Can You Sell Your Car While Having a Title Loan?
Many people believe they cannot sell a car with an active title loan. However, it is possible, although the process can be more complicated than selling a vehicle with a clear title. Selling a fully paid-off car is typically easier than selling a car with an active loan.
However, it can still be done with the right approach, such as understanding your loan payoff amount and being transparent with potential buyers about the loan status. Keep reading to learn how you can successfully sell your car while having a title loan.
Who Actually Owns the Car During a Title Loan?
With a title loan, the lender places a lien on your vehicle title, which means the title cannot be transferred to a new owner until the loan balance is fully satisfied.
If you default on the loan, the lender can repossess your vehicle, so it’s worth understanding exactly what your agreement says before signing. You remain under loan restrictions until the balance is fully paid. So even though the car is sitting in your driveway, you generally cannot transfer ownership of the vehicle until the lien is released by the lender.
5 Possible Ways to Sell Your Car With a Title Loan
If you are unsure how to sell a car with an active title loan, there is no need to worry. The following strategies and practical solutions can help you determine the best option for your financial situation.
Trade the Car at a Dealership
A dealership may directly pay your remaining loan balance to the lender. Then they subtract the loan from your car’s value and give you the difference, or apply it towards another car. This process can help you sell your car more quickly.
Pay Off the Loan Before Selling
The easiest way to sell your car is to pay off the loan first, which gives you full ownership of the car and allows you to sell it
Split Transaction
If the buyer is interested in buying your car with a vehicle title loan, you can split the transaction with them. The buyer may pay part of your loan directly to the lender, and you can cover the remaining balance. This arrangement can help simplify the transaction for both parties.
Coordinate Directly With the Lender
Coordinating directly with the lender during the transaction can provide additional security during the selling process. The buyer makes payments to the lender, who clears the loan. This process will remove the lien from the vehicle.
Pay the Remaining Balance if Needed
If your loan is higher than your car’s value, you will need to clear the difference on your own. This way, you can settle the outstanding balance, and the lender will release the lien. This allows you to complete the sale legally without delays.
Key Takeaway Before You Sell
You can sell your car even if it has a title loan on it; however, you must either involve the lender or pay off the loan entirely. Ownership of the vehicle cannot be transferred until the lien is settled.
If you need further guidance on what steps to take next, Advantage Finance LLC can help you with this matter. You can contact us at (281) 410-5337 to speak with our representative, who can help you sell your car.