How to Sell a Car with a Loan to a Dealership

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Driving a car (Photo: @marcobertoliphotography via Twenty20)
It’s not unusual to want to buy a new car when your present one still has a lien on it. Maybe the car is beginning to have problems, or you just want a change. When you don’t have the cash to pay off the loan on your present car, it is possible to sell a car with a loan to a dealership. Here’s how.

Know what your car is worth

An easy way to estimate the value of your car is to check Kelley Blue Book. From the homepage of the website, click on the My Car’s Value button. Then, click on the button for Kelley Blue Book Values to see what your car’s value is when selling as a trade-in and to a private individual. Fill out the form with the year, make, model, and mileage. Submit the initial form and continue to answer the questions about your specific vehicle. Ultimately, you will be shown your estimated values for trade-in and sale to an individual.
Kelley Blue Book also offers a feature to start the trade-in process online, which is one way to sell a car with a loan to a dealership. It is, however, advisable to explore all options before making a commitment.

Know what kind of car you want

Most likely, you want to buy another car once you sell a car with a loan to a dealership. So, you should do some research and get an idea of what your next car will be. It’s often simpler to trade in your old car with a lien to the dealership where you’re buying your next car than it is to sell a car with a loan to a dealership and then buy another car from another dealership.

Visit several dealerships

Combine your shopping for a new car with your shopping for a dealership to sell your old car and the remainder of its loan. Visiting as many dealerships as possible will yield the most options. This way, you can pick the best deal for you.
Be frank with the representative from the dealership about the amount of the lien on your car that you want to sell, what car you want, and the payments you can potentially make on a new car. Also, make the Kelley Blue Book value of your car known. Transparency will not only smooth the process but it also shows you are knowledgeable and prepared.

Strike a deal to sell a car with a loan to a dealership

Once you have a few offers on the table, so to speak, pick the one that yields the best sale price of your present car relative to the financing deal that you get. Don’t be afraid to negotiate; the worst that could happen is you are told no. The best that could happen is getting a better deal, either in terms of a higher sale price for your old car or better terms for your next car.
Be aware that the amount of your lien is a major factor in striking a deal. The dealership, in buying a car with a loan, absorbs the cost of that lien. So, for a car with a trade-in value of $10,000 and a lien of $5,000, the best case scenario is to sell that car to the dealership for $5,000. There are a lot of factors in selling a car with a loan to a dealership, but it is possible to strike a deal that makes all parties happy.