Selling the car which is still under financing might be difficult. This is because it involves a lot of things to consider such as the price that you would place on the car as well as the balance that you need to pay to clear the lien of the vehicle. In addition to this, there are specific states that do not allow selling a car that is still under financing. In case you are planning to sell your car and get out of the existing loan obligation you might need to read on the things included in this guide.
- Contact your current lender and try to determine that you still owe from them. You can also pay the lender a visit and take a look at the paper works that they have. As soon as you contact or visit them schedule the loan 30-day payoff. This will provide you with the needed time to look for a car buyer who would purchase the car. Make sure to pay the remaining balance of the loan on or before the payoff date. This is to avoid being charged with interest daily in case you fail to pay on time unless you have a zero-percent interest rate.
- In case you obtained the car loan from a bank, you need to inform the bank representative that would be selling the car. You also need to ask the personnel on how to secure a lien release. This is an official notice from the bank stating that the lien is satisfied and is also required for the transfer of title. Make sure to find out whether you can go to the bank to secure the release or how long it would take for the process to be completed after paying the loan balance.
- Try to determine the actual value of the car by using the Kelley Blue Book or Edmunds Website. This would be useful in deciding how much price you would place on the car when you sell it.
- Check if the price that you would place on the car would be enough to pay the loan off or if you would be earning extra amount as profit.
- Advertise the car that you offer for sale. Make sure to provide pictures of the vehicle on the ads in order to increase the chances of getting the attention of more potential buyers. You can also provide a schedule of test drives for potential buyers who want to take the car for a drive before buying it.
- Inform the buyers that the car you are selling has a lien on its title and you would be able to transfer the ownership of the car by the time you pay the loan off. It is also advisable for you to take the buyers when you go to the lender to pay the remaining balance of the loan. This would make the buyer more comfortable and secured.
- Contact the state’s motor vehicle office to know all of the requirements needed in selling the car. Be ready to accomplish some additional procedures required and make sure to sign your car’s title in designated areas.
- Pay the bank or the lender with the payoff amount and secure the release of lien. Make sure to bring the buyer with you while doing this and provide him with the copy of the lien release. Try to accomplish the processing of all the paper works before giving the vehicle to the buyer. Always bear in mind that you still own the vehicle until the paper works are fully accomplished.