What are the procedures or forms for a private loan with the sale of a vehicle?
The Nebraska DMV web site has a neat page about this. It seems to be fairly simple, and not costly to record a lien and later release it. Just go there with the title and the sales agreement that details the terms, and pay the $7 fee. Draft up a promissory notes.  Have a lawyer do it use one of those online contract places if you have simple needs.  Your promissory note need to cover Be specific.  There are probably a lot more items that can be included, and if a quick internet search is any indication it gets deep fast. http://lmbtfy.com/?q=car+sale+promissory+note (Like @LittleAdv says) Head to your DMV with the title and the promissory note.  The title is signed over to you and held by the DMV.  When you pay up, the seller informs the DMV and they send you the title.  If you don't pay up, the seller can legally repossess the car.  All butts are covered. Pay the note as agreed.  When you are all paid up, your friend notifies the DMV who then mail you the title. Your butt is covered because your name is on the car, you can insure it and nobody can take it from you (legally) if you are paying the note as agreed.   Your pal's butt is covered because if you stop paying half way through, he can keep whatever you have paid him and get his car back.
"At this point there is not much you can do.  The documentation probably points to you being the sole owner and signer on the loan.  Then, any civil suit will degenerate into a ""he said, she said"" scenario.  Luckily, no one was truly harmed in the scenario.   Obtaining financing through a car dealer is almost always not advisable.  So from here, you can do what should have been done in the first place.  Go to banks and credit unions so your daughter can refinance the car.  You will probably get a lower rate, and there is seldom a fee.   I would start with the bank/CU where she does her checking or has some other kind of a relationship.  If that fails, anywhere you can actually sit and talk with a loan officer is preferable over the big corporate type banks.   Car dealers lying is nothing new, it happens to everyone.  Buying a car is like a battle." The advice above is generally good, but the one catch I haven't seen addressed is which specific laws apply.  You said that you are in Arkansas, but the dealer is in Texas.  This means that the laws of at least two different states are in play, possibly three if the contract contains a clause stating that disputes will be handled in a certain jurisdiction, and you are going to have to do some research to figure out what actually applies.   One thing that may significantly impact this issue is whether you were in TX or AR when you signed the contracts.  If you borrowed the money in TX, and the lender is in TX, then it is almost certain that the laws of Texas will govern.  However, if you were living in AR at the time you acquired the loan, particularly if you were in AR when you signed the papers, you have a decent case for claiming that the laws of Arkansas govern.  I don't know enough about either state to know if one is more favorable to the consumer than the other, but it is a question you really want to have answered.  That said, I would be shocked if any state did not have provisions requiring the lender to provide a copy of the terms and a detailed statement of the account and transaction history upon request.  Spend some time on the web site of the Texas attorney general and/or legislator (because that is where the lender is, they are more likely to respect Texas law) to see if you can track down any specific laws or codes that you can reference.  You might also look into the federal consumer protection laws, though I can't think of one off hand that would apply in the scenario you have described.   Then work on putting together a letter asking them to provide a copy of the contract and a full history of the account.  As others noted, make sure you send it certified/return receipt, or better yet use a private carrier such as fedex, and check the box about requiring a signature. Above all you need to get the dialog transferred to a written form.  I can not stress this point enough.  Everything you tell them or ask for from here out needs to be done in a written format.  If they call you about anything, tell them you want to see their issue/offer in writing before you will consider it. You do not necessarily need a lawyer to do any of this, but you do need to know the applicable laws.  Do the research to know what your legal standing is.  Involve a lawyer if you feel you need to, but I have successfully battled several large utility companies and collection agencies into behaving without needing one. "Paperwork prevails.  What you have is a dealer who get a kickback for sending financing to that institution. And the dealer pretty much said ""We only get paid our kickback at two levels of loan life, 6 and 12 months."" You just didn't quite read between the lines.  This is very similar to the Variable Annuity salespeople who tell their clients, ""The best feature about this product is that the huge commissions I get from the sale fund my kid's college tuition and my own retirement. You, on the other hand, don't really do so well.""  Car salesmen and VA sellers." The other person has to decide that they want to be wholly responsible for the loan, and they have to be able to qualify for the loan. They are in essence purchasing the car from you with the sale price being the remaining balance of the loan.  You will then use the processed from the new loan to pay the old loan off completely. They will then take the bill of sale to the state DMV/MVA to register the car in their name. You should have them start with their bank for a new car loan. The old truck is collateral for a loan. The place that made the loan expects that if you can't pay they can repossess that old truck. If you sell it they can't repossess it.  The dealer needs clean title to be able to buy the truck from you, so they can fix up the truck and sell it to somebody else. I am assuming the the lender has filed paperwork with the state to show their lien on the title. Your options are three: As to option 2: If the deal still makes sense the new car dealer can send the $9,000 to the lender that you forgot about. That will of course increase the amount of money you have to borrow.  You will also run into the problem that this loan that you forgot to mention on your credit application may cause them to rethink the decision to loan you the money. Not a good idea, the bank is a lean holder unless you deduct the remainder of the loan from the purchase price you will end up paying much more. Tell the seller to pay off the loan and provide you a clean title. Btw unless you're getting the deal of the century I'd walk away until I saw a clean title Your first step is to talk to the current lender and ask about refinancing in the other person's name. The lender is free to say no, and if they think the other person is unlikely to pay it back, they won't refinance. If you're in this situation because the other person didn't qualify for a loan in the first place, the lender probably won't change their mind, but it's still worth asking. From the lender's point of view, you'll be selling the other person the car.  If they qualify for a loan, it's as simple as getting the loan from a bank, then doing whatever is required by your state to sell a car between either private parties or between relatives (depending on who the other person is). The bank might help you with this, or your state's DMV website.  