How to Sell a Car While Still Making Payments on It

With careful planning, you can sell a car that you still are making payments on. However, many states do not allow transfer of ownership while a lien exists on the car's title. If you have loan, either a bank name is listed on the title or the bank keeps the title until the loan is satisfied (in some states). Also, buyers are weary of purchasing a car that can be repossessed for your non-payment, even if title transfers are allowed. Learn how to work with your lender and buyer to sell your car while still making payments on it.

Instructions

1

Get your car's payoff amount. Call your lender to find out how much you owe, as this is what you'll have to sell your car for to satisfy the loan.

2

Prepare your car for sale by cleaning it and removing your personal items.

3

Determine how much you can sell your car for. You can use Internet-based appraisal guides, such as those offered by the Edmunds or Kelley Blue Book websites (see the Resources section). If you cannot sell your vehicle for as much as it is worth, you will have to come up with the difference to remove the vehicle's lien.

4

List the vehicle for sale. Try eBay Motors or AutoTrader (see the Resources section), although depending on where you live, your area may offer other used car classifieds, like newspaper ads. Take pictures of your vehicle and list all features and details about the car in the ad.

5

Meet with possible buyers. Once you have one interested, explain that there is currently a loan on the vehicle that you intend to pay off with the sale price. Arrangements may be made for the buyer to pay the bank directly to assure the buyer that the money is going to satisfy the car's loan.

6

Show the buyer your payoff amount and go to the bank together or call the bank in your buyer's presence. If you're selling the car for more than the loan balance, you will keep the difference.

7

Have the buyer pay off the loan and obtain the lien release, if the bank allows.

8

Give the buyer the title and the original lien release, if they are sent to you (some will not send to another person). Keep copies for your records.

9

Follow any additional motor vehicle requirements in your state, such as notarizing signatures, completing a title application or providing a bill of sale. Call your state's motor vehicle department for specific instructions.