Selling Not Paid Off Car

Let's imagine for a moment that you have recently come into a bit of financial difficulty and you require a bit of cash. On the less dramatic side, you might have ben offered a new job in a different state and no longer require the use of your car. These are two situations when a sale can be very useful. However, you could soon face what seems to be a major sticking point. What happens if you have not yet fully paid off the vehicle and it is still being financed? Let's look at some of the problems you may encounter and more importantly, how to deal with this process quickly and efficiently.

The Main Issues with Selling a Financed Vehicle

The primary problem will normally center around the buyer. Many buyers are not comfortable with the idea of you using the money that they pay towards the purchase to be used towards settling with the finances still owed to the bank. So, they could balk at the entire process before it truly begins.

The second issue is the fact that in some situations, you may be RELYING upon the cash of the buyer to pay off the existing loan on the car. Depending upon the type of loan, this could be tricky to overcome. Now that we have examined two seemingly tricky situations, let's examine their surprisingly easy solutions.

What is the Payoff?

First and foremost, determine the amount that you owe no the vehicle; never rely upon memory alone. Simply call up the bank or credit union and ask. Also, it is wise to know whether or not they have any special procedures for those who are looking to sell a financed vehicle to a third party.

Address Standard Sales Concerns

One mistake is that many who are overly concerned about financing issues during a sale will overlook basic preparatory options such as cleaning the car, having all paperwork close by and listing the vehicle within multiple platforms. Do not neglect these actions, for they are the cornerstones of any eventual sale.

Explain the Situation to the Buyer

Make sure that the buyer is aware of how the sale is going to take place. Be honest and explain why you wish to sell a financed car. There can still be times when they are hesitant to become involved. It could therefore be a good idea to schedule an appointment at your bank and take them along so they are aware of the exact process. This is likely to put them at ease.

Two Checks?

Another great way to bridge this financial “gap” is to ask the buyer to write you two different checks. One will be to the bank in the amount that is required to pay off the loan. The second will be directly to you for the remainder of the amount that has been agreed upon. This can place them more at ease when compared to writing a single check in bulk.

Exchanging the Title

Assuming that all has gone well up until this point, the final step is to exchange your title. Many banks are more than happy to provide you with two different options:

  • You can take the title in the event that the financing has been paid. This title is then transferred to the new owner.
  • If the buyer instead chooses to take care of the financing, your bank will send the title to their financial institution.

Either of these cases are very clear and the bank representative is normally happy to explain them to you and to the buyer in greater detail when required.

One Step at a Time

So, we can now see that selling a financed vehicle is a bit tricky, but by no means impossible. The main takeaway point is to be sure that the buyer is completely comfortable from the very start. After all, they are putting up a substantial amount of their own funds. Take some time to make sure that you are familiar with all of these steps, as such confidence is likely to have a positive influence upon the prospective buyer. In turn, both parties are able to walk away satisfied with the end result!