Auto Loan Scenario Playbook 

Purchase from Dealership

What to ask for

• Buyers Order from Dealership
  • This will have all the information for the vehicle (VIN, Year, Make Model, Mileage) as well as the pricing information (Sales Price, Rebates/Discounts, Sales Tax, Dealer Fees, Down Payment, Total Amount to Finance)
• What if they do not have a buyer’s order yet?
  • Request the VIN, exact milage and sales price at minimum. Once we have this information, we can estimate the sales tax and fees
    • TN Sales Tax = Sales Price x .07 + $88
    • Dealer Fees – Add $1,000 to your total to estimate possible fees
    • Be sure to let member know that until we have a final buyer’s order, the information that we can provide is an estimate.
    • Obtain buyer’s order before closing loan and be sure to adjust your loan amount

What if the Buyer’s Order does not include Sales Tax?

• If the Dealership is in Tennessee, the buyer’s order should have the sales tax figured in
• Out of State Dealers will not typically collect sales tax, so we will need to add enough to our requested amount to cover the sales tax. The tax will be charged for the state that the member lives in
  • TN Sales Tax = Sales Price x .07 + $88
  • If Member lives out of state – contact their local county clerk to ask how much sales tax is and how the check needs to be made out
• When the loan is booked, one check will be issued to the dealer, and a second check will be issued to the member’s local county clerk for the sales tax

How does the check for taxes need to be made out?

• Checks for taxes in TN will be made payable to the county clerk of the county the member lives in
  • Example – Madison County Clerk, Gibson County Clerk, etc.
• If member lives in a different state – we will need to contact their local county clerk and ask what percentage their state charges for taxes on vehicles and how they want the checks made out
  • This is very important because if the check is made out for too much, or not payable to the correct place, they will not accept it

How does Leaders Lien get recorded on the Title?

• The dealership should take care of recording our lien

Who do I contact if I need to follow up on the Title?

• Member
• Dealership

Purchase from an Individual (Clear Title)

What to ask for

• VIN, Exact Mileage, Sales Price
• Add the cost of sales tax to the sales price
  • TN Sales Tax = Sales Price x .07 + $88
  • If member lives out of state – contact their local county clerk to ask how much sales tax is and how the check needs to be made out
  • A separate check will be issued to the member’s local county clerk
  • Member can pay taxes out of pocket, but must bring those funds to Leaders so that we can issue a cashier’s check for that amount directly to the county clerk

What information will we need from the seller to close the loan?

• Seller’s Name, Phone Number, Email Address & Address
  • The seller will be required to sign an LPOA (Limited Power of Attorney) Form
• Copy of the Front & Back of Title
  • Review Title for ownership information & Possible Liens
    • If there are multiple owners and the conjunction AND is used – we must get each owner’s contact info and each owner must sign. If the conjunction OR is used, only one owner must sign the LPOA Form & Back of Title
  • Check must be made payable to owner(s) on title

Why do we need this information?

• Having a signed LPOA on file for the seller allows our title clerk to sign on behalf of the seller
  • If the seller does not sign the back of the title at the time of purchase, our title clerk can take care of that for the member so they can get it registered
  • If the title is lost, we can file for a lost title

How does Leaders Lien get recorded on the Title?

• The seller will need to sign the back of the title and provide the title to the member when the member gives them the check and takes possession of the vehicle
• The member will need to take the title and check for sales tax to their local county clerk to pay taxes and get the vehicle registered
• The check for sales tax should include the following memo - Lienholder: Leaders Credit Union - to ensure our lien is recorded
• County clerk will send the title to Leaders

Who do I contact if I need to follow up on the Title?

• Member
• Seller (using the contact information be obtained for the LPOA)

Purchase from an Individual (Financed)

When speaking to a member about the process of purchasing from an individual who still has the vehicle financed – be sure to make it clear that they will not be able to get the vehicle registered until we receive the title from the seller’s lienholder. We have no control over how long it will take to get that to us. We will reach out to them just as soon as we receive it so they can go get it registered.

What to ask for

• VIN, Exact Mileage, Sales Price
• Add the cost of sales tax to the sales price
  • TN Sales Tax = Sales Price x .07 + $88
  • If member lives out of state – contact their local county clerk to ask how much sales tax is and how the check needs to be made out
  • A separate check will be issued to the member’s local county clerk
    • When loan is initially booked, we will deposit the funds for taxes into their savings account and place the funds on hold until we receive the title from the current lienholder
  • Member can pay taxes out of pocket, but must bring those funds to Leaders so that we can issue a cashier’s check for that amount directly to the county clerk

What information will we need from the seller to close the loan?

• Seller’s Name, Phone Number, Email Address & Address
  • The seller will be required to sign an LPOA (Limited Power of Attorney) Form
• 10 Day Payoff Letter from Current Lienholder (No Screenshots)
  • Check will be made out to the current lienholder for payoff amount
  • If vehicle is being sold for more than the payoff, the difference can be issued as a check to the seller – must be the person on the Title
• Copy of the Front & Back of Title
  • Review Title for ownership information
    • If there are multiple owners and the conjunction AND is used – we must get each owner’s contact info and each owner must sign. If the conjunction OR is used, only one owner must sign the LPOA Form

Why do we need this information?

• Having a signed LPOA on file for the seller allows our title clerk to sign on behalf of the seller
  • If the seller does not sign the back of the title at the time of purchase, our title clerk can take care of that for the member so they can get it registered
  • If the title is lost, we can file for a lost title

How does Leaders Lien get recorded on the Title?

• Leaders will overnight a check to the current lienholder to pay the seller’s loan off, along with a payoff letter that will provide instructions to mail the title to Leaders
• The current lienholder will release and mail the title to Leaders (this can take a few weeks)
  • The title clerk will contact the loan officer to let them know when we have received the title. The loan officer will reach out to the member to let them know that it is here and ask which location they would like to pick it up from
  • The member will also pick up the check for sales tax at the time. The check should be issued with the following memo – Lienholder: Leaders Credit Union
• Member will take the Title and the check to their local county clerk to get the vehicle registered and pay sales tax.
• The County Clerk will mail the title to Leaders to hold until the loan is paid off.

Who do I contact if I need to follow up on the Title?

• Member
• Previous Lienholder (using information from payoff letter)
• Seller (using contact information we obtained for LPOA)

What if the member reaches out asking about the Title?

• Reach out to the title clerk to see if the title may have arrived recently

Refinance (From Another FI)

What to ask for

• VIN, exact mileage & approximate payoff on current loan
  • Add $300 to balance that shows on credit report to make sure you have approval for enough to cover the full payoff

What information will we need to close the loan?

• 10 Day Payoff on current loan
  • Most Financial Institutions, you will be able to find a phone number for and get the 10-day payoff through their automated system
  • If you are unable to get this – have the member call
• Account Number
  • Typically shows on their credit report or can get it when you call for Payoff Info 
• Overnight Address for current lienholder
  • We will have most of these saved on the UPS website
  • Can also get this on the automated system
• $25 Title Recording Fee will need to be added to loan application on the processing page
• We will overnight a check to the current lienholder to payoff the loan with a payoff letter instructing them on where to send the title

How does Leaders Lien get recorded on the Title?

• When we receive the title and lien release from the current lienholder, we will send the title to the county clerk to have our lien recorded and they will mail it back to us

Who do I contact if I need to follow up on the Title?

• The previous lienholder