How to Sell a Financed Car That You Have Had for 5 Months

Selling a car you have only owned for five months should prove challenging. The challenge lies in paying off your loan, not in selling the vehicle. New vehicles suffer the greatest amount of depreciation once driven off the lot, meaning you likely owe more than the vehicle's private-sale value. Most states do not allow title transfers if a lien exists on a vehicle's title, and most knowledgeable buyers know the risks associated with purchasing a financed vehicle that isn't paid off, even if your state allows such transfers.

Instructions

1

Call your lender to retrieve the vehicle's payoff amount. Ask for a 10-day payoff; loan balances change daily because of interest charges unless you have a zero-percent loan. Ask for the loan's per-diem amount, or the amount of interest added daily, so you can add it to the payoff amount after the 10-day period.

2

Find the private sale value of your vehicle by visiting KBB.com and Edmunds.com -- both offer a different value but can help to determine the correct asking price. Subtract the vehicle's resale value from your loan amount to determine the amount you must come up with to satisfy the loan and receive the title (if in a title-holding state) or the lien release.

3

Check your funds. Set aside the money needed to pay off the loan in full. Call your bank again to find out how to pay off the loan, obtain the title or lien release and the time it takes to do so. This way you and your buyer know what to expect.

4

Advertise your vehicle for sale in local or surrounding area newspapers, classified advertisements, used car publications and Internet car classifieds. Not all advertising methods are free, but the more people you try to reach, the better chance you have of selling your vehicle.

5

Include as many pictures and as much detailed information about your car (such as price, warranty and mileage along with year, make and model) as possible in your advertisements. Meet with potential buyers until you find one interested. You do not have to advertise that your vehicle has a loan on it; wait until you have an interested buyer.

6

Tell your buyer where you have your loan, and if he plans to finance the vehicle, you can have him apply to the bank. Otherwise, make arrangements to go to the bank together to pay off the loan balance or contact your bank to make your remaining payment and allow the buyer to call and make his payment.

7

Wait for the title or lien release if your bank is not local. Otherwise, the bank should supply you with all you need while you are there in person. Sign your title over to the buyer following your state's requirements and provide her with the original lien release (you cannot keep the original).

8

Take your plates off of the vehicle and give the owner the keys. Make sure all your belongings are out of the car before releasing it to the new owner. Follow your state procedures for returning license plates and remove the car from your insurance policy.