You can sell your car even if the bank still owns the title, meaning that the bank is the lien holder. Once you satisfy your lien, the bank will give you your title, which is required to sell your car inmost states. Some states do allow you to transfer ownership while a lien is present, but most buyers know this is risky because of the chance of your non-payment.
Payoff Amount
As soon as you pay your vehicle loan in full, you will become the sole titled owner. Before trying to sell your car, call your bank to get the vehicle's payoff amount. Ask also for the vehicle per-diem amount, which is the cost of interest added to your loan daily. In the case of a higher interest rate or long-term loan, the per-diem amount can cost more than $10 per day. If you can sell your car for more than the payoff amount, you can keep the profit. If not, you must come up with the remaining amount due to put toward the payoff beyond the sale price. Also find out about your bank's procedure for releasing the title. Some may issue the title to you immediately with a lien release. Otherwise, find out how long you can expect to receive either the lien release and title, or the new title without the bank listed as the lien holder.
Advertising
You do not have to advertise that the vehicle has a lien on it or that you do not have the title. You will incur "tire kickers," or people who come by to look at your car but don't intend to buy it at the moment, so you should concentrate on finding a buyer first. Once you do have one, explain that you still owe money on the vehicle. This is not uncommon for a car sale, and your buyer may even need to pursue a loan himself. You should be clear about your lender's title or lien release procedures, so you are able to let your buyer know how long it will take to complete the transfer ownership.
Payoff Procedure
If your bank is local, you can go in with your buyer to pay the loan off in full, whether your'e using just the buyer's money or having to come up with your own. It is advisable to have your buyer go with your to the bank to complete the payment, as you'll likely find the buyer is not comfortable handing a stranger her money without being sure of what you'll do with it. If your bank is not local, place a phone call to your bank to allow the buyer to make payment on the loan. If you owe money in addition to the sale price, pay it off before the buyer pays, this way the bank can let the buyer know the loan has been satisfied with his payment.
Time Frame
The time frame for completing the transaction can be the sameday, or it can take weeks. In states that mail out titles, you can wait up to a month before you receive your lien-free copy. If your bank can provide you with the necessary lien release and title, you can expect the process to take less than a week if it has to be mailed. If your bank is local, you should be able to complete the process very quickly.
Considerations
If your buyer plans to take a loan from the same bank you owe money to, the bank can handle the pay off of your loan and the title. You can also let your buyer know where you have your loan if she has not decided where to finance. You should also be aware of the date of your next payment while trying to sell your car. If you have another payment due during the time your vehicle is for sale, you must make the payment. Be sure to call your bank again to ask for the new payoff amount, as some of your payment likely goes toward interest.
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