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Can you put a lien on a financed car?
I’m planning to sell my car but I haven’t fully paid off my loan yet. Can there still be a lien on a financed car?
Christelle Agustin · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, liens still apply to financed cars. Whether you’re selling your financed car to a dealership, online marketplace, or private seller, you will still be responsible for paying off the loan. This means that if you fail to pay off your loan, your lender will be able to repossess your car from the new owner you’ve sold it to—which makes it difficult to find buyers willing to buy a financed car in the first place.
If you’re having a hard time finding a buyer for your financed car, here are a few options:
- Sell to a dealership. You can sell your financed car to a dealership in-person or online and use the cash you receive from the sale to pay off your loan. The better condition your car is in, the better the sale price will be.
- Sell to a private buyer. Similarly, you can sell a car with a lien to a private buyer and use the cash from the sale to pay off the loan. Only after you pay the loan can the buyer transfer their title to the car.
- Trade your car in. If you’re open to upgrading your car, you may transfer your ongoing car loan terms from your financed car to the new car.
Regardless of these options, your best bet is to pay your loan off before selling a financed car. An unpaid car loan can cause your credit score to go down which can hurt your pockets even more since
credit score affects car insurance rates
.MORE: [How to negotiate with a car salesperson](https://getjerry.com/advice/how-to-negotiate-with-a-car-salesperson
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- Gregory R.
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