You’re in the market for a different car or you simply want to get rid of the car you are
currently driving. That’s typically an easy move to make, but it isn’t so easy if you owe
money on your car. With an active lien present, there are some steps you’ll need to take
first before you can relinquish your car to a new owner.
1. Contact your lender. You need to find out what the loan pay off amount is for your
car. Contact your lender and ask for this information. Ask a bank representative how you
can make payment to satisfy the loan. You may be able to visit a local branch, make your
payment and await a new title, a process that can take weeks to complete.
2. Determine your car’s worth. If you were to sell your car today, would you know what
it is worth? That information is readily available online through sites such as Kelley Blue
Book. Visit KBB to get the current value of your car and use that amount as the basis for
your sale price. If your sale price is $6,700 and your loan pay off amount is $2,500, then
your profit is $4,200.
3. Advertise your car, mention conditions. You can still attempt to sell your car with a
lien on it, provided that the buyer knows that you need to pay it off. You may not have the
funds available to pay off the loan and secure the title, desiring to use the funds derived
from the sale of the vehicle to pay off your debt. A buyer can either choose to wait of the
paperwork to clear or take possession of your vehicle now with title arriving later.
4. Transfer the loan. You may be able to hasten the transfer of your car to a new buyer
by signing over the loan to him. With this arrangement, the buyer assumes your loan
payments and pays you the difference for what the car is worth. You’ll need to involve the
lender in this step to assure that the note can be transferred. The new owner can either
make monthly payments or pay off the loan immediately to obtain title.
Be honest with the buyer if your car has a lien that still needs to be resolved. If he wants
the car badly enough, he’ll work with you. If not, then pay down your loan and take title
before attempting to sell it