Friend buying my car..wants to make payments?

Question

A friend wants to buy my car. He claims his ex-wife really messed up his credit and he cant get a bank loan for the 5,500. He siad he can give about 800 down and pay 200-300 month. What type of legal documents should i have prepared to sign off this aggrement and where do i get that done at...bank?DMV? Who has the title and who pays insurance? Whats a lien holder?

Can i sign the title over to him but still have a document showing he owes me 5500?

Answer 1

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Answer 2

First you need to get something down in writing.  Then go to a Notary and both of you will need to sign the document in front of him/her.  You are the lien holder which means, if he doesn't pay, you can garnish his wages at work if you want to.  The buyer pays for the title and insurance.  You will only have to split the cost of the Notary which won't be much.  You hold the title until he's completely paid for the car.  Make sure you protect yourself and put everything you can think of into the contract.  You can Google car payment contracts or some other similar words in order to find something that would fit your situation, but simply writing something on a piece of paper and signing it in front of a Notary, would be legal in a court of law should something happen.  After all this being said, it isn't good business to deal with friends or family in a transaction such as this.  Many times it results in bad feelings towards one another.  Good luck.

Answer 3

Don't do business with friends or family unless you want trouble. But if you do, then draw up a document on the agreed price etc. and take it to sign in front of a notary at a bank. It is legally binding then. You keep the title until he pays it off, just like a bank would. He would need to get his own insurance. The DMV requires that to get it licensed anyway.