Here are a few options that don't involve changing who is on the loan: Taking out a loan for another person is always a big risk. Banks have entire departments devoted to determining who is a good credit risk, and who isn't, so if a person can't get a loan from a bank, it's usually for a good reason.  One good thing about your situation: you actually bought the car, and are the listed owner. Had you co-signed on a loan in the other person's name, you'd owe the money, but wouldn't even have the car's value to fall back on when they stopped paying. 1) How long have you had the car?  Generally, accounts that last more than a year are kept on your credit report for 7 years, while accounts that last less than a year are only kept about 2 years (IIRC - could someone correct me if that last number is wrong?). 2) Who is the financing through?  If it's through a used car dealer, there's a good chance they're not even reporting it to the credit bureaus (I had this happen to me; the dealer promised he'd report the loan so it would help my credit, I made my payments on time every time, and... nothing ever showed up.  It pissed me off, because another positive account on my credit report would have really helped my score).  Banks and brand name dealers are more likely to report the loan. 3) What are your expected long term gains on the stocks you're considering selling, and will you have to pay capital gains on them when you do sell them?  The cost of selling those stocks could possibly be higher than the gain from paying off the car, so you'll want to run the numbers for a couple different scenarios (optimistic growth, pessimistic, etc) and see if you come out ahead or not. 4) Are there prepayment penalties or costs associated with paying off the car loan early?  Most reputable financiers won't include such terms (or they'll only be in effect during the first few months of the loan), but again it depends on who the loan is through. In short: it depends.  I know people hate hearing answers like that, but it's true :)  Hopefully though, you'll be able to sit down and look at the specifics of your situation and make an informed decision. "You're supposed to be filling form 433-A. Vehicles are on line 18. You will fill there the current fair value of the car and the current balance on the loans. The last column is ""equity"", which in your case will indeed be a negative number. The ""value"" is what the car is worth. The ""equity"" is what the car is worth to you. IRS uses the ""equity"" value to calculate your solvency. Any time you fill a form to the IRS - read the instructions carefully, for each line and line. If in doubt - talk to a professional licensed in your state. I'm not a professional, and this is not a tax advice." "In the US, ""title"" is the document that shows ownership of the car. It is a nicely printed document you get from the DMV, that includes the information about the car and about you. You ""sign off the title"" when you sell the car - part of the title is a form on which the owner of the title can assign it to someone else. With your signature on the title, the new owner goes to the DMV which exchanges it to a new title in the new owner's name. Never sign on the title unless you got the payment for the car from the buyer. Usually, when the car is bought with a loan, the lender holds the title. Since you need to sign off the title to pass the ownership if you sell the car - lender holding on to it will prevent you from selling the car until the lender gives you the title back (when you pay off the loan). Your boss, acting as a lender, wants the title to hold on to it to prevent you from selling the car that secures your debt to him. He wants that (usually pink) piece of paper. Here's an article explaining about the title and showing a sample. Lenders holding the title will usually also add an endorsement at the DMV, so that you can't go and claim that you lost it." California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter for the lawyers and bankruptcy trustee in question. There's a blog which you may wish to check out, the California Bankruptcy Blog, which has a specific entry on gifts. Now, there is a specific exemption for automobiles, but only up to a total of $2725. Legally, I believe there's nothing you can do here. If the $10K was a loan, it will be discharged in bankruptcy. If it was a gift, it'll have to be declared and the car will have to be sold. If regifted or transferred, it must be declared and will likely (but not definitely) be determined as an invalid disposal of assets. Either you or your family member will have to discuss this with a bankruptcy lawyer. I'm sorry your generous act is likely to get tangled up here. :( Contact the lien holder (the bank) and they'll have a procedure for you. Usually, you complete the transaction at the bank after agreeing on the purchase price: you will cut a check to the bank to pay off the loan, and then write a second check to the seller for whatever extra amount should go to him. The bank will handle the paperwork for transferring the title of the car to your name. Obviously, under no circumstances should you give all the money to the seller in the hopes that he pays off the loan. You need to follow the lender's procedures because they hold the title to the car and must be the ones to transfer it to you. Banks do this type of transaction all the time. Just call them and ask about how to proceed. Update: here is a message the seller just sent me. Does this make sense?  I spoke with my bank again and they explained it a little better for me. I guess how it works is they will print out something for you that is called an affidavit in lieu of title that states they are no longer the lein holder and to release it to you. You then take that to the dol and they get it put in your name. He says that's how they do it all the time. When we get to the bank, the teller just verifies the check and I deposit it and they release the funds to pay off the account and that's when you would get the paperwork. You would be there for the whole process so nothing is sketchy. Sorry it's such a pain, I didn't understand how that worked. We've never sold a car with a loan on it before. Make sure I am reading this correctly.  You signed the car over to you BF, he took a loan against it and gave you the money?   If so, you sold him the car and any use you have had of it since was at his consent.  Outside of a written contract saying otherwise (and possibly even with one) it is now his car to do with as he pleases. It sucks that things are not working out in the manner you intended at the time, but that is the reality of the situation. "You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint,  non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus  may well be leaving the country before  the loan is fully paid off. In your case, the issue is exacerbated  by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan  payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off.  Yes, you plan on  applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of ""lenders who have a reliable track record of extending  auto loans to non-permanent residents."" For this reason, I  suggested in a comment that you consider applying at a credit union,  especially if there is an Employees' Credit Union for those  working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you.  Failing all this, there is always the auto dealer's own loan offers of financing.  Finally, one possibility that you might  want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled."