How To Sell A Car With A Loan

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Are you trying to sell your car but you still have an outstanding loan on it? Selling a car that hasn’t been paid off is possible, but you may wonder what your options are. You might have to do a little bit of legwork, but you can learn how to sell a financed car and move on to your next vehicle. 

This article provides a step-by-step guide on how to sell a car with a loan. It also discusses alternatives to selling a car with a loan, such as refinancing or negotiating with your lender. 

Can you sell a car with a loan?

Yes, you can sell a car with a loan on it, but there are a few things you must do. If you are the owner and the car is worth more than the loan, you can sell it and use the proceeds to pay off the loan. If you owe more on the loan than the car is worth, you may need to figure out how to pay off the loan first.

Once the car is paid off, you can transfer the car’s ownership to the new owner by signing the title over to them. The process of selling a car with a loan may vary depending on the laws in your state, so you may want to consult with a local car dealership or an attorney to confirm you are following the correct procedures.

How to sell a car that has a loan

Selling a car that has a loan is easier than it seems. Follow these steps to make the transaction as smooth as possible:

Step 1: Collect information on your car loan 

To sell a vehicle that has a loan on it, you need to know the details of the loan. This includes the amount you still owe and the terms and conditions of the loan. You can find this information in the loan documents, or you may contact your lender. 

Step 2: Find out what your car is worth

The next step is to determine the car’s value. You can do this by researching comparable vehicles put up for sale in your area and seeing what they are selling for. You can also check online pricing guides or car review websites like If you have spare cash, have your car appraised by a professional. This will give you an idea of how much you can expect to get for your vehicle.

Step 3: Determine your payoff amount

To determine the payoff amount on your car loan, you will need to obtain a payoff statement from your lender. The statement will include the amount due to pay off the loan in full. This amount will consist of your remaining balance, accrued interest, prepayment penalties, and other fees as agreed in the loan terms.

Step 4: Determine your equity

In addition to calculating your payoff amount, you should also determine your equity in the car. This is the value you have in the car beyond the amount you still owe on the loan. To calculate your equity, subtract the remaining balance on your loan from the value of your car. For example, if your car is worth $10,000 and you still owe $5,000 on the loan, you have $5,000 in equity. This is called positive equity. But if you still owe more than the car’s current value, it’s considered negative equity.

Step 5: Get in touch with your car loan provider

Once you have calculated your payoff amount and determined your equity, you will need to contact your car loan provider to discuss your options for selling the car. Your lender may provide you with information on how to proceed or may be able to help you sell the car directly. It’s important to communicate openly with your lender during this process to ensure everything goes smoothly.

Alternatives to selling your car with a loan

You might consider the following alternatives to selling your car with a loan” 

Refinance your loan

One option is to refinance your car loan, especially if you have negative equity. This means getting a new loan with a lower annual percentage rate (APR) or more favorable terms to pay off the existing loan. This can reduce your monthly payments and make it easier to pay off your loan. Depending on your financial circumstances, you may also opt to extend the loan term, this will reduce your monthly payments, but you’ll pay more interest overall over the loan term.

Negotiate with your lender

Another option is to try to negotiate with your lender. You can work out a new repayment plan or a settlement agreement if you are having difficulties making payments. This will make it easier for you to pay off your car loan. Your lender will also help you explore your options to decide whether to pay off the loan and sell the car or refinance it.

Work to pay it off 

Finally, you can work to pay off the loan on your own. This may involve making extra payments or cutting back on your expenses to save the money you need to pay off the loan. You can sell the car without any restrictions once you pay off the outstanding loan balance.

Sell your financed car with ease

Without a bit of research, selling a car with a loan could prove to be complex. The first step is collecting the loan information and determining the car’s value. You will then need to obtain the payoff amount and determine your equity in the car. After that, you can either pay off the loan yourself or negotiate with your lender to find a solution that works for both parties. 

Once you pay off the loan, you can transfer the car’s ownership to the new owner by signing the title over to them. Finally, if you’re not sure selling your car is the best thing to do, you have alternatives like refinancing the car.


How do you sell your car if it is still financed by the bank?

If the bank still finances your car, you will need to contact the bank and arrange to pay off the loan before the sale can be completed.

Does selling a financed car hurt your credit?

Selling a financed car does not necessarily hurt your credit unless you neglect to pay off the car loan.

Does it matter whose name is first on a car loan?

It does matter whose name is first on a car loan. The parties listed on the loan as borrowers are responsible for loan repayment.

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