You cannot transfer your car payments and loan to another person unless your lender allows it. Because most auto loan providers do not allow loan or payment transfers, you must actually sell your vehicle to the person who wants to take over your car payments. Unless someone simply wants to pay your payments for you, expect to sell your vehicle for your loan's payoff amount.
Contact Your Lender
Call your lender to find out more about its loan payoff process. Obtain your loan's payoff amount, which is the amount of money your buyer will have to provide to your lender to satisfy your loan. This is necessary to transfer ownership; most states and lenders do not release a title unless its lien is satisfied. Find out from your lender how long it will take to process the payoff paperwork and title or lien release and let your buyer know. Make any payments due during the sales process so you don't default on your loan.
Loan Term Differences
Your current loan terms were based on the information provided by your credit report, your income and your vehicle's value at the time you initiated the loan. The person you want to transfer payments to likely has different credit and income than you. For this reason, lenders cannot transfer payments or loan balance and offer the same payments, as rates or lending requirements may differ. Also, your car's value may have changed. If you are upside down in your car loan, or owe more than your car is worth, your buyer may have to provide a down payment to obtain his own loan.
Considerations
State required fees for the transfer of vehicle ownership may also alter your buyer's loan amount. Most states charge taxes on a vehicle purchase. Some states charge tax on the vehicle's value as determined by the state's appraisal method, not the sales price. Gifted vehicles may also require tax. The buyer can expect to pay state applicable title and registration fees to transfer ownership. State fees and taxes are in addition to your vehicle's loan amount, so your buyer may need a down payment.
Time Frame
Your buyer can apply for your loan's payoff amount through your lender, which can simplify the sales process; your lender can pay off your loan quickly and process the title for the new owner. Your buyer can use any auto loan provider she'd like. The loan approval process can take up to one week, which doesn't include the time required by your bank to process paperwork. Once your buyer is approved, arrange for him to pay your loan by accompanying him to your lender or calling in to authorize your buyer to pay toward the loan.
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