Traditionally, the companies mentioned earlier do not even contact or go through the lien holder. The seller still remains liable for the payments, whether or not an application is submitted. This arrangement allows the owner to monitor his own payments so he is actually more secure, as is the lien holder.
The companies contend that under the Uniform Commercial Code, Article 9. Section 311, the owner of a vehicle has the right to assign his property regardless of provisions in the original purchase contract by the lien holder (which might claim such a transaction to be in default).
The lender will always hold the original owner primarily liable for payments. Even though the payments are submitted by the buyer, the lender will still acknowledge the seller as the driver and owner of the vehicle. This is because the assignment agreement is between the assignee/buyer and assignor/owner, and not between the assignee/buyer and the lender.
When you have identified several cars that you have an interest in, you are ready to make the initial contact with the owner. Throughout this conversation your goal will be to find out if the owner is in a negative equity position (or upside down) on their vehicle. Best results are obtained if the owner is just asking for what he owes on the car. Be sure to project a professional telephone personality.
You will typically have to make twenty or more phone calls to find a vehicle owner willing to assign his vehicle. One very important thing to remember, be persistent keep calling. There are thousands of desperate people needing to get out of their vehicles in every area of the country. It’s also a good idea to call the owner back a week or so after your first contact. The longer he sees that he can’t sell his vehicle, the more eager he will be to work with you.
The owner will normally want the car out of his name. His credit is riding on your making the payments. You will need to show him that he is secure and protected in dealing with you. When meeting face to face, it is extremely important that you present yourself in a professional manner. Treat this meeting as you would a job interview. This person is essentially giving his approval of you to assume his investment.
Once you have seen the car and feel that it is what you want, you are ready to make a proposal. Explain to the owner that you earn more than enough income to afford this car payment, but you cannot get financing from a bank because of some credit problems that you had in the past or because you dont have enough credit.
Tell the owner strengths about yourself that show your stability and credibility. That should include:
The length of time youve resided in your house or in the area
The length of your current employment
Your job description or job title
Home ownership if applicable
The reason for your credit problem
If you paid back past creditors
What your income level is with bonuses, future pay raises or possibly a job promotion
Describe what makes you a good risk. Let the owner know that you are building his equity in this vehicle, until you pay it off. The more payments you make, the less will be owed on it.
Give him a copy of your credit report, personal references and a copy of your driver’s license. Allow him to verify your employment and that you make your rent or mortgage payments on time.
Show them a copy of the suggested Assignment Agreement which we will give to you at the end of the book. You want to make them feel as comfortable as possible when dealing with you and having an agreement such as this could give them that security. This agreement would be a legal and binding contract with the two of you, so having it ready is a huge advantage for both of you.
Once you have satisfied all the owner’s questions, and have subdued all fears, you need to get a commitment. If the owner will not commit and wants to think about it, find out when the due date is for the next payment. The closer he gets to the next payment, the more flexible he will become.
If the owner remains undecided, you may try offering him concessions. You could offer to make a whole payment or two payments in advance. He may request some kind of security deposit, which would be held for damages. At this point, be creative and willing to empathize with the owner’s concerns.