How to Sell a Motorcycle With a Loan

When you finance the purchase of a motorcycle, the lender places a lien on the title. In order to sell the motorcycle, you have to payoff the lien so that the new owner can take control of the vehicle without any third parties having claims on it. You can sell a motorcycle as a private owner by placing advertisements online or in local news papers. As with any property sale, you must negotiate with potential buyers until you reach a mutually agreeable price.


Step 1

Contact the finance company that has a lien on your vehicle and ask for a 30 day payoff with a per diem. The 30-day payoff quote tells you exactly how much you have to pay the lender in order to pay off the lien today. The per diem, tells you how much you need to add on a daily basis to the payoff quote in order to account for interest accrual.


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Step 2

Navigate to the Kelley Blue Book website and click on the tab that says "motorcyles." Enter your zip code on the following screen and on the next page select "Motorcycle Retail Values." Enter the year, make and model of your motorcycle on the following screens to find out the market value of the vehicle.


Step 3

Set a price for your vehicle that exceeds the amount you need to payoff the loan but that does not far exceed the market value. If your loan amount exceeds the motorcyle's value, set the price close to market value and use your own funds to pay down the excess balance of the loan. Advertise the motorcycle locally and in online classified advertisements.


Step 4

Agree on a sale price with a buyer and arrange a closing date for the sale transaction. If you have enough money to payoff the lien prior to selling the motorcycle, then pay it off. Ask the lender to sign the release of lien on the title or provide you with a release of lien document, if allowed in your state. If you cannot pay it off ahead of time, close the loan at the office of your lender and hand the sale proceeds to your lender during closing so your lender can release the lien.



Step 5

Sign and date the owner section of the title and fill in the necessary information in the odometer and title transfer fields. Obtain a receipt for the payoff from your lender and hand the title and the keys for the motorcycle to the buyer.


Some banks enable you to create escrow accounts where the buyer can deposit the funds for the motorcycle purchase. The bank acts as custodian of the account so you cannot gain access to the money until the lien holder has released the lien and the title paperwork has been completed.

In some states, such as Virginia, you can sell a motorcycle without paying off the lien, but only if your lender allows the buyer to assume your loan. The buyer must meet the lender's eligibility guidelines. The buyer takes possession of the vehicle and assumes the responsibility to payoff the debt.


When you receive your loan statement from your lender, it shows you the current principal balance on your debt. However, some motorcycle loans include pre-payment penalties that involve paying off the entire amount of interest that should accrue over the life of the loan. Therefore, do not price your vehicle on the basis of the principal owed. Instead, ask your lender for an accurate payoff quote that includes any applicable penalties.



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