What to do after paying off the car loan?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities

What to do after paying off the car loan?

Postby jay22 » Wed May 22, 2013 11:43 am

I am sorry if it's a dumb question, but this is the first time I have owned a car and was wondering what I need to do after I have paid off the car loan. Do I need to go to the DMV to get the title transferred to me? I am assuming the title belongs to the dealer till the amount is paid off?

Thanks.
jay22
 
Posts: 356
Joined: Thu Aug 23, 2012 8:56 am

Re: What to do after paying off the car loan?

Postby Aptenodytes » Wed May 22, 2013 11:53 am

Normally you get a title when you first buy the car, and it lists your loan provider as a lien holder. You normally get a release-of-lien letter after the loan is paid off. That plus your title give you full rights to the car.

That's how it is has worked for me -- I imagine this is all regulated at the state level so it may vary place to place.
User avatar
Aptenodytes
 
Posts: 2394
Joined: Tue Feb 08, 2011 8:39 pm

Re: What to do after paying off the car loan?

Postby Kosmo » Wed May 22, 2013 1:19 pm

Why my wife bought her car the bank kept the title, but it was in her name. It was returned along with a "paid in full" notice about a month after we paid off the loan. Car is registered in PA, but the bank was in NJ. I guess PA law applied here?

Now what you really need to do is to keep making that monthly car payment to a savings account so your next car can be bought in cash.
User avatar
Kosmo
 
Posts: 589
Joined: Wed Sep 05, 2012 11:54 am
Location: Philadelphia

Re: What to do after paying off the car loan?

Postby WHL » Wed May 22, 2013 2:05 pm

Kosmo wrote:Now what you really need to do is to keep making that monthly car payment to a savings account so your next car can be bought in cash.


This is exactly what I was going to post, and it's exactly what I'm doing.

Keep that "future vehicle" money separate, otherwise when the time comes for a new ride, you're going to end up financing again!
WHL
 
Posts: 695
Joined: Mon Dec 10, 2012 2:22 pm

Re: What to do after paying off the car loan?

Postby inbox788 » Wed May 22, 2013 2:48 pm

WHL wrote:
Kosmo wrote:Now what you really need to do is to keep making that monthly car payment to a savings account so your next car can be bought in cash.


This is exactly what I was going to post, and it's exactly what I'm doing.

Keep that "future vehicle" money separate, otherwise when the time comes for a new ride, you're going to end up financing again!

Me too. However, I only keep a mental accounting, lumping it in with taxable investments. After 7 years between car purchases, it let's me choose to buy 2 new cars or a very nice luxury car. I'm probably going for the latter. :D Besides the car payment, it's avoiding paying the bank interest AND earning a return on the cash.
inbox788
 
Posts: 1122
Joined: Thu Mar 15, 2012 5:24 pm

Re: What to do after paying off the car loan?

Postby SimonJester » Wed May 22, 2013 6:47 pm

This will probably vary state to state county to county. In my area the title is held by the lender and contains both your name and the lender's as a lien holder, when you pay the loan off in full the lender mails you the title with their signature in the lien release section.

Now you want a clean title ie one without the lender's name on it. This is important if you should have an insurance claim as your insurance carrier may write the check to you and the lien holder requiring two signatures to cash the check.

So you take the title down to the DMV and present it along with a fee (ie tax) and they print you a new title with only your name on it.


Again this is going to vary state by state
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
SimonJester
 
Posts: 491
Joined: Tue Aug 16, 2011 12:39 pm

Re: What to do after paying off the car loan?

Postby icefr » Wed May 22, 2013 9:45 pm

This varies by state and lender. I had to go to a records office downtown and pay $19 to get a clear title. Friends in the same state with a different lender just got the title in the mail. I think my lender didn't eat the $19 and the banks do.
icefr
 
Posts: 170
Joined: Sun Apr 17, 2011 10:50 am

Re: What to do after paying off the car loan?

Postby jay22 » Thu May 23, 2013 7:02 am

Thanks for the replies, I'll go over to the DMV today and get it sorted.
jay22
 
Posts: 356
Joined: Thu Aug 23, 2012 8:56 am


Return to Personal Consumer Issues

Who is online

Users browsing this forum: astrohip, Boglemama, lapuce, lhl12, SuperGrafx and 54 guests