It might be hard to sell a car you still owe money on without paying it off, but it’s not impossible. To help you through the process, here are some steps and things to think about:
Know the terms of your loan:
Read your loan deal carefully to know how much you have to pay back, if there are any fees for paying off the loan early, and how to sell your car while it is still funded.
Figure out how much your car is worth:
To determine how much your car is worth on the market right now, use Kelley Blue Book, Edmunds, or NADA Guides. This will show you whether you owe more on the car than it’s worth (negative equity) or less than it’s worth (positive equity).
Get a Money-Back Quote:
Contact your lender to find out the current payback amount. This amount includes the leftover loan balance plus any fees for paying off the loan early.
Get someone to buy it:
You can sell the car or trade it in at a shop. Most of the time, private purchases bring in more money, but selling can be more accessible.
Tell the buyer about the loan:
Claimants should know that the car is funded. Full disclosure is essential for a deal to go smoothly.
Make sure the buyer can get financing:
If the buyer needs money to buy the house, they can either get a loan to pay off their current loan or work with their lender to do it themselves.
You should use an escrow service:
You should use a trusted service to handle the deal. When the buyer pays the trust service, it pays off your loan and sends you the rest. This keeps everyone safe and ensures the loan is paid off before the title is given over.
Finish the Deal:
The lender will take back the lien on the car once the loan is paid off. After that, you can give the buyer the title. Ensure you follow the rules in your state when you move the title and register the car.
Pay Any Unpaid Amount:
If you owe more on your car than it’s worth, you’ll have to pay the difference between what it’s worth now and how much you owe.
Let your lender and insurance company know:
Let your lender know when the deal is done, and stop or move your car insurance so you don’t have to pay for it again.
Different Choices
Trade-In:
If the dealer offers to pay off your loan, they will handle the paperwork. Buying another car from them can also roll any negative equity into a new loan.
If you want to sell your car, you can:
Services like CarMax or websites like Carvana may offer to buy your leased car and pay off the loan simultaneously.
It’s essential to stay aware and follow the law to ensure a smooth transaction.