How to Sell a Used Car With a Lien

When you still owe a lender money on your car, the lender holds a lien, which means that the lender has the financial right to sell the car. When you want to sell the car yourself, you must get the lender to release the lien before you can transfer the title to the buyer. The only way to get a lender to release the lien is to pay off the rest of your loan. You can either do this before selling the car or you can use the buyer's purchase funds to pay off the loan and release the lien.

Instructions

Remove the Lien Before Selling

1

Call your lender to find out how much money you owe on the car.

2

Pay off the loan using your savings, credit card or money borrowed from a friend or family member. You can repay these funds as soon as you receive the money from the sale of your car.

3

Take out a personal loan or home equity loan if the amount of money you owe on the car is greater than the amount you expect to receive in its sale and you cannot afford to make up the difference. You will be able to repay much of the loan with the proceeds from the sale. Pay attention to the interest rate because you will need to make payments on the loan after the sale of the car. The length of time to full repayment depends on how big of a difference you have between the amount you owe and the car's value.

4

Ask your lender for written notification that it has released the lien on the vehicle. This is important because the title will not be updated to remove the lien listed on it before the sale and the buyer will need assurance that you own the car.

Complete Transaction with the Buyer

5

Arrange a time for your buyer to meet you at your lender's local branch to pay for the car and receive the title.

6

Call your lender and have an agent prepare the paperwork for the transaction so it will be ready when you arrive.

7

Repay the balance of your loan with the money from the buyer, along with your personal funds if the sale price was less than the loan balance. At this point, the lender will either give you the title immediately or provide you with documents releasing the lien that you can take or mail to the motor vehicles department to receive the new title for the buyer.