Wed. Jun 7th, 2023

how to sell a car that is financed

How to Sell a Car That is Still Financed

If you’re selling a car that is still financed, there are a few extra steps you need to follow. The first step is to find out how much you owe on your loan.

Your lender should be able to provide you with a ten-day payoff figure, which is a quote on how much you owe that stays valid for 10 days.

Find a Buyer

Selling a car that is financed can be a complicated process. It requires you to pay off the loan and clear the title of the vehicle before the sale. The specific steps you need to take will vary depending on the circumstances surrounding your situation, so be sure to contact your lender for more information.

If you want to sell your financed car without paying off the loan, you can try to find a private buyer who will buy it outright for cash. However, this can be difficult because many private buyers will not be familiar with loans and financing.

You can also sell the car to a dealership, which is usually a better option because they will handle all of the necessary steps for you. They are often more familiar with the paperwork associated with car loans, and they may offer you a higher price than a private buyer.

When you do decide to sell your financed car to a private buyer, you need to make sure they understand that they will still owe money on the vehicle until it is paid off. This can cause a lot of skepticism from potential buyers, so it’s important to explain the loan details before you start negotiating with anyone.

One of the best ways to get a decent price for your car when it is financed is to use an online vehicle buying service that offers cash for cars with an outstanding auto loan balance. These services typically use a computer program to match up vehicles with people looking for them, so you can get a fair price that won’t hurt your credit.

Another good option for people who have a car they are interested in selling is to trade it in at a dealer. They are often able to complete this process within a day and can give you more money for your vehicle than you can get from a private buyer.

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If your financed car has an outstanding amount, you can use the cash to pay off the loan and clear the title. This is a good idea because it will avoid you having to pay out extra money in interest and fees on the remaining balance.

Get the Title

If you’re selling a car that is financed, you’ll need to obtain the vehicle’s title before making the sale. The title is the official document that identifies the car and its owners, present and past. It’s a vital piece of documentation that helps to ensure that the vehicle is registered and in good condition.

A car title establishes ownership of a vehicle, and it is required for registration, insurance, and sales. It is also used to determine who is responsible for any issues or infractions that occur with the vehicle.

There are a variety of types of titles, and the one you get will depend on where you live. In states that use the Electronic Lien and Title system, the lender will send you an updated title with your name listed as the owner when you pay off the loan.

In non-title holding states, such as Michigan, Minnesota, New York, Arizona, Kentucky, Oklahoma, and Wisconsin, the car title is sent to you after the vehicle has been delivered to your driveway. It usually takes two to six weeks to receive the title.

Once you pay off the loan, your lender will send you a release of lien letter. From here, you can go to your state Department of Motor Vehicles or transportation agency to apply for a new title solely in your name.

If the seller of a financed car is cash strapped, it may be easier to get the title for a financed car through an escrow service. These companies act as a middleman between the buyer and the lender, helping to insure that the car is sold and the loan is paid off before the seller makes the sale.

Alternatively, you can try to sell the car to a friend or family member who will take care of the title transfer for you. This can be a convenient way to transfer the car’s ownership in your name and save you time, as it eliminates the need to go to a dealership and wait for your title to be processed.

Getting the title for a financed car can be tricky, however, and you may need to deal with a variety of pitfalls along the way. It’s a good idea to be prepared for all of the possibilities and know how to handle them, so that you can keep your title in good condition as long as possible.

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Pay Off the Loan

If you have a car that is financed, you may want to pay off the loan before you sell it. This will allow you to save money in interest payments and give you peace of mind that you have a clear title for your car. However, you should be aware that paying off the loan early could impact your credit score, and it might not be the best decision for you.

Your lender will likely send you a payoff statement or letter that will indicate the total amount you need to completely close out the loan. Unlike the balance shown on your monthly statements, which can change based on new charges and deductions, a payoff amount will stay steady.

You can use this figure to determine the payoff date you should set for your loan. The sooner you do, the faster the loan will be closed out.

One way to get a head start on your loan is to make small payments throughout the year. This will help you pay off the loan quicker and will also reduce your overall term length by several months.

Another option is to make a larger payment once a year. This can drastically shorten the term of your loan and will save you a lot of money in interest payments.

The only drawback to making a large extra payment is that you might be subject to a prepayment penalty from your lender. While this might not be the most ideal situation for you, it is worth considering if you have other high-interest debts or are struggling to make your monthly payments on time.

Depending on the terms of your loan, you may be able to ask your lender for a loan modification. This will change the terms of your loan by lowering your interest rate or extending the term. It is worth a try if you are having trouble keeping up with your payments or if you have improved your financial situation. A modification could also help you get a lower insurance premium for your vehicle.

Make the Sale

Selling a car that is financed can be tricky. The sales process can involve a lot of paperwork, and it can take months to complete. However, if you’re able to sell the car quickly, it can be a great way to make some extra money.

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Before you start, make sure to get an idea of what your car is worth. This will help you decide whether or not to sell it. It can also help you determine the best way to market it, as well as how much money you’ll make from the sale.

One of the most popular ways to market a car is through online auctions. You can use this method to sell your vehicle fast without dealing with the hassles of a dealership, which may include answering dozens of inquiries and arranging for test drives.

Another option is to place an ad in your local paper or on an online car-buying website. If you choose this route, it’s important to be as accurate as possible when listing your vehicle, including its mileage and maintenance history.

Once you’ve gotten a few offers, decide which one is the best. Then, you can either go with a traditional auction or a private buyer.

The best place to hold a car sale that includes a loan is at your lender’s offices. This will allow you to pay off the loan, transfer the title, and collect cash from the buyer. It also gives you a more formal setting for the transaction.

The best part about this process is that you’ll likely receive a higher dollar amount for your car. It’s also a good idea to find a car broker or an auto dealer who can handle the details for you. This will help you avoid any costly errors and get a better price for your car. It’s also worth considering using an escrow service, as this will save you time and money by keeping the sales transaction safe and legal.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.