You can sell your vehicle while you still have a car loan. However, you'll have to pay off your loan before you can transfer ownership, as required by most states. Even if your state doesn't require a lien release for title transfers, most buyers won't purchase your vehicle because of the risk of repossession.
Before You Sell
Expect to pay the remainder or your car loan if your vehicle sales price is not enough to pay off the loan balance. Call your bank to obtain your loan's payoff amount and check your vehicle value to determine whether you'll need to provide additional funds. You can access private sale values through the Kelley Blue Book website and Edmunds.com. If you vehicle's sale value is more than the car's payoff amount, you can keep the profit. If not, ensure you have your funds ready before you attempt to sell your car.
Time Frame for Transfer
Ask your lender how to obtain a lien release or title once you sell the car. Determine a time frame so you can plan accordingly. Some states send the car's title to the lender, in which case, you must wait to receive it from the bank before signing it over to the new owner. In states that release the title to the registered owner, you'll only need a lien release. Find out how long your bank needs to complete the lien release or title process once the loan is satisfied. You may find that you can receive the lien release the same day that you pay off the loan or that you have to wait several weeks to receive the necessary paperwork.
Dealing with a Buyer
You don't have to immediately tell potential buyers that your vehicle still has a loan. Once you have an interested buyer, explain the pay off process and time frame for the sale. For buyer peace of mind, arrange for the buyer to make his payment to your lender. If your bank is local, take the buyer to the bank to make the payment, or at least offer the option. Provide any excess payment at the same time to prove the car loan is paid off. If your bank isn't local, call your bank to authorize the buyer to call and make the payment himself.
Financing Issues
If your buyer plans to finance the vehicle, suggest she use your bank as her lender. Doing so can quicken the sales process, allowing the bank to handle most of the transfer paperwork for the buyer since it holds the lien. Otherwise, the buyer can apply for a loan wherever she'd like, but expect the overall finance and purchase process to take up to a week. In this event, you may want to take a deposit from the buyer to ensure the sale.
0 comments:
Post a Comment