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How do I sell a used car with a loan?

I want to sell my second-hand Honda Civic so I can upgrade to a new model. I haven’t paid off my loan yet, though. How do I sell an older car if I still owe money on it?

avatar
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Selling a car you owe money on might seem impossible but rest assured; it is possible. You just need to find a buyer who can either pay the loan in full or refinance the loan in their name.
To sell a used car with a loan, do the following:
  • Determine the payoff amount for your loan. Paying off the loan is also the only way for the lender to release their ownership over the car.
  • Figure out the current value of your vehicle. Use resources like
    Kelley Blue Book
    or Edmunds to get an idea of the value of your car.
  • Determine your equity. To calculate this, subtract the payoff value from the estimated cost of your car. A negative means you have an
    upside-down loan
    . The profit from selling the car will go to your lender, and you will pay the remaining balance out of pocket. A positive means you will sell the car, pay off the loan balance, and pocket the remaining value.
  • Transfer the
    title
    to the buyer. Complete this sale by providing a bill of sale.
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