Help me Oppo - Paying off lien question

"The Stig's Missourian Cousin" (zachelliott)
07/17/2017 at 14:10 • Filed to: None

Hello Oppo,

Here is my conundrum. I would post this on /r/personalfinance but they would rip me to shreds because I have debt of any type. Anyway, I bought a Tahoe 3 years ago, I still owe some money on it. Not much, but some. I want to buy a new truck (Colorado) and I would be able to get a lot more out of the Tahoe by selling it. The issue is the current loan. When I got the Tahoe, they financed me through Wells Fargo Dealer Services. Which, is barely related to Wells Fargo. Now since I live in MO, I have the title in my hands, but it has a lien on it. So I can’t say “Clean Title”.

So I need to pay it off somehow before I sell it. I’m trying to sell it inside my company first, since there’s more accountability. In that case, someone can buy it from me, and then I can take the money, pay off the lien, get the release, and they can keep me accountable by coming to my desk and kicking me if I don’t hold up my end of the deal.

But this doesn’t work for some random guy on Autotrader that wants to buy it. With WFDS, you can’t pay it off and get a lien release at a branch like you can a local bank. It has to be online/mail. Also, they don’t take Credit cards for payments. So I can’t just put the payoff on my American Express (which would be a dumb idea since i’m outside of the 0% introductory APR, but it was an idea).

So what’s an Oppo to do? I have enough money in savings to pay it off, but it would leave me with $0 in savings (we just bought a house and are currently remodeling, so our savings went from $$$$$$$ to $$) and my wife would kill me if I did that. Especially without knowing when I would sell it. I know people on here have bought/sold a ton and probably have ran into this situation.

I’d like to avoid taking out a second loan to pay it off, because I don’t want an inquiry on my credit before I take out another auto loan. And yes, trading in is an option. But I would have to wait another 6 months before the payoff on the Tahoe is different enough from trade value to pay my taxes (Fucking Missouri) and provide me with a down payment. If I sell it today for even under asking price, i’ll have taxes and down payment covered. So that’s my motivation. Plus if I can get $1500 more for it by selling vs trading, i’d feel better. Ideas? Am I screwed and just have to take out another loan to cover pay off? What’s the best course of action? I’m not in a hurry or anything , but I need to have a plan together in case I get an opportunity to sell it for a good price sooner than expected.

DISCUSSION (42)

CB > The Stig's Missourian Cousin
07/17/2017 at 14:14

Well, you said you want to buy a new truck, not that you need buy one. I’d say hold off on selling the Tahoe for now, maybe up your monthly payments a bit, and then sell it once you have the title.

jimz > The Stig's Missourian Cousin
07/17/2017 at 14:18

I would post this on /r/personalfinance but they would rip me to shreds because I have debt of any type.

Ah, the Dave Ramsey Acolyte Society.

I agree with CB; hold off until you can pay off the Tahoe and get the release of lien. The Colorado isn’t going anywhere any time soon.

The Stig's Missourian Cousin > CB
07/17/2017 at 14:18

I’ve already upped the payments enough (within my budget.) to get it towards a more reasonable trade value to make it worth my while, but that’s still down the road 6 months or so. If I can sell it at that point and get more, I would prefer to go that route. Our vacation next year hinges on having a truck that can actually tow a camper, which my Tahoe won’t do very well (at least not the camper we are being given)

MasterMario - Keeper of the V8s > The Stig's Missourian Cousin
07/17/2017 at 14:19

Remember that trading it in you don’t pay taxes on the trade-in-value. So if the Tahoe is worth a decent chunk of change still it might be worth it to trade it in.

themanwithsauce - has as many vehicles as job titles > The Stig's Missourian Cousin
07/17/2017 at 14:19

Is there a big rebate or deal on the small pickups right now? What would change financially if you waited a bit more? If the situation is only going to get better by waiting, then why not wait?

CB > The Stig's Missourian Cousin
07/17/2017 at 14:19

When’s the trip next year? Because if you can wait six months, that would probably be best.

diplodicus > The Stig's Missourian Cousin
07/17/2017 at 14:22

Uh doesn’t the tahoe have a higher towing capacity since it rides on the same chassis as the Silverado 1500? Max for a colorado is 3500lbs.

