Selling with Loan

[NickR]

I am thinking about selling my Mustang. I currently have a loan on it still. Anyone know how to sell a vehicle 3rd party while you still owe on it. Thought about selling it so a dealer or carvana but they aren't giving me exactly what I want for it.

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[sk47]

Hello; You will have to make arrangements to pay off the loan amount owed before you can transfer the title. Odds are the title has a lien attached for whatever institution made the loan. If you owe less than the car will sell for the amount owed will be taken out and you keep whatever is left.
If you owe more than the car will sell for you are upside down. That means you will still owe the rest of the loan amount after the selling amount is taken off. As a private person I would not make a deal with another private person who is upside down. Either way the institution holding the lien will have to be involved.

Get in touch with the company/bank holding the lien to find out their procedure. My guess is it will not be as simple as the seller signing over the title.

 

[br_an]

You could call the lienholder and ask how to go about it.

 

[young at heart]

Selling a car with a lien on it to a private party is a royal PITA, depending on how bad he wants it and his tolerance for red tape. Bottom line is the lien has to be satisfied before you can get the title. There are several ways to do this (assuming you have equity) but they’re all complicated and require creativity. If you’re upside down it would literally be several orders of magnitude more difficult.

My advice would be to figure out some way to pay the car off (short term unsecured loan from your grandmother, etc.) and then approach the sale with title in hand.

 

[Hillsndale]

You definitely need to call the lender to arrange it. It has been many years but when I bought a car in that situation it was SUPER easy. We had a prearranged appointment at the sellers bank that his loan was through. Did the paperwork there and was done reasonably quickly.
I'm sure hundreds if not thousands of people do that same thing every day across the country.

 

[SupremeFocus]

Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

 

[BrianH87]

Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

Why would anyone care who pays off the loan? This doesn’t make any sense. Dealerships will certainly pay off your loan if it means getting a sale and another vehicle to sell. Been through this quite a few times myself.

 

[NASteve]

Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

never had issues with either vehicle I bought during COVID, banks and dealers were easy to deal with. If the dealer is over charging for a car then yes the bank is hesitant to loan the money because they don't feel the value is there but it was like that before COVID.

 

[br_an]

Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

Wait what??? Sorry, no, that's just not true

 

[Cobra Jet]

I did this quite a few years ago with me being the Seller.

My 92 GT had a lien at that time. Prior to listing it, I called the bank and asked the procedure and asked for the current payoff figure as of that day. Payoff figure was noted and was told it would most likely change by the time the car sold. Procedure was the Bank would get the title ready if I gave them advance notice and they would have the title sent to a local branch. All I had to do was go there with the Buyer and the paperwork and cash transaction would take place right at the branch. I walk away with the remainder, Buyer walks away with title and car.

So I listed it for sale. My asking was already higher than what was owed, so I already knew what my approx. payout would be from the bank, even if payout figure had adjusted by time of sale.

Once I had a Buyer, I explained the car had a loan but here's how that wouid be handled (as explained above). The Buyer was perfectly fine with that, made me a cash offer from my listed price and we agreed to a date to meet at the bank to complete the transaction.

I then called the bank, told them I would be able to go to the local branch on X-da/timey to satisfy the loan. They sent title to that branch, the Buyer and I met at the branch and completed the transaction. Bank took the payment to satisfy the loan and marked title in their system as satisfied. Bank then gave me the diff back in cash, gave me a letter that loan was satisfied and gave me the title. The bank also gave the Buyer a notarized document for his own records stating that he had just purchased the vehicle. I signed the back of the title, handed it to the Buyer with the keys and we parted ways.

It's really not a difficult process - the most difficult part was just getting a day where both of us could meet at the branch.

Every Loan Institution or Bank is different - you can't go by what we tell you, other than past experiences. You have to call your Lender and ask them their procedure. Of course if the Buyer is an out of State Buyer (not just an over the State line buyer, but one from distance), sure that can cause some complexities - and some Buyers won't consider buying until YOU satisfy the loan.

 

[Interceptor]

My opinion based on market reports of used cars.
The used car market has peaked.
Used car prices should be falling.
Your car is now losing value every day.
If i was selling a car i would get a quote from the usual suspects,, carmax, vroom, carvanna, and sell to highest bidder today.
Your are fighting
1. Private sale with loan payoff
2. Private sale unable to finance buyer
3. Buyers don't trust private sales
4. I'm thinking no warranty
Today's market has higher finance rates, inflation concerns, the war in Ukraine. Fuel prices, polictical uncertainty, etc.....
People are waking up to the new world and are putting the brakes on.

 

[Ock]

Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

Wat? I sold my car to a dealer during covid and they paid it off and put $$ in my pocket. IDK where you got this but its not like this everywhere.

 

[br_an]

IDK where you got this but its not like this everywhere.

It came from a dark secret place

 

[BimmerDriver]

Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

Yeah, no, that's not accurate.

I did this quite a few years ago with me being the Seller.

Great answer, CJ. I've gone both ways on this (no, it's not dirty, but as both buyer and seller).

Generally speaking, there is a high level of trust required here. Most of the time that I've done it, it was not like @Cobra Jet described it, rather, the buyer wrote two checks, one to the bank for the loan balance, and one to the seller for the equity remaining. After the bank processes the payoff, they send the title to the seller who then signs it and forwards it on to the buyer.

As I wrote, I've done this often, and although twice we had issues, that was due to the bank, not the people involved, and it all worked out in the end.

 

[Mike Pfeifer]

Before covid you could just trade in your car To any dealer and get another car from the dealer. Now since COVID dealerships or loan banks aren’t letting other dealerships pay off then loans so now your out of luck stuck with your car unless you can paid it off yourself.

I think you are mistaking loans with leases.

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