How Can I Get Rid Of A Car That I Still Owe Money On

202204-can-I-still-sell-car-if-owe-money

Selling a car with a loan | Cars.com image by Paul Dolan

By Cars.com Editors

April 29, 2022

There are many reasons you lot may decide to sell your motorcar earlier information technology's paid off: The loan payments are besides high, the motorcar hasn't lived upwardly to its test drive, or information technology merely doesn't encounter your needs anymore. Information technology is possible to sell a car fifty-fifty if yous still owe money on the loan. This simply adds a step to the sales transaction: closing the loan with your lender.

Related: How to Transfer Ownership When You Sell Your Car

Your best grade of action will depend on how you plan to sell the car and whether yous have positive or negative equity in the vehicle. Although negative disinterestedness (owing more on the vehicle loan than information technology's worth) tin pose a claiming, the recent rise in used-auto values may help some sellers avoid this scenario.

If you're wondering where to beginning with selling your vehicle and getting your payments squared away, hither's what to exercise:

Commencement, judge the current value of the vehicle. Variables that impact your car's value include its mileage, status, accident history and market weather. The recent fasten in used-car prices ways your vehicle may be worth more than than you lot think; using vehicle valuation tools and browsing similar used-car listings in your expanse will help you identify your vehicle's current market place value.
Next, check how much coin you nonetheless owe on the loan to determine if you have positive or negative equity in the vehicle. Confirm your payoff remainder online or call your lender. If the vehicle's value is higher than the payoff amount, you have positive equity in the car, and you'll get the difference back as a check from the lender. Yet, you may find the automobile'south payoff corporeality is higher than its value; in this scenario, you have negative equity and will need to pay the difference when you close the loan and sell the car.
When you're ready to sell, phone call your lending institution to make up one's mind the all-time way to close out the car loan. At the same time, ask about obtaining a lien release, which states that at that place are no outstanding loan obligations on your car.
If y'all owe more on your loan than you tin can readily pay prior to a sale, it'due south possible to close the loan and transfer buying at the same time.
When selling to a private party, you may want to conduct the sale at the lien-holding institution. Hither, you can pay off the loan rest with the sale gain and immediately sign over the title to the new owner. Call the lending institution beforehand to facilitate this transaction. If the lien holder is out of country, obtain a temporary operating permit from your land'southward department of motor vehicles. Once the loan is paid off, you tin ship the signed title to the new possessor. While this choice may involve more faith past the buyer, remind them that it's also in your best interest to transfer the title equally presently as possible to eliminate personal liability.
Selling to a dealer or trading in your vehicle when you still owe coin is an easier style to offload it than selling to a private party. Most dealers will handle the transaction and work with your lender to close out the loan. When trading in with positive disinterestedness, the difference can exist applied to the new machine's cost or you lot'll receive a check for the difference. If you take negative equity in the vehicle, you'll likely have two options: Pay the divergence or whorl the negative equity into your new car loan. Take circumspection with the latter route since it tin increase interest payments and the length of the loan.
Leased cars represent a different situation. If yous want to get out of your current lease by transferring it to a new owner, we recommend using a lease-transfer service.

More From Cars.com:

What Affects My Car's Value?
Selling to a Dealer: Taxes and Other Considerations
Tin Yous Trade in or Sell a Car With a Loan?
Now Is a Practiced Time to Sell Your Extra Used Car; Here'south Why
How Does Selling to a Dealer Work?

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Cars.com'south Editorial department is your source for automotive news and reviews. In line with Cars.com'south long-continuing ethics policy, editors and reviewers don't take gifts or free trips from automakers. The Editorial department is independent of Cars.com's advertising, sales and sponsored content departments.

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