The Stig's Missourian Cousin > MasterMario - Keeper of the V8s
07/17/2017 at 14:23

Yea the tax difference is about $400 based on the trade value vs not. The issue is the dealer that actually HAS the Colorado I want most likely won’t give me what I would need on the Tahoe to get a downpayment + taxes covered anytime soon. They seem to lowball on trades based on reviews. Another dealer that has already quoted me a good value on the Tahoe (more than I was expecting) doesn’t carry the trim of truck I can actually afford. The dealer with the Colorados said they “Back into deals” which is just moving money around to get a payment, but I dont’ care about that. I care about OTD price so I know what the truck is worth and how that compares to the loan amount. I have a calculator, I can figure out payments.

Tekamul > The Stig's Missourian Cousin
07/17/2017 at 14:24

If the Tahoe is above water, try to get a secured loan from your local bank to pay off the balance. It would essentially move the lien local, so you can pay it off in person at the time of sale.

This will probably move you to a higher interest rate and carry a paperwork fee, but if it’s only temporary, the rate won’t matter.

The Stig's Missourian Cousin > themanwithsauce - has as many vehicles as job titles
07/17/2017 at 14:24

Not any real rebates right now. The price they quoted me OTD was a little higher than I want, but within negotiation range. And as you’ll notice I said “I’m not in a hurry” but I want to know what my options are should I get someone that says “Hey man I wanna buy your truck” and it’s not paid off. I’m not trying to offload it quickly, I just want to know my options should the situation arise.

The Stig's Missourian Cousin > Tekamul
07/17/2017 at 14:26

I’m well above water on it. My only concern with that is the credit inquiry in applying. Unless secured loans don’t require a credit check. I’ve never applied for one, it’s always been specific purpose loans

The Stig's Missourian Cousin > diplodicus
07/17/2017 at 14:28

Not for the 4.8L with the 3.42 rear axle. I’m at 5700 lbs max. Mess with curb weight a bit and a few other factors and you’re closer to 5500 lbs. It literally is the worse combo for towing lol. But when I bought it, towing anything larger than a tent trailer wasn’t on my mind. But now that I want to tow bigger things, I need something better.

I’m not sure what you’re looking at on the Colorado. The towing for the V6 Crew Cab is 7k lbs.

notsomethingstructural > The Stig's Missourian Cousin
07/17/2017 at 14:29

Yeah this is a super-shitty situation for everyone involved. I’ve looked at a few cars with this issue and you have to work with your buyer and explore every option. On the last one I looked at (which fell apart for unrelated reasons) I agreed to take a standard-form bill of sale, a bill of sale I wrote and we agreed to (w/ terms), and executed DMV paperwork to file a lien. If he brought the title within 14 days, he’d get the lien docs back. If not I’d file the lien. I had possession of the car under that agreement though. If you aren’t willing to let your buyer take delivery, you could probably let them take a second position. You have to talk to Wells to see if that fucks anything up.

Also, he was on Capital One, and with them you could make the payment at their branches and get a receipt for it at the same time as long as it was in cash. We were planning to go over together, review the balance, and pay it off. They might have issued the lien release on the spot and mailed the title - I can’t remember.

The second position lien might be a viable option for you.

The Stig's Missourian Cousin > CB
07/17/2017 at 14:31

Next May.

And yes, I know I can wait, and I always have planned on waiting (Christmas time probably) but I want to know what my options are if some guy in the parking lot at work says “Hey nice truck, you ever think about selling”?

Again, i’m not trying to be an idiot with this purchase lol. I’ve been fucked on car purchases before and learned my lesson (I was young and dumb just out of college with my first full time job. You’ve heard the stories). Which is why i’m approaching this with caution. But i’ve never sold a car with a lien, which is why i’m reaching out for ideas.

diplodicus > The Stig's Missourian Cousin
07/17/2017 at 14:32

Oh looks like it was a base 4cyl model for the colorado.

Tekamul > The Stig's Missourian Cousin
07/17/2017 at 14:32

There would absolutely be a credit inquiry.

Flynorcal: pilot, offshore sailor, car racer and panty thief > The Stig's Missourian Cousin
07/17/2017 at 14:33

When you’re not wanting to take a second loan to pay the first because taking out the third will be difficult, pause what you are doing and reconsider.

The Stig's Missourian Cousin > notsomethingstructural
07/17/2017 at 14:35

Yea I just don’t trust people enough to let the truck out of my sight (unless it’s someone I work with) without the ownership 100% transferred. Even with bills of sale and signed documents. I’m not familiar with “Second Position” i’ll have to look that up.

