Want to know how to sell a car with a loan? Selling a financed car is lawful but can be relatively tricky to achieve. As a standard practice, the loan financier usually holds on to the car title until the loan is completely paid. To sell a car without a title is almost an impossible task. And this makes selling a car with a loan a tedious and extremely complicated process. However, there are processes you can follow to sell your car with a loan on it. If you are curious to know how to get this done, read along as we proceed in this article.
How Can I Sell My Car With A Loan?
Selling your car with a loan is completely legal. However, you will still be liable to the full value of the lien until your repayment is completed. The company or individual that financed the car purchase is considered a part-owner. It is usually in possession of the car title. One of the major key processes in selling cars is the transfer of ownership to the legal buyer. And this can’t the processed without a title. However, with the right information and steps, your car sale with a loan can still be processed.
Step 1: Figure Out The Loan Payoff Amount
This is an important step to take in the process of trying to sell a financed car. The loan financier company or bank usually has their name on the car title. It keeps possession of it until the loan is fully repaid. Since your loan repayment must be completed before you can gain full ownership of the vehicle; asking the lender for the loan payoff amount will give you a clear idea of the outright cost payable for you to become the full owner.
Step 2: Determine Your Car’s Market Value
Car market is relatively unstable which makes the price of cars change from time to time. This is largely due to the effect of the global pandemic which has resulted in the scarcity of cars. Knowing your car’s worth at the moment you are selling it off is crucial; towards having an idea of the estimated value of trading to either a private party or dealership. Researching your car’s worth is quite easy. You can do it using one of the several valuation tools and pricing guides available.
Step 3: Determine Your Car Equity Status
Your vehicle equity status must be considered to know whether it is positive or negative. This is a critical step to knowing if it is profitable to sell or halt the process. A car equity status is deemed positive when the estimated value of the vehicle is higher than the expected loan repayment. On the other hand, it is considered negative in situations where the outstanding balance of a loan is bigger in amount than the car’s value or worth. Negative equity status is alternatively called “the upside-down of loan” and will likely attract a significant additional cost.
Step 4: Prepare for the Transactions and potential sales obstacles
Once the above steps have been processed. The next step is to prepare for negotiations with potential buyers and the lender. With the required paperwork and mutual agreement between all parties involved, a smooth transaction process can be achieved irrespective of the equity status of the vehicle. However, certain lenders may be reluctant to release the car title without a full loan repayment. Consequently, buyers may be unwilling to trust the process this can make the transaction a little bit tricky and delicate.
Frequently Asked Questions:
Can I sell a car that I still owe money on?
Yes, it’s possible to sell a car that you still owe money on, but you’ll need to follow specific steps and coordinate with your lender to pay off the loan.
What is a car lien, and how does it affect selling a car with a loan?
A car lien is a claim by the lender on the vehicle until the loan is paid off. When selling a car with a loan, the lienholder’s approval is required to transfer ownership.
How can I find out if there’s a lien on my car?
You can check for a lien on your car by examining your car’s title, contacting your lender, or checking with your state’s Department of Motor Vehicles.
What is the process for selling a car with a loan?
The process typically involves obtaining a payoff quote from your lender, finding a buyer, paying off the loan, and transferring the title to the new owner.
Can I sell the car for more than the loan amount and keep the extra money?
If you can sell the car for more than the loan amount, you can keep the extra money after paying off the loan and settling any transaction costs.
What happens if I can’t sell the car for the full loan amount?
If you can’t sell the car for the full loan amount, you will be responsible for covering the remaining balance to satisfy the loan.
With few important considerations, selling a car with a loan is possible. However, you will still be liable for the full value of the loan until your repayment is fully completed.