Confused about selling a motorcycle with a lien

[jetfire33]

OK, so I need to sell my motorcycle - need the money for family things (we had a baby).

Currently paying about $200 a month, with about $2800 left on the financing (HSBC Retail, backing Yamaha Financing). Bike is worth about $6000 (2006 Yamaha FZ6).

So I'll need a UVIP, and it's going to show the $2800 lien. But no one is going to buy a bike with a lien on it, so I need to clear off that $2800 lien first, right?

If I pay the $2800 (would have to be on a credit card), it can then take the lien holder up to 30 days to submit proof of the lien being cleared to the MTO, who can then take a couple days to update the UVIP package info.

And *then* I can post ads and start trying to sell the bike without the lien scaring off buyers.

Here's my concern - $2800 is a nasty chunk of change to float on a credit card for over a month, probably over 2 months.
I kinda need the $6000 from a buyer so that I can pay that $2800 in one swoop - i.e. buyer gives me a bank draft for $6000, I deposit it and immediately pay HSBC the $2800 to clear the debt.

But no buyer in their right mind would trust a stranger (me) to do that, so that $2800 *has* to be gone, right? Paid, but floating on my credit card, dinging me 29.9% interest for a couple months if not more and clobbering my available credit limit.

OR, can I sell my $6000 bike for $3200 + the assumption of the $2800 lien? Would a buyer go for that, or is that a giant red flag too?

How do people sell used vehicles with a lien on them - I mean, what about people selling a couple year old SUVs with like $16,000 still owing? That won't fit on most people's credit cards!

How does this usually work in real life?

Thoughts?

[antichrysler]

The buyer would either have to assume the loan with HSBC permission. Or the loan would have to be cleared first of the lein. Try getting a LOC instead of a CC.

[realcanadian]

You can sell it to a motorcycle dealer.... they buy people's bikes/cars all the time especially in this economy where there's a shortage of used inventory.

[COSMIC5]

you can toss it on your line of credit which could carry a 4.75% rate.... what cc give 29% ...wow

[Spud72]

Contact HSBC and ask for the options. Often they'll let a buyer pay the lien holder directly but that can spook some buyers.

[Tomy]

anyway to work around it?

it's 200$ per month to keep it... do u have the savings to last for 14 more months?
if not..

1. get your family to lend you 2800$, agree to pay back 2900 or 3000, sell bike, repay.

2. get a buddy of yours who would buy the bike, write up a contract..but ask him to lend you 2800 to clear the lien, then pay the remaining balance.

3. go check out the personal finance section and apply for the MBNA credit card and apply for a BT @ 1% transfer fee.

hope this helps

[jetfire33]

Thanks folks, I'll look into these ideas and options.

Seems strange though, that there isn't a system in place for the easy sale of vehicles with liens that clears the liens and protects both buyer and seller. I may be able to float $2800 for a couple months, but what about someone selling a $30,000 car that they owe $20,000 on? How do they do it?

Seems like a broken system. The money needs to move around safely for all parties, that's all.

Ah well.

[mazdubb]

Thanks folks, I'll look into these ideas and options.

Seems strange though, that there isn't a system in place for the easy sale of vehicles with liens that clears the liens and protects both buyer and seller. I may be able to float $2800 for a couple months, but what about someone selling a $30,000 car that they owe $20,000 on? How do they do it?

Seems like a broken system. The money needs to move around safely for all parties, that's all.

Ah well.

One way that I've seen done is to do the vehicle transaction at the bank. He hands you the cash/cheque, you hand him a receipt saying specifically that the lien will be paid. Then you walk up to the teller and hand the cheque over. Get the paperwork releasing the lien and hand that to the buyer.

[nuclearjack]

One way that I've seen done is to do the vehicle transaction at the bank. He hands you the cash/cheque, you hand him a receipt saying specifically that the lien will be paid. Then you walk up to the teller and hand the cheque over. Get the paperwork releasing the lien and hand that to the buyer.

This is what scotiabank told me to do when selling my car.

Also pay off that credit card and get a low interest rate card

[AGR-1]

Very simple:

The buyer makes a draft payable to the lien holder for the lien amount, and another draft for the difference to you.

Ex:

Selling price...............6,000

Lien ........................3,000....to lien holder

Difference.................3,000....to owner

[Buci]

What you need is a lien release from HSBC.

[TrevorK]

Very simple:

The buyer makes a draft payable to the lien holder for the lien amount, and another draft for the difference to you.

Ex:

Selling price...............6,000

Lien ........................3,000....to lien holder

Difference.................3,000....to owner

This is what I have always been told to do when buyer a vehicle with a lien on it; submit payment directly to the lien holder, and whatever is left over can go to the seller.

[motomondo]

You already got a lot of good advice, I just want to mention two things...

< snip >

If I pay the $2800 (would have to be on a credit card), it can then take the lien holder up to 30 days to submit proof of the lien being cleared to the MTO, who can then take a couple days to update the UVIP package info.

And *then* I can post ads and start trying to sell the bike without the lien scaring off buyers.

< snip >

First, It shouldn't take 30 days for the lien holder to provide you with a letter than confirms that they got payment in full. EXamplE - Toyota Creadit can do this (in my experience) in 1 or 2 days. You pay them what you owe, and get the letter (keep a copy), and give it to the buyer. The buyer is now happy, because he has a written confirmation that there is no liens on the vehicle, and if he wishes so, he can call Toyota Credit directly and ask for details about the lien, get verbal confirmation it has been paid for, etc... Toyota Credit staff are very helpful at the phone...

Second, the MTO doesn't update the UVIP in a couple of days. Actually, they do it TWICE A YEAR, so it can take up to 6 months in the worse case, before the UVIP actually is "clean" of the liens.

So, as long as you get a letter from the financial institution stating than you already paid the lien off, you will be able to sell the bike... the MTO takes forever to update the UVIPs, so don't wait for them...

Good luck