How to Buy a Motorcycle When the Owner Still Owes the Bank

by Jamie Lisse ; Updated July 27, 2017
Buying a motorcycle when the owner owes the bank is challenging but not impossible.

Buying a previously owned motorcycle is similar to buying a previously owned vehicle. Just like a car or truck, a motorcycle must be titled in the state where it is registered. When the owner still owes the bank for the motorcycle, the title is usually held by the bank instead of the owner. This presents a challenge because the title must be transferred when the motorcycle is sold.

Step 1

Ask the motorcycle owner to call the bank while you are with the seller. Once the owner makes the call, ask him to tell the customer service representative that you are authorized to talk with the bank about the motorcycle loan account.

Step 2

Confirm the payoff amount on the motorcycle loan. This lets you know whether the seller has misrepresented the amount due on the loan. If the amount due is more than the amount you are planning on paying for the vehicle, ask the owner how the difference will be covered. The bank will not release the title until the loan is paid off in full.

Step 3

Tell the representative that you are interested in buying the motorcycle. Ask whether the lender will take the payoff amount from you and send the title directly to you, or to your bank if you are financing the cycle. Some lenders will do this while others will only send the title to the owner currently on the loan. This means that you may have to pay the owner and let him pay off the loan to get the title released. If this is the case, write up a document stating that you are making payment and that the title will be signed over to you when it arrives. Have the document notarized.

Step 4

Coordinate with the owner to sign the title together, once it arrives. If it is being sent to you or your bank, you can ask the seller to come sign it when it arrives. Otherwise, you must wait for the title to arrive at the seller’s home. Once the title arrives, the seller must sign the title over to you so that you can register the motorcycle in your name and get insurance on it.

About the Author

Jamie Lisse has been writing professionally since 1997. She has published works with a number of online and print publishers. Her areas of expertise include finance and accounting, travel, entertainment, digital media and technology. She holds a Bachelor of Arts in English.

Photo Credits

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