When life happens, staying on top of monthly loan payments is challenging. Selling your vehicle can certainly help free you of a decent-sized financial burden.
To sell your car with a loan, follow these steps:
Step 1: Contact your lender and ask for your payoff amount, which is the total you’ll be required to pay to clear the loan. You can also ask for advice on how to best handle this transaction.
If your lender is a bank, they may suggest you sell your vehicle privately and have the buyer come to the bank with you to fill out the necessary paperwork.
If you are using an online lender, they will suggest you go to a partnered bank to complete this transaction.
Step 2: Determine the value of your vehicle. Use free pricing guides, like Kelley Bluebook
or Edmunds, to get an idea of your car’s value. Then, negotiate the price with the buyer. Step 3: Figure out your equity. Subtract the payoff amount from the estimated value of your car.
A positive value indicates positive equity—your vehicle is worth more than what you owe on the loan. You can put the remaining money toward other debt—or pocket it!
A negative value means you are upside-down on the loan
. You owe more than the vehicle is worth. Therefore, the remaining loan balance after the sale of your vehicle will need to be paid out of pocket. If you don’t have the money to pay off your loan, consider taking out a personal loan through a bank or credit union to get the funds.
Step 4: Go to the DMV with the buyer to complete the sale. You’ll need these documents:
Information on your loan, such as your payoff amount
Government-issued ID, like your driver’s license
A printout of your trade-in value
Good luck selling your car!
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