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So, the owner has the car registered in another state, I take it. The question I guess, is how long have they lived in Ca? Most states require registration transferred within 90 days. If he's been there longer than that, it is not a valid registration, and for a private party sale, I would think this would raise some red flags for a finance company. Heck, it would raise some red flags for me as the buyer. I have learned that any time there is any issue with registration in a private party deal, it's best to just walk away.
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