Yea a lot of banks will do a lien release there. But again, Wells Fargo Dealer Services seems only loosely related to actual Wells Fargo in terms of customer service, so I don’t think I have a lot of flexibility there

The Stig's Missourian Cousin > Flynorcal: pilot, offshore sailor, car racer and panty thief
07/17/2017 at 14:36

I have a good credit score. But when it knocks it down 4-5 points everytime you do an inquiry that can add up and make the difference on a rate. I know i’ll get approved, i’m just trying not to F up my damn good credit score.

The Stig's Missourian Cousin > Tekamul
07/17/2017 at 14:37

Yea that’s what i’m trying to avoid. I don’t want multiple inquiries in a short time, that doesn’t look good. Even when you have a good score like I do (over 800 Fico)..... Granted if I do the unsecured loan NOW and sell in a few months, they probably would have time to have less of an impact.

The Stig's Missourian Cousin > diplodicus
07/17/2017 at 14:39

Yea the Colorado V6 is surprisingly capable. I’ve read many reviews and real life testimonials from folks who have towed with it and they’ve all been impressed. If I could afford the DMax I would go with that. 30 MPG+ on the highway plus 7700lb towing is out of this world.

The Stig's Missourian Cousin > jimz
07/17/2017 at 14:40

Right. As mentioned i’m not in a hurry. I just want to know my options if someone comes up to me and says “Hey I love your Tahoe, you ever think about selling” and wants to buy it from me and not stab me. It’s in great shape and the miles are really low (83k) for it’s age, and i’ve had people ask me before about it. I’ll probably be waiting 4-5 months anyway before I make this decision, I just want to know my options once I get to that point and wanted to see if anyone else had done a similar thing.

themanwithsauce - has as many vehicles as job titles > The Stig's Missourian Cousin
07/17/2017 at 14:42

Aaaaaaaahhhhh gotcha.

Well I know that you can always do the exchange at the bank or financial institution to assuade both parties. The buyer brings their payment and can see the loan payoff, the loan is paid off in front of them, the seller clears the title to be received by the buyer and the exchange is completed.

notsomethingstructural > The Stig's Missourian Cousin
07/17/2017 at 14:45

Second Position means he holds a valid lien but doesn’t receive funds until after the First / Primary Lien is satisfied. As I understand, anyways (not a lien lawyer - or any lawyer for that matter.) That’s why it would be important to make the payment with them there. They would have the paperwork in-hand to lien the title again, and knowing the payoff was in motion should feel pretty good about really dicking up your transaction if you were to fuck them over.

The Stig's Missourian Cousin > themanwithsauce - has as many vehicles as job titles
07/17/2017 at 14:46

Yes, but WFDS (I called them today) doesn’t want you to pay off at a branch. They said they recommend doing it online/mail. So even if we do meet at the branch, the buyer still has to trust that I will give them the lien release. Which of course I will, but they don’t know me. So they have to trust that in 7-10 business days I’ll give them a lien release. I know i’d be hesitant to do that.

MontegoMan562 is a Capri RS Owner > The Stig's Missourian Cousin
07/17/2017 at 15:01

Maybe just call wells and see if there’s anything they can help you with. Maybe they’ll release the lien if you’re going to buy another with their financing.

The Stig's Missourian Cousin > MontegoMan562 is a Capri RS Owner
07/17/2017 at 15:09

Yea I may have to give them a call back. Given it’s “Dealer Services” I’m not sure if I can just call and ask about a loan, or if i’d have to go through regular Wells Fargo, which apparently there is quite the difference there.

themanwithsauce - has as many vehicles as job titles > The Stig's Missourian Cousin
07/17/2017 at 15:11

Ugh. Dang. Guess I’m in the same boat as you, trying to figure out why it’s so hard to get people to accept your money :/

MasterMario - Keeper of the V8s > The Stig's Missourian Cousin
07/17/2017 at 15:12

Sounds like you have things covered, I’m not much use for figuring out your lien payoff conundrum though other than just saying to wait until your Tahoe is paid off.

MontegoMan562 is a Capri RS Owner > The Stig's Missourian Cousin
07/17/2017 at 15:18

Figure it can’t hurt. The Mortgage arm helped me out big time when i stuck with them for the 2nd house. No PMI and a lower interest rate for loyalty. Made a big impact.

The Stig's Missourian Cousin > MasterMario - Keeper of the V8s
07/17/2017 at 15:18

Yea i’ve looked at amoritization and by December, if they give me what I’m expecting on trade, I can cover taxes+down payment without having to pay the Tahoe off. I’m not driving it much right now, so miles should stay the same so value shouldn’t go down too much. I’m just concerned about the dealer that has the truck I want giving me what I want for the Tahoe since they seem to low ball at bit. But we’ll see.

