You can sell your vehicle privately or to a dealership even if you still owe money on your auto loan. If you owe more than your car's value or your sales price doesn't satisfy the loan balance, you must pay your lender to release the vehicle's lien. Otherwise, you can keep the profit you make from your sale.
Obtain Your Payoff
To determine if you'll need to come up with extra money to satisfy your vehicle loan, retrieve your car's payoff amount. Call your lender to find out the amount of your payoff and your loan's per-diem amount. A per-diem is the amount of interest you pay toward your loan daily. If you make a payment during the time you are trying to sell your car, call your lender again to obtain the loan's payoff amount, as some of your car payment goes toward interest charges.
Determine Vehicle Value
Despite your loan payoff amount and a likely desire to make a profit, you can simplify the car sale process if you ask for the correct private sale value. Several appraisal guides are available online, all of which offer different prices for vehicle values. Use Edmunds.com and the Kelley Blue Book website to access private sale values for your car. Choose the correct condition for your vehicle during the appraisal process, as condition can change your car's value by thousands of dollars. Use an average of both appraisal guides to determine a fair selling price.
Working With a Buyer
You don't have to advertise that your vehicle still has a loan balance when trying to sell your car. It is not unusual for a person to sell a vehicle while a loan still exists. Before you sell your car, find out your lender's payoff process, including the time that it takes to get your title or lien release so you can better work with a buyer to transfer ownership quickly. Once you have an interested buyer, arrange to bring him to your bank or credit union to satisfy your loan. If you owe more than the vehicle's value, have your money ready to pay off the loan at the same time.
Paying Off the Loan
If your lender is not local, arrange to send in any amount you still owe on the loan before your buyer pays. Then, arrange to have your buyer contract your lender to discuss your account information and make her payment. If the lender is local, go together to complete the payoff process. Once you have a lien release, give the original to the buyer, a requirement in most states to release the lien from the title. If your state sends the title to lien holders instead of registered owners, known as a title holding state, retrieve your properly signed title and go to a motor vehicle office with your buyer to transfer ownership.
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