Safely buying a bike private sale that has a lien with a manufacturers financial company

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KWDRZ

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Seems like there is a lot that can go wrong here. The only way this works I can see is when the lien is with a bank that has a physical location so you can confirm its being paid off and get the title, and not leaving any opportunity that the buyers takes off with the cash and doesn't pay off the lien.

What happens when the lien is with a lender like Yamaha financial? Is there really any safe way to do this for the buyer?

I've bought a bunch of bikes now but never one with a lien through a private seller.
 
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The safest way is the seller pays off the lien first (LOC/unsecured loan/borrow from family) and then you buy the bike clear with a letter from the finance company stating no lien. It only costs a month of interest so the cost to the seller is low and it is the route I would follow if I really wanted to sell something with a lien on it. Obviously some sellers won't or can't follow this approach.

I think there is a safe way to clear the lien but others will know better. Something along the lines of you write one check to yamaha financial to pay off the loan and a second to the seller for the remainder. The problem is most times vehicles are sold with a lien they are underwater so this doesn't work nearly as well.
 
GreyGhost said:
The safest way is the seller pays off the lien first (LOC/unsecured loan/borrow from family) and then you buy the bike clear with a letter from the finance company stating no lien. It only costs a month of interest so the cost to the seller is low and it is the route I would follow if I really wanted to sell something with a lien on it. Obviously some sellers won't or can't follow this approach.

I think there is a safe way to clear the lien but others will know better. Something along the lines of you write one check to yamaha financial to pay off the loan and a second to the seller for the remainder. The problem is most times vehicles are sold with a lien they are underwater so this doesn't work nearly as well.
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Thanks for the info! I agree the seller just taking care of the loan is definitely preferable, for the buyer its like any other sale after that. Unfortunately they don't always have the amount of cash needed and not looking to take out another loan. I know he wants to pay it off partially with the money he receives from the sale. The lien is for more than the sale price, unfortunately. So sending a cheque to Yamaha is difficult. I guess you could pay the full amount, and receive the money from the seller, basically the reverse.
 
KWDRZ said:
Thanks for the info! I agree the seller just taking care of the loan is definitely preferable, for the buyer its like any other sale after that. Unfortunately they don't always have the amount of cash needed and not looking to take out another loan. I know he wants to pay it off partially with the money he receives from the sale. The lien is for more than the sale price, unfortunately. So sending a cheque to Yamaha is difficult. I guess you could pay the full amount, and receive the money from the seller, basically the reverse.
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Let me know if you find someone to give you a bike and a handful of cash. I suspect most sellers wont be able to stomach that. It really rams home your ill-advised purchase.
 
GreyGhost said:
Let me know if you find someone to give you a bike and a handful of cash. I suspect most sellers wont be able to stomach that. It really rams home your ill-advised purchase.
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Haha hopefully that reality has already hit that selling a 1 year old model bike with a fresh loan never ends well. That instant depreciation...
 
KWDRZ said:
Thanks for the info! I agree the seller just taking care of the loan is definitely preferable, for the buyer its like any other sale after that. Unfortunately they don't always have the amount of cash needed and not looking to take out another loan. I know he wants to pay it off partially with the money he receives from the sale. The lien is for more than the sale price, unfortunately. So sending a cheque to Yamaha is difficult. I guess you could pay the full amount, and receive the money from the seller, basically the reverse.
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my advice, if its worth anything here:


leave your emotions at home, I know you probably really want this bike.....but walk away.... until the seller can prove to you that lien is no longer in place
 
Slick_Steveo said:
my advice, if its worth anything here:


leave your emotions at home, I know you probably really want this bike.....but walk away.... until the seller can prove to you that lien is no longer in place
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Thanks for the advice. I am leaning to the same direction, it's a lot of headache otherwise.

This is a purchase for a friend that I am helping with because I have a lot more free time right now. His bike is sold as of today so he's looking for something as soon as possible. Unfortunately there are not a lot of 1-2 year old used MT-07's that are decently priced on the market at the moment. Still might going for a new model but if a few thousand could be saved on a year old one that wouldn't be too bad either.
 
