dirtbike with KTM finance lein

Discussion in 'The Rockies – It's all downhill from here...' started by dougrender, Sep 24, 2019.

  1. dougrender

    dougrender Bike Polo is not a Crime

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    I neither buy nor sell a lot of used dirtbikes, so looking for some words of experience. I looked at a KTM 300 two stroke tonight, wanted to buy it, but the Certificate of Origin (not a title, not a motorvehicle, but similar document) shows a lein against it to KTM finance. Of course, they have no "local branch" you could just walk into, pay it off together, get the fresh cert etc. and both seller and buyer are happy.

    Tonight's seller represented he would just "go to the bank and pay it off" (he would transfer my cash to KTMF) but I tried to explain that would mean he would now own it rather than the bank, but that I still would not own it. He maintained he had done this before and it would be OK. Maybe he only has dealt with guys with extraordinarily high risk tolerance.

    Is there some Colorado wormhole/loop around this I'm not familiar with, or is this just a closed case of someone hoping to sell what he does not own. I don't think the guy is dishonest, just poorly informed. Only thing I can think of, is he gets a personal loan at a local bank, pays off KTMF, waits for a fresh cert with his name and the local bank as lein holder, and we go into the local bank together and pay it off and go our happy ways. I see that taking a month, minimum.

    =Doug
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  2. Dirt2007

    Dirt2007 Long timer Supporter

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    Not sure if you're financing it or not. If you are it's easy. Both go to your bank and they will call KTMF and handle the payoff and whatever is left they cut seller a check. You get bike same day. Even if your not taking out a loan your bank could help broker the deal, or at least give you some insight on how to handle it.
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  3. dougrender

    dougrender Bike Polo is not a Crime

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    No, I don't finance. I just want to give a cash lump sum and be done and own it outright. What does that imply? Thanks!
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  4. Roqon

    Roqon Been here awhile

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    You will need a Lien Release from KTMF. Don't dick around call the finance company and ask them how you should proceed. I'm thinking you wire them the payoff amount thru your bank and when the release is in your hand you pay the seller the difference & take title and possession of the bike
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  5. ktmjohn

    ktmjohn Been here awhile

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    The c of o is likely signed over by the dealer to the original owner. There is nowhere for owner to transfer ownership to you.
    Check with your motor vehicle office for valid proof of ownership.
    If the bike was never registered, never titled, you may be (not always) subject to paying tax on the original purchase... In addition to your purchase.
    Many states are looking for ways to retain tax revenue that slipped through the cracks.
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  6. WFO1

    WFO1 Living the Dream Supporter

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    I'd check with a local KTM dealer. States differ in procedures and it could bite you with extra fees. Some states mandate a actual title whereas some will allow an MSO or the like.
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  7. Hair

    Hair no wants or warrants

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    Like he said you could be stuck for some back registration fees. On the other hand, controlling the papering process from the CoO to a registration is a way to keep unwanted verbiage off the title and registration. Words like 'Off road only' on a title might not be a big deal in Colorado. But it can really harm a sale to another state.
    #7
  8. dougrender

    dougrender Bike Polo is not a Crime

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    Registering/titling and plating is not my chief concern. That's a nice to have. My main concern is solid chain of custody and ownership, i.e. that I have purchased this property from the rightful owner and have the correct paperwork to back that up. And yes, this is in Colorado.

    Thanks!
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  9. VxZeroKnots

    VxZeroKnots Long timer

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    So assuming the seller owned the bike outright and you handed him cash, there would be a brief window of time where he had your cash and had not signed over the title, so he would still legally own the bike.

    In this situation everything is the same except there is one more step and the window of time is a little longer....

    :hmmmmm
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  10. swimmer

    swimmer armchair asshole

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    Basically this.

    Unless you want to employ some sort of middle man, he needs your money to pay off the loan. You can transfer the funds directly from your account to the account of the loan, pay him the balance and take the bike and wait for the title to show up at his house where he then signs it over to you. Or, you could pay him the total amount, take the bike and let him handle the payoff. The former option obviously gives more traceability to the transaction. Once you take the bike the title has no value to him.
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  11. dougrender

    dougrender Bike Polo is not a Crime

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    Thanks for all the feedback. I'm actually going to pass on this opportunity, too many moving pieces for my comfort.
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  12. ljh535

    ljh535 n00b

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    I use my Credit Union for this -- apply for a loan from your credit union to buy the vehicle used. Credit Union contacts the current lien holder (KTM Finance) and pays off that loan, with remainder cut as a cashiers check to the seller. Credit Union retitles the bike to your name with your Credit Union as lienholder. Then pay off the loan early with no penalty and Credit Union comes off your title and you own the bike outright titled in your name.

    You get to ride the bike once current title is verified and while the Credit Union does the paperwork to re-title the bike in your name. If there's something fishy with the current title, other than just KTM Finance as lien holder, the Credit Union will find out before they pay KTM and the seller, deal falls through costing you nothing other than time to fill out the loan application. You and seller can bring the bike to your credit union to complete the transaction, he hands you the bike and signs over title, they give him the check for the sale amount minus what is due to KTM.
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  13. mtech1950

    mtech1950 Been here awhile

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    doug, i agree, pass
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  14. MeterPig

    MeterPig Meh

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    Yep, the mco is golden and it can get real murky real fast. Here is the crazy thing, the fact that the seller couldn't get enough liquid to buy it out himself temporary is enough to walk away.
    #14
  15. timeOday

    timeOday Long timer

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    If have had issues buying bikes when the title was not in hand a few times! I always did it on the basis that I handed over the cash and took possession of the bike, but you still have to wait for the title. It *always* takes longer than the seller thinks it will. And one time the title showed up with like 40K+ more miles than the bike ODO said. I believed the ODO based on bike condition, and in the end it didn't matter because the bike had no problems until it got stolen from my garage.

    But anyways, "clean title in hand" is a real selling point.
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  16. mtech1950

    mtech1950 Been here awhile

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    mso does not equal title
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  17. ljh535

    ljh535 n00b

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    Colorado and most big states use an electronic title (ELT) system these days, so presuming the bike is 2015 or newer, KTM Finance should be able to release the lien electronically once they get paid. The manufacturer's certificate of origin doesn't matter so much for reselling, though it does establish the original chain of custody from the manufacturer to the first owner, here KTM Austria the manufacturer, and the first owner being KTM Finance. For a resale, the current title and any liens on the title are what matter the most. (The manufacturer's certificate can come in handy to verify the as-built original motor serial number, factory emissions for certain states, etc.)

    Anyway, most lenders are hooked into their state's electronic title system these days to speed along these sorts of transactions. I've had no issues buying a used vehicle in good shape from someone who may have overspent their budget a bit, and can't buy themselves out of their original loan. But I let the Credit Union handle the financial transaction and re-titling in my name.
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  18. marbee40

    marbee40 Some Fear is Good Supporter

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    On a side note, MOST county sheriff’s will be able to run the VIN. Always check the VIN PRIOR to handing over $$. Too many thieves pawning off stolen bikes not to check.
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  19. dougrender

    dougrender Bike Polo is not a Crime

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    All is well that ends well. I found another seller of a comparable machine. It likewise had a lein, but through a local bank.

    Seller and I went to the bank, sat down with the banker, I handed seller the cash, we signed the bill of sale, which the banker notarized. Banker started the payoff process. A few days later the seller went to the DMV and got the clear title, delivered it to me (I was actually holding onto the title of his car, so we exchanged titles) and I was able to take that to the DMV, pay tax on the transaction price, and get a title in my name.

    Thanks for all the help on this!
    #19