How do I privately sell a car with a loan?

I found a buyer for my car on Craigslist, but I’m still paying off the loan for my vehicle. How can I privately sell my car with a loan amount still owed?

I’m glad you found someone to buy your car! Selling your car to a private party with a loan still attached is a bit more challenging than just selling to a dealership, but it is at least possible.
You’ll need to transfer the title to fully sell your vehicle, but your lender possesses the title until your loan balance is satisfied.
You will have to work with your lender to facilitate the sale. If you finance from a local institution or bank, then you can likely take the buyer to this location, have them pay you for the vehicle, and pay off the remaining loan amount all in a single visit. The buyer leaves with the vehicle and its title and you leave with some cash.
If your loan is provided by a larger lender with no local locations, you will need a temporary operating permit from the DMV or use an escrow service to allow the buyer to drive the vehicle until full ownership is transferred.
Before you try selling your car, check the value of your car on a site like Kelley Blue Book. If you owe less than the car is worth, you’ll likely make a profit selling your car. If you owe more on the loan than the car is worth, you are upside down on your loan and will have to pay the difference.
When you sell your car, make sure you update your car insurance policy. Whether you’re shopping for low rates for a car you already own or for a new car you’re thinking of buying, Jerry can save you money. Just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan. Jerry customers save an average of $879 a year!
Good luck selling.
Matthew Macgugan
Answered on Dec 01, 2021

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