IXI187IXI

iTrader: (3)

I have a question regarding auto loans. I'm in the process of selling my car however I was told today by the potential buyer that since the payoff amount for my car is less than the price I am selling the car for that the bank the buyer is using will only give him a loan for the payoff amount and he would be responsible for the rest balance. Does this sound right? To me it doesn't make much sense. I would think if the selling price is blue book value, that's what the bank would look at.

If that's true about only being able to get a loan for the payoff amount, is there a way the buyer could make up the difference if they didn't have the amount of cash for the balance? I don't know how this stuff works and everything is closed now and I'd like to get this deal done as soon as possible. Any help would be appreciated.

AZDesertGS

iTrader: (4)

The buyer might be confused....the bank was probably telling him that they will only give him a loan for the blue book value or whatever % of blue book value. Your payoff has nothing to do with what the bank will loan. So if your payoff was $59....that's all there gonna give him a loan for? Buyer is confused IMO.

caddyowner

I think the buyer is trying to get you to drop the sale price to something closer to what you owe for the car. He probably figures the amount above what you owe is gravy and you won't mind parting with some or all of it to sell the car quickly. Stick to your agreed-upon price. You do have a sales agreement signed by both of you, right?

IXI187IXI

iTrader: (3)

That's what I'm figuring too. My payoff should have nothing to do with his loan at all.

Yes I have a bill of sale for the agreed price signed by both of us.

LIMS407

IXI187IXI, why u leavin us??,,

J.P.

He could be trying to get the price down but banks cutting checks to private sellers is tricky sometimes.

Maybe the bank is thinking you have a deal worked out to sell the car for more than the note and you kick him back some cash etc and now the loan \ risk is higher for the bank?

IXI187IXI

iTrader: (3)

I don't drive the car anymore so I can't justify paying for something I don't drive. If it does sell, it will be coming down your way.

The bank would be cutting a check to my finance company since there is still a lien on the car. I don't know something about this just sounds funny. I plan on calling his bank tomorrow to talk to them. It's funny because a week ago he was approved for the asking amount, the amount we agreed on. Now he's saying the bank will only give him the payoff amount. Doesn't sound right and sounds like he's trying to get me to drop the price.

Sandhopper

Yup, sounds like he is trying to get you to drop the price since he feels he has you hooked... I might consider talking to his bank but you may also be able to use your dealer to do a courtesy sale for you. I know I have used my local dealer before and they only charge a about $150 for the paperwork and they make sure you are covered. Most of the time they will even arrange for financing for the buyer if needed.

Good luck!

IXI187IXI

iTrader: (3)

i talked to his bank today and they told me the blue book on the car which is 500 less than what i am selling it for. they mentioned they could up the amount but it might raise his interest rate (which i dont care about). i think hes just trying to get the price dropped also.

oohpapi44

iTrader: (1)

Wouldn't this be the answer in a nut shell. It's really just a swap of owners and lenders if the new bank is cutting a check to your finance company. They are basically telling him to come up with a down payment to give to you on his own and they are only going to cut one check to make themselves the new leinholder.

If it was a direct personal loan to him, they would approve the full amount, cut him a check to do with as he pleases. But the car is the collateral on the loan and the bank is only going to put themselves on the line for the value of the collateral.

IXI187IXI

iTrader: (3)

but thats what i dont get. they are offering him less for the loan then what the blue book on the car is worth based on my payoff amount which should have nothing to do with the deal.

oohpapi44

iTrader: (1)

It does make a little bit of sense.

Your payoff amount would be the amount you paid today to your bank to buy off the loan. I'm assuming there's some length of time left on the loan to where those numbers would be different as your principle is accruing interest.

His bank is only interested in lending him the payoff amount for whatever reason and he will need to make up the difference between your selling price and the loan amount (ie his down payment). To me it sounds like its a credit issue on his part where the bank is reluctant to put themselves on the hook for the BB value.

The more he can get you to lower your price, the less of a down payment he needs. How much of a difference are we talking about that he would need to come up with?

IXI187IXI

iTrader: (3)

yea the more im thinking about it, it could be a credit issue on his end but they already approved him for the full amount before the bank even seen my payoff amount.

the difference is minor. hes short $2500 based off what the bank will give him plus what he has cash wise. im not interested in taking a $2500 loss unless i sell the car stock which he is not interested in.

L3XOTIC

Bank gives 90% of blue book value usually PLUS your taxes. If you car payoff is 5k and its worth 8k, it has nothing to do with the transaction.

NOW. if your selling your car for $6k, its worth $5k, buyer will come out of pocket $1k to meet the banks requirements for LOAN to VALUE ratio. I have a car dealership, i do this daily.

LexFather

Moved to car chat