How to Get Rid of a Car When You Owe More Than It Is Worth

People get rid of cars every day. Some people choose to trade in their vehicles, while others sell the car themselves. However, when you owe more than your car's worth, getting rid of it is a bit tricky. There are several ways to get rid of a car when the loan balance exceeds the vehicle's value.

Instructions

1

Trade in the vehicle if you plan to buy a new car. Dealerships will offer a trade-in value, which is often less than the vehicle's worth. This difference is called "negative equity," and dealerships tack this amount onto your new car loan.

2

Sell the vehicle for more than it's worth. If you owe more than your vehicle's worth, sell the car and pick a sale price that's enough to pay off the loan balance. To get your asking price, clean the vehicle's interior and exterior before showing the car to potential buyers, and make any needed minor repairs.

3

Pay the remaining balance. If a potential car buyer is unwilling to pay more than the vehicle's worth, agree to sell the car at a lower price and then pay off the loan balance (the difference between what you owe and the vehicle's value) with your own funds.

4

Allow someone to assume the car loan. To get rid of a car loan when you owe more than the car is worth, find someone to assume the car loan. Contact your auto loan to see if the company allows car assumptions. If so, another person can take over your car payments become responsible for the vehicle.

5

Consider a voluntary repossession. If you can no longer afford the vehicle and you're unable to sell or trade in the car, take the vehicle back to the dealership. The dealership will sell the vehicle at auction. If the proceeds aren't enough to pay off the loan balance, you're obligated to pay the difference. If not, dealerships report the delinquent balance to the credit bureaus.