What makes it so special that it would be worth all the hassle?
 
KWDRZ said:
Thanks for the info! I agree the seller just taking care of the loan is definitely preferable, for the buyer its like any other sale after that. Unfortunately they don't always have the amount of cash needed and not looking to take out another loan. I know he wants to pay it off partially with the money he receives from the sale. The lien is for more than the sale price, unfortunately. So sending a cheque to Yamaha is difficult. I guess you could pay the full amount, and receive the money from the seller, basically the reverse.
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This is the scary part of your statement. I think many sellers would love to continue making the monthly payments to spread the pain, but that means the lien is still alive and well. If they are underwater, I definitely need a letter saying the lien is cleared before I pay.
 
Wingboy said:
What makes it so special that it would be worth all the hassle?
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True, nothing at all, just an opportunity to save a few g's on a lightly used year old bike vs buying new. But I agree it's not worth the hassle with the current situation.
 
GreyGhost said:
This is the scary part of your statement. I think many sellers would love to continue making the monthly payments to spread the pain, but that means the lien is still alive and well. If they are underwater, I definitely need a letter saying the lien is cleared before I pay.
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Agreed. I would not have done that method. Too risky.
 
GreyGhost said:
This is the scary part of your statement. I think many sellers would love to continue making the monthly payments to spread the pain, but that means the lien is still alive and well. If they are underwater, I definitely need a letter saying the lien is cleared before I pay.
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It's all in the wording. It could also mean he needs the money from the sale to add to what he has on hand to pay off the lien in full.
 
FullMotoJacket said:
It's all in the wording. It could also mean he needs the money from the sale to add to what he has on hand to pay off the lien in full.
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I thought about that, but most of these loans are open. If I had that money in my hand, I would fire it into the loan to simplify the transaction. It is going to be hard to find someone that will agree to you maybe paying off the loan.
 
Edit : If the lien is more than the bike is selling for this will not work.
I know years ago you could do this, not sure about today. You go with him to his bank. So, say the bike is $10,000 and he owes $5000. You pay off the loan and get a letter from the bank that the "full" loan is paid off. He signs over the bike to you and you give him the remaining money. It's all done at the bank. It's the only way to be sure the loan was paid off. I know years ago you could do this, don't know about now?
 
Klaatu said:
I know years ago you could do this, not sure about today. You go with him to his bank. So, say the bike is $10,000 and he owes $5000. You pay off the loan and get a letter from the bank that the "full" loan is paid off. He signs over the bike to you and you give him the remaining money. It's all done at the bank. It's the only way to be sure the loan was paid off. I know years ago you could do this, don't know about now?
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Except, in this case, the bike is worth 10 and he owes 12. And the "bank" is yamaha finance not cibc. It may still be possible, but adds layers of complication.
 
I did that when I bought my race bike: it had a lien on it, the loan was with TD. Since I already deal with TD, we just went to a TD branch and did the transaction there. We had agreed on a price, I paid off the loan, and paid the seller the difference.

... except that if the seller is underwater (as seems to be the case here), then they're going to have to pay it off. Can still do it at the financial institution, but it's contingent on the seller having the cash to pay off the loan. If they don't ... no deal.
 
If you/your friend are experiencing this type of headache with this I only expect that other potential buyers are as well.

If he wants this bike sold ASAP (it is only in his financial interest to ) he will get this lien sorted out. Or at least to the point where the buyer will not need to jump through hoops to acquire the bike. The selling should be doing the leg work.

Give him some time to sort it out and call you back to buy the bike.
It won't disappear off the market tomorrow.
 
I'd also be careful with any lien release doc seller comes up with
would be extremely easy to fake something up

I'd confirm the lien status myself with the lender
 
johnsazzr said:
walk away..this is tricky enough without throwing in the difficulty of dealing with Yamaha Finance and reduced staffing during the middle of C19
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Yep according to him they are essentially closed so it's no go right now I guess. I imagine they are just running at the bare minimum staff to process dealers because they are still open and able to finance.
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