A cosigner vouches for your ability to repay a car loan by agreeing to take on the responsibility for it if needed. If you fail to pay as agreed, the lender can go after your cosigner for the debt. However, having a cosigner normally doesn't affect your ability to sell the car. Before you can sell the car, the existing lien must be satisfied. After the lien is satisfied, the cosigner is released from liability and you can proceed with the sale.
Although a cosigner can be forced to pay for the car if you default, he doesn't have any legal rights to the vehicle. While it's technically possible for a co-signer to be listed on the title, it's not the norm. The title, rather than the loan, is what designates ownership. Unless the cosigner is named on the title, he can't keep you from selling the car.
Selling with a Lien
After satisfying the lien, the title is released by the bank. If you're trading the car in or selling it to a dealership, it will handle all the paperwork needed to release the lien. You and any other person on the title will need to sign over the title. Before handing over the keys, get the details in writing from the dealership.
Video of the Day
If you're selling the car to a private individual, you'll be dealing directly with your lender. Go with the buyer to the lender's office to conduct the sale if you're using the sale proceeds to pay off the loan. You'll get back any money over the payoff amount.
If the lender isn't local, consider using an escrow service to protect you and the buyer. The buyer places the money in an escrow account and the company uses the money to pay off the lien and releases the title. You won't have access to the money until the title is in the buyer's possession.