide the new owner with acceptable proof of
ownership. Make sure that you complete the odometer and damage
disclosure statements on the back of the title certificate or on form
MV-103. Complete the proof of ownership document carefully. The DMV
does not accept a title certificate or another proof of ownership
document that indicates the information or signatures were changed or

Proof of purchase price or gift. Use form DTF-802 (Statement of
Transaction for Sales Tax) to show the purchase price of the vehicle
or that the vehicle is a gift. The seller or donor completes the
affidavit on page two of the form and gives the form to the new owner.
The new owner completes the first page of the form and gives the form
to the DMV office. The DMV office collects the sales tax from the new
owner if the new owner is required to pay any sales tax. If the new
owner applies for an exemption from NYS sales tax for a reason
different from a gift, use form DTF-803 (Claim for Exemption). -- This
may not be applicable to you, you're selling for a purchase price.

The NY DMV has this form available online, if you want to sign that
form as a bill of sale with the office.  The person who registers and
titles in NY will pay the sales tax.

Lien. If there is a lien listed on the title certificate, give the new
owner the original document from the lienholder that proves that the
lien is satisfied. Keep a copy of this document. The new owner must
give the original proof to the DMV. The DMV removes the lien when the
new title certificate is issued.

If your title still shows a lien listed, you must give a copy of this
to the buyer, as well as the statement of authorization by your
lienholder saying that the lien was satisfied.   (Basically, you need
to duplicate what you've done in NJ).

Also, seeing as you are a private buyer, I thought this might be
useful for the general contract-aspect of your transaction.

If you are paying more than $500, you should have a written contract.
An oral contract to sell a car for over $500 may not be enforceable.
Even under $500, it is always best to put the contract in writing if
you are not going to conclude the deal immediately with a Bill of
Sale. Many states require you to present a Bill of Sale to register
your car. A Bill of Sale also may serve as a receipt. The Bill of Sale
should contain the: date of the sale; year, make, and model of the
car; Vehicle Identification Number (VIN); odometer reading; a
statement of the car's condition; amount paid for the car, and in what
form (cash, check, and the like); and buyer's and seller's names,
addresses, and phone numbers. The seller should sign and date the Bill
of Sale, and both you and the seller should get a copy.

I hope this was helpful.  As always, I urge you to contact the bank to
find out what their terms are -- these are questions that can only
really be answered by them, without more.   Good luck, and happy


Search Terms:  "Title" "transfer" +NJ

"Title" "transfer" +NY

"lien" +NJ


Request for Answer Clarification by mikedavies-ga on 21 May 2003 13:14 PDT
Thanks a ton for this wealth of information.  It helps me greatly.  I
guess my real problem is that if you have a loan in NY and own a car
in NJ, the leinholder holds the title - I do not have it.  Any ideas
about this?  If this is a different question now, please let me
know... Mike

Clarification of Answer by bitmaven-ga on 21 May 2003 13:23 PDT
Thanks for the rating :)  

Er, I'm a little confused here.  Let me see if I can break down what
you're asking:

If (the buyer) has a loan in NY (to purchase the car?)  and owns a car
that was purchased in NJ (your car) does the lienholder hold the

The lienholder will only hold the title if the buyer agrees to take
the title with its encumbrances -- including the lien.   I don't think
this will actually work -- given the requirements of good title that
are required by NY and NJ.

Am I totally missing the mark with this ?   I'm starting to see this
edge into a new question.  If you want to continue it on the same
ticket, I suppose with a little more information (and maybe a good tip
:-)  I could give you whatever else you're looking for.  Let me know!


(Also, if you're asking about what to do with the specific lienholder,
you may want to contact them.  I don't know how useful a researcher is
going to be in getting an assurance from your bank on whether or not
they accept the cash after the title has been transferred or not. 
THis is a contract issue, and needs to be discussed with the
lienholder. )

I guess my real problem is that if you have a loan in NY and own a car
in NJ, the leinholder holds the title - I do not have it.  Any ideas
about this?  If this is a different question now, please let me
know... Mike

Request for Answer Clarification by mikedavies-ga on 21 May 2003 13:28 PDT
Umm... no, but I think I'm the one being confusing.  

Here is my deal:

I took a loan to buy my car in the first place.  They have the title
to my vehicle which I am trying to sell.  (The reason for this is
because I live in NJ, and the loan was taken with Sperry Federal
Credit Union in NY).

I am trying to sell my car now, and don't know how to if I am not in
possession of the title and don't have the $ to pay off the loan until
I get the $ from the buyer.

All the other stuff about title transfer is very helpful, but first, I
need to know how to sell a car which has a title I don't physically
possess (I do have a copy of it though).

Thanks again, Mike

Clarification of Answer by bitmaven-ga on 21 May 2003 14:02 PDT

    This is going to sound useless, but basically, you need to contact
them.  Because it's something you've set up with the bank, I don't
know what specific provisions lie in the terms you've agreed to, with
regard to transferring title.  I'd reccomend calling them, and talking
to one of their loan officers.  Generally speaking, all you need to
transfer title in NY or NJ, is a title assurance by Sperry.   How you
go about acquiring that (i.e., will they grant an assurance before
full payment, or must they have the full ammount) is something that
really only they can answer.   Their Info desk is helpful:

Their contact information is: 

For personal Membership Services call our New York office Mon-Fri
9:00am to 4:30pm at 516-873-7171, or our Virginia office Mon-Fri
8:30am to 4:00pm at 571-203-8730. For toll-free service, call
800-676-5512 outside NYC/LI

Short of that, or the buyer willing to accept no title to the car, I'm
afraid your options are limited.

mikedavies-ga rated this answer:5 out of 5 stars
Very thorogh...

Subject: Re: Selling Car - Need to Pay Off Loan, Tranfer Title
From: ddelphi-ga on 21 May 2003 12:41 PDT
It is always a good idea to put the phrase "This vehicle is sold as
is, where is" into the contract or bill of sale.  That way, if
something does go wrong with the car, the buyer cannot then come back
to you for redress.

Be sure to keep a copy of everything for your files.

Bought a few...sold a few.  - ddelphi

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