You can still sell a car with a loan balance and buy a new car too. I will share several ways to sell a car you bought on loan and pay the remaining loan with car sales.
How to Sell a Car with a Loan Balance
Can you sell a car with a loan? If you wish to sell your existing vehicle but aren’t sure whether you can do it or not, this post is for you. Selling a car with a loan isn’t a charging process, but there are a few extra steps. Having a car loan means that the lender owns a fraction of your car.
They can hold the title or be listed on the title to prevent you from selling the vehicle and not paying back to them. The whole process depends on a few factors so that the steps can vary from situation to situation. In this post, we share the ultimate tips on how to sell a car privately with a loan.
Payoff amount check
To get the process started, you need to know how much money you owe to your lender. Request a payoff letter, an official document that notes the amount of money you have left to cover. However, have in mind that this amount contains the interest and additional fees.
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While you are in touch with your lender, don’t mind asking about the process of how to sell a car privately with a loan. They already have experience with this and allow you and the buyer to meet at their office to complete the procedure.
Eliminate the loan
The best option is to pay off the loan in total, as this will make your car more attractive in the eyes of buyers. The buyer will get a clean title, which won’t make them think twice about purchasing your vehicle. While you can still sell a car with a loan, the process might not be so straightforward at all.
- To get the lender’s name off the car’s title, you can obtain another loan.
- Make sure to pick a loan with low-interest rates, such as a personal loan at your local bank.
- After you complete the selling process, you can immediately return the money to the lender.
- Also, make sure to check the current market value of your vehicle to get a fair price.
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Transfer the title
When you sell your car to a private party, they want to prove that the vehicle has a clear title. As we already mentioned, buyers prefer to buy a car that has a clear title. This means that no one claims ownership over the car. If the car has a loan, the name of the lender will still appear on the title.
To prove that no other party holds ownership of your car, you should get a lien release from your lender. This confirms that they no longer have the right to claim a part of your car.
Selling to a dealer vs. selling to a private buyer
Trading in your car to a dealer is easier when compared to selling to a private buyer. You can always find a reputable dealer that will take over the tedious paperwork and compile the procedure for you. The process is pretty convenient, as they can finish it within a day. However, there is one disadvantage to trading in your car to a dealer. The cost for their service comes in the form of a lower price, so you will get less for trading your car.
If you want to make sure you get the best price, sell your car to a private buyer. We already explained how to sell a vehicle with a loan balance, but there is an option to sell a car without a title. However, this can only happen if the buyer has enough trust in you and you have the complete documentation completed so that they won’t face problems during registration.