The Stig's Missourian Cousin > MontegoMan562 is a Capri RS Owner
07/17/2017 at 15:22

Yea might as well check. I’m considering going in with my own financing anyway, so I might add them to the list to check.

MontegoMan562 is a Capri RS Owner > The Stig's Missourian Cousin
07/17/2017 at 15:30

Honestly I normally take whatever deal is best through the dealer (I normally do used cars) and then if I find out my credit union can refi for a better rate I jump ship. Sometimes you can get a better deal on the car if you take their financing. This is sometimes seen as a dick move on my part.

Don’t care, money is money.

The Stig's Missourian Cousin > MontegoMan562 is a Capri RS Owner
07/17/2017 at 15:33

Oh absolutely. If they knock $1k off the price because I go with Ally or whoever they want me to use so be it. I don’t see how it’s a dick move, it’s just smart. Although that being said, there was a dealer in Oklahoma (David Stanley. Fucking scumbags) that actually had you sign something in the paperwork saying you couldn’t refi for 18 months I think. Stuck in a subprime loan? Try to get out of it and we’ll sue you! So needless to say I will be reading things closely. This dealer isn’t like that and is generally well liked, so I don’t think i’ll have that problem. But still

MontegoMan562 is a Capri RS Owner > The Stig's Missourian Cousin
07/17/2017 at 16:01

oh I read the shit out of stuff, I actually write disclaimers for ads for my career, well it’s a big part of it anyhow. People said it was a dick move because sometimes the dealer gets a kickback for the loan going through and they can then lose the kickback if I refi within a timeframe. So I see it from that perspective, but I also know how much dealer’s rip people off and I say we’re square.

The Stig's Missourian Cousin > MontegoMan562 is a Capri RS Owner
07/17/2017 at 16:21

Yea for every new car that they don’t make any money on, they can sell a used car to a subprime buyer at 20% for 10 years and make $$$$. They exist to sell me a car at a price. It’s not my job to make them money.

MontegoMan562 is a Capri RS Owner > The Stig's Missourian Cousin
07/17/2017 at 16:33

Basically. I always buy used, and I know they get a hell of a deal on the car they are selling me. Especially on cars in the teens, they damn near double what they put into them and then slap For Sale - Used on it.

One time a salesman was like, I can’t give you that much for your trade but I can take that extra off the top of the car you’re buying. OK, just wanted that much cash applied, I don’t care how you pull it off. That’s up to you haha.

The Stig's Missourian Cousin > MontegoMan562 is a Capri RS Owner
07/17/2017 at 16:40

Yea in this case i’m buying a new Colorado, and the OTD price they quoted me is *so* close to what I want to pay where the value over time will line up perfectly with being right side up on the loan. And if I go into it with no trade, they can’t try to pad the trade or anything to get me a deal. I care about value over time. I don’t care if you get me into my payment, if the truck is $2k more than I expected it to be and i’m financing more than the value, the depreciation is gonna catch up over time which isn’t what I want. So they’re probably gonna hate me because i’m gonna drive a hard bargain and not talk about payments, but they actually have a discount with my company and donate money to our company’s charity, so I want to go with them, and they want to keep business from our company, so I feel like if I push enough i’ll get to where I want to be.

The Stig's Missourian Cousin > notsomethingstructural
07/17/2017 at 17:06

Yea i’m just not sure if they could do that at a Wells Fargo branch, given the conversation I had with their phone support. They seemed to indicate that they always have issues with the branches, and they can’t do anything but payments at the branches. Not anything on the actual title.

The Stig's Missourian Cousin > themanwithsauce - has as many vehicles as job titles
07/17/2017 at 17:08

Yea I wish I would have thought to ask about different financing when I bought the truck, but they gave me a decent rate for the time and I didn’t complain. Now i’m realizing I should have asked to go with a local bank, or at least an actual bank, and not an auto lender.

notsomethingstructural > The Stig's Missourian Cousin
07/17/2017 at 17:11

They might not, but it’s preferable for them to keep the loan on an established paying customer rather than try to help you. You might have to squeeze em or threaten to make a scene over it.

ETA: they aren’t doing anything title related, they’re just giving you a statement on the balance and accepting a payment for the payoff amount. You would still have to clear the title with their corporate office but if you give the buyer the paperwork for THEM to file a second lien they can make it virtually impossible to sell the car to someone else.

The Stig's Missourian Cousin > notsomethingstructural
07/17/2017 at 17:19

I gotcha now. I’ll give them a call and see what they can do.