How do I buy a car from an owner that has a loan?

How do I buy a car that still has a loan? I want to buy my sister’s Jeep Wrangler, but she still owes money.

Answer
Buying a car with a lien and knowing how to deal with the outstanding balance can be overwhelming. That said, it is possible to buy a car with a loan on it.
To start, find out how much your sister owes on her car loan, as the payoff amount is typically different from calculating how many monthly payments she has left. Once you know how much she owes, you can decide how you would like to move forward.
If you can afford it, you could opt to pay off the loan for her or use an escrow service. Once paid off, your sister will receive the title and can officially transfer it to you.
Another option is to see if your sister’s lender would allow a loan transfer. If they do, the lender would check your credit and ensure you meet the requirements to borrow; then, you can take over the loan.
After you officially own the vehicle, don’t forget you will need car insurance on it. If you want to save money, the Jerry app is a good place to start. A licensed broker that offers end-to-end support, Jerry gathers affordable quotes from over 50 top insurance companies. The average user saves $879!
Phoebe Mah
Answered on Nov 24, 2021
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