Trapped between the pitfalls of owning a vehicle and the difficulty of wanting to sell it to a buyer even if you still owe money and haven’t paid for it yet? You are not the first. It is possible to sell a car even if you are still in debt on the loan. This simply adds one step to the sale transaction: closing the loan with the lender.
If you’re wondering where to start with selling your vehicle and balancing payments, here’s what to do.
Call your lender to determine the best way to close the car loan. At the same time, ask about how to get a lien release, which states that there are no outstanding loan obligations on your car.
If you owe more on your loan than you can readily pay off before a sale, you can close the loan and transfer ownership at the same time.
If none of these options are satisfactory, conduct the sale at the institution that holds the privilege. The seller can pay off the loan balance with the proceeds from the sale and immediately sign the title to the new owner. Call the lender in advance to facilitate this transaction. If the privilege holder is out of state, obtain a temporary operating permit from your state’s Department of Motor Vehicles. Once the loan is paid off, you can send the signed title to the new owner. While this option may imply greater trust on the part of the buyer, remind them that it is also in your best interest to transfer the title as soon as possible to eliminate personal liability.
Leased cars represent a different situation. If you wish to transfer the current lease to a new owner, we recommend that you use a lease transfer service.
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