Can you privately sell a car with a loan?

How do you sell a car privately if it is not paid off? I’m moving out of Florida for a career opportunity, and I don’t plan on bringing my car with me. I haven’t paid off my loan, but my brother wants to buy it for work.

Answer
Congratulations on the new career opportunity! Even though your loan is not paid off, you can still sell your vehicle to someone. There are a few extra steps to this process to privately sell a car with a loan.
Here’s what you need to do:
  • Find out your payoff amount. Ask your lender what your payoff value is. Paying off the loan will remove the lender from the title of the vehicle.
  • Calculate the market value of your car. Kelley Bluebook and Edmunds are good resources to determine your trade-in value.
  • Determine your equity. To calculate this, subtract the payoff value from the estimated cost of your car. A negative number means you have an upside-down loan. This is when you owe more than the car is worth. You will need to give the lender all of the money from the car’s sale, and you will pay the remaining balance out of pocket. If this number is positive, you will sell the car, pay off the loan balance, and use the remaining money to pay off other debts.
  • Transfer the title to the buyer and provide a bill of sale to finalize the transaction.
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Phoebe Mah
Answered on Dec 06, 2021
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