Discover how to sell a car with a loan using our simple how-to. Use the following 5 tips to sell a financed car without paying it off and get the greatest rewards.
If you have decided to buy a new car, then one of the only obstacles in your path could turn out to be your old car – the one that still has existing loans attached to it. But, do not be worried because selling a car with a loan is fairly common practice and with lots of expert opinions to draw from. Let Mount Shine help you navigate the process and guide you on how to sell a car with a loan as smoothly as possible.
Sell A Car With A Loan: Overview [2023]
When it comes to selling a financed car, many people hesitate because of the supposed complexity of the whole process. However, contrary to the popular belief, it can be very safe and profitable to sell off a car that is still on a loan. In that case, you will have two options: a dealer and a private buyer. Although both of these options have their own pros and cons, selling the car to a private buyer usually brings more profit.
3 Things To Keep In Mind Before Selling A Financed Car [2023]
To sell a car with a loan is fairly common, especially among motor enthusiasts. However, before selling a car with a loan, you have to review your position to determine whether this is the best time to sell the car or not.
Here are the top 3 things to keep in mind before selling a financed car in 2023:
1. Get your payoff quote
2. Find the worth of your car
3. Check your equity status

1. Get Your Payoff Quote
The payoff quote is the first step toward determining if selling a financed car is viable when it comes to your lender. The payoff quote will display the loan balance, interest, financing extra fees, and prepayment penalties, if applicable.
2. Find The Worth Of Your Car
Use the appraisal method available on the internet in order to determine what kind of money your car can get you. Remember that the worth of your old car depends on certain factors. These include whether you are selling it to a dealer of old cars or to a private party. In the case of dealers, be prepared to get less money because they will buy a car considering their own retail profits from it. It is also important to make sure that you sell a car with a loan at a price that enables you to pay off the loan and get some profit out of the sale.
3. Check Your Equity Status
Make sure to check if you have positive or negative equity on a financed car. In case of positive equity, you will have some money left over from the sale to make a down payment for the new car. In case of negative equity, you will still have some loan balance remaining after the sale.
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What Information Do You Need Before Selling A Car With A Loan? [2023]
Selling a car with a loan might seem like a daunting task but with all the required information at your fingertips, it will become quite a simple process.

Contact the lender directly and ask them to specify the complete payoff amount including the prepayment penalties and so on. The equity has to be calculated based on the amount of money you need to pay back.
Contact the lender directly and ask them to specify the complete payoff amount including the prepayment penalties and so on. The equity has to be calculated based on the amount of money you need to pay back.
You also need to collect information regarding the car. These include the Vehicle Identification Number (VIN), the years on the car, the mileage, the wear and tear, and whether the car has ever been involved in an accident or not.
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How To Privately Sell A Car With A Loan? [2023]
Selling a financed car privately or to a private buyer often offers up much better prices, but the entire paperwork falls on you as the downside. Follow these 4-easy-step guide on how to privately sell a car with a loan in 2023:
Step 1: Take A Look At The Equity
Step 2: Clear The Title
Step 3: Plan A Safe Transaction
Step 4: Transfer Of Title

Step 1: Take A Look At The Equity
If you have positive equity, then to sell a car with a loan, let the buyer pay off the lenders and hand over the rest of the money to you. If the equity is negative, you always have the space to ask for negotiation which is absent in transactions with dealers who will base the amount on the retail value and not for personal use.
Step 2: Clear The Title
Make sure to be upfront about the loan status of the car before negotiating further with your buyer. Pay off the loan early if you can, allow the buyer to pay off your lender, transfer the loan to your buyer (if possible) or get a short-term loan if you have good credit and pay off the loan yourself.
Step 3: Plan A Safe Transaction
Since it is easy to get scammed while selling a car with a loan in a private sale, it is important to keep a bank as the intermediary while proceeding with transactions. Also double-check if all dues have been cleared and the title has been transferred before handing over the keys to the car.
Step 4: Transfer Of Title
Once you have agreed on a price with your buyer, you need to write a bill of sale and sign over the title to the new owner so that they can transfer the ownership of the vehicle and register it in their name.
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5 Tips To Sell A Car With A Loan [2023]
Follow these 5 tips if you want to sell a car with a loan effectively and without any hijinks in 2023:
1. Get all the information you can
2. Know when to sell
3. Consider the equity
4. Choose the buyer wisely
5. Prepare for a secure transaction

1. Get All The Information You Can
Get all the information on the car (VIN, mileage, accident, and odometer disclosure) beforehand in order to clock an accurate estimate for your car.
2. Know When To Sell
Know when it is the right time to sell your car. Covid-19 pushed up old car sales because the price of new cars increased by 21%. Those who utilized this perfect timing to sell their old car benefitted.
3. Consider The Equity
Always sell a car at positive equity so that you have some amount left over and all the dues to the lender get cleared.
4. Choose The Buyer Wisely
Select whether you want to sell the car to a dealership or to a private buyer.
5. Prepare For A Secure Transaction
Keep a bank as an intermediary while making transactions and always ensure that the buyer has paid off all the dues before handing over the keys.
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How To Sell A Financed Car Without Paying It Off? [2023]

In order to sell a financed car without paying it off, you can either negotiate with your buyer to pay the payoff amount directly to your lender or get the lender to transfer the loan to the buyer’s name, if possible.
Trading In A Car You Owe Money On [2023]

A dealer trade-in is usually the simplest way to sell a car with a loan. It is a simple transaction where if your vehicle is worth more than the loan payoff amount, the difference will be provided toward the downpayment for the new vehicle. If the payoff amount is more than what you can get out of your vehicle, then the surplus amount will be added to your new vehicle loans.