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How do you sell a car with a loan?
I own two cars, an old beater that I love but never had the heart to sell, and a financed sports car. However, I’ve always been an avid cyclist, and it’s now to the point where I use a car maybe once a month. I feel like I’m just wasting money on the financed vehicle and want to sell it, but how do you sell a car with a loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
As a fellow cyclist and an environmentalist, I greatly respect the dedication!
To sell a car that still has a
car loan
, the loan will have to be paid off or transferred to the buyer before you can transfer the title
and complete the sale.If you’re selling the car to a dealer, they will have experience doing these types of transactions and will take care of all the paperwork for you. They can often have it all sorted within a day, but you likely won’t receive the fair market price of the car.
In contrast, if you’re selling the car to a private buyer, you can receive the total market value, but the sale involves some extra steps. If you’re selling to a private buyer and can’t pay off the loan before the sale, you can:
- Ask the lender if the loan can be transferred to the new buyer
- Ask the lender if the buyer can pay off the loan in exchange for the title
- Ask the buyer if they are comfortable paying first and letting you use the funds from the sale to pay off the loan before you transfer the title
Once the lender is removed from the title, you can finish selling the car by completing a bill of sale and transferring the title. You should also check with the DMV for any additional paperwork required in your state.
Finally, because you use your other car so infrequently, you should make sure you only have the coverage you need and aren’t overpaying. To compare quotes and purchase the right policy for you, download
Jerry
. A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and will even help you cancel your old policy!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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