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How to Sell a Car with a Loan

Learn how to sell a car with a loan when the bank holds the title, since many car owners sell their vehicles privately, whether to dealers or other drivers.

Likewise, many car owners have their cars financed through banks or credit unions. That begs the question: If you don’t hold the title, how can you sell a car?

Tips to Sell a Car with a Loan

Check out these tips for those looking to sell a vehicle when the bank holds the title and you still owe money on car loan. These will help you ease your mind during the sales process.

Determine the Payoff

The first step to selling a car with a loan is to find out what you still owe on the note. You can do that by calling the bank that holds the loan and simply asking what your payoff amount would be.

While you’re on the phone, be sure to ask if they have any important procedures for a vehicle owner who’s selling his financed car to a third party.

Use the Buyer’s Money

Here’s the tricky part: Once you’ve determined the payoff amount and you’ve sold the car, you’ll have to use the buyer’s money to pay off the note. Of course, you can use your own money, as well. For many sellers, however, paying off the car won’t be possible without the buyer’s money.

The result is that some buyers won’t be comfortable with this type of transaction. To ease a potential buyer’s worry, ask the buyer to meet you at the bank where your car is financed and ask an employee explain the situation. If the buyer remains uneasy, you may have to use your own cash to pay off the loan — or look for a different buyer.

The good news is that many banks will accept payment directly from the buyer. We suggest asking the buyer write two checks: one to your bank for the payoff amount and one to you for the remainder of your deal amount.

Transfer the Title

Once the buyer pays for the car and you pay off the loan, the title is free and clear.

Most banks give you two options: You can take the title, or you can let the bank know where to send the title. If the buyer takes a loan out on the car, your financial institution will need to send the title to the buyer’s bank. Otherwise, the title can go directly to the buyer.

Tricky, But Not Impossible

Those looking to sell a car while the bank holds the title will have to do a little more legwork, but it’s not impossible. Just be sure to go out of your way to ease the buyer’s concerns.

After all, the buyer is spending a large amount of money — and he or she is acting on your word that you’ll send along the title.

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Editor’s Note: This article has been updated for accuracy since it was originally published.

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  1. Anyone here know how to reach WFS Financial, I need to get my lien release, they are impossible to reach.  Paid this car off in 2015, trying to sell my Toyota Carolla CE

    • They appear to not be responding even to Better Business Bureau complaints, so I would take this to the Attorney General’s office in your state.  Hopefully they will help you.

  2. Hello, I have a Dodge dart 2016 color white.i got that car last Jan 2018 dealership refinance my monthly payment is $298 for 62 months.i got behind for two months last year Jun and July 2018. They repo my car.i struggle to get my car bank giving me a hard time to get my car back.worried also for paying the storage fee in the short 3weeks  before I got my car back.. almost $2000 I pay for everything. I pay the bank $1200+ the repo storage $600.. the rest for riding a bus or ubber.then in tow yard inside my car my staff is everywhere.i didn’t say nothing all I want is to go out the yard and drive my car..when I get home I open my hood they change my car battery.. some fuses missing. .and my staff.. after I got my car for repo.i haven’t pay the bank again.until today.i got my car like August.registration is January. I can’t register I owe the bank.what should I do with my car..pleased advised me..thank u 

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Doug Demuro
Doug DeMuro writes articles and makes videos, mainly about cars. Doug was born in Denver, Colorado, and received an economics degree from Emory University in Atlanta. After graduation, Doug spent three years working for Porsche Cars North America. Eventually, he quit his job to become a writer, largely because it meant that he no longer had to wear pants. Doug’s work has been featured in a... Read More

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