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How to sell a car that you owe money on?

Getting a car sold is a very convoluted and messy activity, but what can make it even trickier is when the car you are selling actually still has money owing on it. You can breathe a sigh of relief, however. People do this kind of thing all the time, and it is all perfectly legit. Of course, if the payments have all been made, selling a vehicle is certainly easier. But if you are intent on selling a financed vehicle, there options available to you.

You can, of course, pay off the remaining debt using the money you get from the sale. Then after that you are able to transfer the title to the person who is purchasing the vehicle from you. There are variables that can have an influence on the process, such as where the loan you have is held, and who you are selling to. So without further ado, here is how to sell a car that you are still owing money on.

Enquire if your lender can guide you

It is important that the first step is to make an enquiry to whoever it is that has lent you the loan in the first place. That enquiry will be concerned with how you are going to make the loan go away so you can sell the vehicle. They will have all the knowledge required to do this because they do it often.

Find out the exact amount you need to pay off

When you do finally sell the vehicle, you will technically have no money outstanding on the loan. You will instead be unwinding said loan while you sell the car, or before-hand. Next, you will be wanting a payoff letter so that everything is official. It is a letter from the lender outlining the changes the amount you have to pay off goes through each day.

Get the title cleared

The sale won’t be completed by the title of ownership is passed on to the buyer of the car. You will, of course, be required to sign it. You may find that if you don’t provide a title that has been cleared, the person buying the car won’t want to go through with the transaction.


Trading a car in for a new one is often easier and simpler than going the private sale route. You will find that dealers handle these types of transactions on a regular basis, so doing the paperwork and other things is easy for them. Some dealerships buy cars without trading, so you may not even have to get a new car. Get to know more about the best options for trading in old cars for cash.

There is, however, a trade-off. And that trade-off is money. Having the process of selling a simplified doesn’t come for free. Selling privately will get you more money. The worst case scenario with trading in a vehicle that you still owe money on is the transferral of debt to the new automobile, which can lead to problems further down the line. Good luck!