Buying car from rental business without title

Question

I am looking to buy a 2013 Subaru Outback from a rental car company for $16.7k.

However, when I buy the car, I will not receive the title. They said they do not want to get the title and tie up their money with their bank until I pay for the car.

Can I get screwed in this situation? I would typically never NEVER pay without getting the title, but this seems different as it's a business.

On the other hand, it's a very small mom and pop type business, and they even pressured me fairly hard to pay with cash so they could avoid taxes. Would they really avoid taxes or is that a scam? Either way it sounded like they were setting up a scam. I finally convinced them to accept a cashier's check made out to the business's name.

If we have a bill of sale from the DMV along with witnesses (my friends and theirs), and a cashier's check, can I get screwed in any way? (e.g. they decide not to pay the title off from their bank, etc.)

What can we do to make the trade safer if them paying off the lien first isn't an option? Can I make some bill of sale addendum that says they must pay it off, lift the lien, and send me the clean title?

Also, I carfaxed it, and it appears good on that end. Not stolen, one owner.

Summary of facts: - Carfax good, car not stolen (had a suspicion) - Paying with cashier's check (is there a better method?) - Car is under lien from bank and I won't receive title at time of handing over check - I will drive away with car if deal is closed

Honestly the guy doesn't seem that bad of a guy, but neither would a good scammer. I can't tell, but the situation seems a little shady, not willing to pay off the title first and being very insistent about cash at first. I believe the opportunity for me to get screwed is there since I'm not getting the title at time of purchase. Can anyone please help?

Answer 1

I would steer well clear of this. The risk is that they take your money but don't pay the bank. This wouldn't require dishonesty - what if they run into financial trouble? Any money of yours that they have that hasn't gone on to the bank yet might end up paying off other debts instead of yours.

It's not clear if the idea is that you are paying them all the money up front or will be making payments over time, but either way if they don't clear the lien with the bank then the bank can come after the car no matter who is in physical possession of it.

That would leave you without either the money or the car. In theory you'd have a legal claim against the seller, but in reality you'd probably find it hard to collect.