Buying used tractor that was financed

[jeffgreef]

Hi folks-

If you buy a used tractor from a private party who still owes a lot on it, how do ensure that he's going to pay off the loan? I've heard that if he doesn't, you the new owner owe the debt even though you wrote him a check.... is that so?

JG

 

[dave1949]

Hi folks-

If you buy a used tractor from a private party who still owes a lot on it, how do ensure that he's going to pay off the loan? I've heard that if he doesn't, you the new owner owe the debt even though you wrote him a check.... is that so?

JG

Assuming the tractor is serving as collateral for the loan, the finance company or bank certainly has an interest in the tractor until the loan is paid off.

Could you have the seller call the finance company on the day of the sale (in your presence) and get the outstanding balance due, then settle the difference with the seller, take the coupon book home wth you and pay off the loan yourself? You would have to request the payoff letter comes to you, not the previous owner.
Dave.

 

[Diamondpilot]

I go through this on boats all the time. Get paperwork from the lean holder then make out 2 certified checks. One to the bank and one to the individual. Say the tractor is $15,000 and he owes $14,000 the checks would be $14,000 to the bank and $1,000 to him or her.

Chris

 

[Snead Tractor LLC]

I go through this on boats all the time. Get paperwork from the lean holder then make out 2 certified checks. One to the bank and one to the individual. Say the tractor is $15,000 and he owes $14,000 the checks would be $14,000 to the bank and $1,000 to him or her.

Chris

He's exactly right. This is the safest way.

 

[Bird]

I go through this on boats all the time. Get paperwork from the lean holder then make out 2 certified checks. One to the bank and one to the individual. Say the tractor is $15,000 and he owes $14,000 the checks would be $14,000 to the bank and $1,000 to him or her.

Chris

That's the way I sold a motorhome that I still had financed. And we called the finance company, found the individual who actually had the title in his hand, and the buyer drove 250 miles, one way, himself to pay off the motorhome and pickup the title.

 

[mcd176]

When I sold my pick up few years back thats what I did, me and the buyer went to the bank where the truck was financed and he had a cashiers check for the outstanding loan balance and another check for me.

 

[firefighter jim]

I go through this on boats all the time. Get paperwork from the lean holder then make out 2 certified checks. One to the bank and one to the individual. Say the tractor is $15,000 and he owes $14,000 the checks would be $14,000 to the bank and $1,000 to him or her.

Chris

Sounds like a good way to handle it.

 

[Mike Costello]

Another thought, most lenders don't allow loan assumptions because of legal issues etc. It's just cleaner to do it as suggested by other posters and it avoids potential trouble.

 

[VALENT]

When I bought my tractor, the sellers had it financed through. It would have been nice to assume the loan but just seemed to require more than I was willing(or the sellers.) So, they called Kubota credit, got the payoff amount, and I got cashiers checks for Kubota and the sellers. For all I know, everything worked out just right.

 

[AndyMA]

That's the way it is done all the time when you buy a financed car or truck from a private party.

Andy