How do you sell a car when you have a loan?
My 47th birthday is coming up and I want to sell my car so I can upgrade and buy my dream car. The only issue is that I still need to pay off the loan. How do you sell a car with a loan on it?
That’s so exciting; congratulations on buying your dream car! Although it might seem impossible to sell a car when you have a loan, you can trade in your vehicle with a dealership.
Here is how you to sell or trade your car with a loan on it:
- Determine your payoff amount. Contact your current loan lender and ask what your payoff amount is. Paying off the loan is the only way for the lender to no longer have a lien on the vehicle.
- Calculate the trade-in value of your vehicle. Use pricing guide resources, like Kelley Bluebook or Edmunds, to get an idea of what the market value of your car is.
- Figure out your equity. To determine if you have positive or negative equity, subtract the payoff value from the estimated cost of your car. A positive value indicates positive equity, and your vehicle is worth more than what you owe. If the number is negative, this means you have an upside-down loan and owe more than the value of the vehicle.
- Step 4: Provide the necessary documents to your dealer, including:
- Information on your loan
- Government-issued ID
- Vehicle registration
- Proof of insurance
- Car keys or fobs
- A printout of your trade-in value
Once you have picked out the car, review the terms and make sure you understand what is agreed upon to close the deal on your new ride. Check the numbers on the contract using a calculator. You should expect to find a copy of the new car contract in the mail from your lender.
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