Overhaulin'

i have a lien on my car, can i sell it and use the money to bu a different car?

i currently have a lien on an 05 scion tc with State Farm bank. i have only owned the car for a few months and i dont really think its worth $300/month. i was wondering if i could sell this car (say $12k) and use this money to get a different car (something with a little more power?). i have contacted state farm about this and couldnt get a straight forward answer. there was also an error when registering this car and i have the title for it in my name- state farm is NOT listed as a lien holder on this vehicle. could i technically get around the system? sell the car, buy another and continue to make payments? as far as the bank is concerned, im paying for a scion, when in reality i have a different car registered in my name. this sounds like a legal way to get around the system, albeit somewhat deceptive. please fill me in if im missing something.

Public Comments

1. You could probably sell the car HOWEVER... The new owner would never be able to register the car, or legally posses the auto in his/her name until State Farm clears the lien on the title. SO....if you could sell the car to someone who feels comfortable with you getting full price for your car and then trusting you to do the "right thing" with the money & title...its do-able.
2. well usually you shouldnt have the title for the car until it is paid off when you buy the car since the bank buys it they get the title and when you pay it off the bank will send it to you. If you have the title then I am sure your plan will work it sounds good. However if you dont have the title I dont think anyone would buy the car without having the title
3. No you cannot do this. Just because you dont see State Farm on the title, that doesnt mean they do not have a legal lien on the car. Many states issue titles to buyers without a lienholder listed. When you attempt to sell the car, the new buyer will not be able to get legal ownership until that lien is released. The DMV will not allow it. So, the whole thing will unwind. If you sell the car, the lien has to be satisfied. So any money you get will need to go to State Farm. If you get more than the loan payoff, then you pocket the difference. But if you get less, you have to make up the shortfall in order to finalize the sale. Again, not doing so is illegal. Add to that the fact YOU know there is a lien. Selling the car this way and on a clean title would be fraud, and grand larceny by deception. Both are felonies. You thought this car had more power a couple of months ago? Enjoy the Scion.
4. You do not own this vehicle and selling it is theft. Furthermore, if the person you sold it to had it repossessed (just because they paid you doesn't negate State Farm Bank's right to assert ownership) then you would be facing felony fraud charges and be liable for civil action from the buyer. There are many reasons that you could find yourself unable to pay the bill. Bottom line, you already know it's wrong and now you know some of the possible penalties you could face. If you did this you'd have to be insane. If you don't like the car, sell it like a responsible person and purchase a new one.
5. You can do whatever you want with the car but you can't legally transfer ownership of the vehicle without paying off the loan and clearing the lien. So if you can find someone who is willing to give you $12,000 cash and not have legal ownership of the car or be able to legally register it or insure it in their name then go for it. Plus you would remain legally responsible for the car while the lien is still in force. If you don't like the car just sell it legally, take the money and pay off the loan, clear the lien and start all over.