How to Sell a Car You Still Owe Something On

How to Sell a Car You Still Owe Something On
A classic car with a "For Sale" sign.

Contact The Lender

Contact the lender and ask for the lien payoff amount. A lien is a legal claim that a lender or other third party holds on your car. This claim is what prevents you from transferring ownership without settling an outstanding balance. Also, ask whether there are any specific procedures to follow in selling your car to a third party.

Make The Sale

Arrange to have the buyer meet you at the lien holder’s business location. If the lender will accept payment directly from the buyer, recommends you have the buyer make the payoff in cash or via a certified check and pay any balance directly to you. If the sale amount doesn’t cover the outstanding balance, you’ll need to settle the balance before the lender will issue a lien release.

Special Circumstances

If the lender is not local, follow the instructions your lender gives for transferring the payoff amount, such as by setting up an escrow account at your bank or with a third-party escrow service. This may delay the transfer by a few days until you receive a lien release. Do not allow the buyer to take possession of the car until you can legally transfer the title.