Selling Your Car Before It’s Paid Off

selling car Selling Your Car Before Its Paid OffThere are lots of reasons for selling a vehicle, even one that still is under a vehicle loan. Sometimes the payment just becomes unmanageable and there is nothing else to do but sell the vehicle and choose a less expensive one. Trading in a vehicle that is still under a loan agreement can be difficult, as often the amount still owed is greater than the trade-in value credited to the vehicle, so selling your car privately may be the best way to go. There are a few things to keep in mind as you undertake selling your car, though.

First, you must remember that technically you are selling something that does not belong to you in the first place. Your lender holds ownership of the vehicle, so you will need to disclose this fact to any interested buyer. A buyer will expect to receive the title to the vehicle upon completion of the sale, and you will have to get the title from the lender holding your loan. Lenders will only release the title to the person named in the loan documents, so they will not send it directly to your buyer. You should be clear about this with any potential buyer in order to avoid conflicts or having someone back out of a purchase.

Next, you need to make sure you are selling the vehicle for more than you owe on it, otherwise you will have to make up the difference in order to get the title from the loan holder. Once you have the title, you simply fill out the portion of the title pertaining to the sale of the vehicle, sign it, and send it to the Department of Licensing. The title will be officially transferred to the new owner and a new copy of the title will be mailed directly to the new owner’s address.

Finally, be sure to deal honestly with any potential buyers concerning the details around getting the title transferred. Be willing to show your loan document cover page to prove the amount you still owe on the vehicle, and that the sale will effectively pay off the loan and thereby release the title for the new owner. Buyers are frequently hesitant to enter into this type of a purchase due to concern that they will shell out their money only to find that there is still an outstanding amount owed on the vehicle they just purchased, and they can’t get the title. Prepare an official bill of sale detailing the terms of the sale of your car to your buyer, including the details required to pay off the loan and transfer the title. Having these details in writing will put most buyers at ease and smooth the process of your sale.

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