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How do I buy a car that has a loan on it?

I want to purchase a car from a private seller, but he told me he still owes money. How do I buy a car that has a loan on it? Is it even possible? I'm going to pay cash for it.

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Some people may be scared to take on a car that’s still being financed, but as long as the seller is upfront with you about what he owes, you should be fine to acquire the car and its
loan
.
If you’ve done your homework—finding the value of the car, getting a Carfax report, and so on—you’re ready to buy the car.
You essentially have two options:
  • Go with the seller to his lender and pay off the loan (to ensure he doesn’t run off with the money)
  • Have a dealer act as a broker. The dealer will buy the car from the seller and resell it to you. You’ll pay a little extra to make sure everything goes smoothly
Never hand over cash to a seller with a
car lien
, as they could just take the money and run.
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