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Can I sell a car with a loan?
I really need extra cash to pay my mortgage. I’m thinking of selling my car because it’s currently my biggest asset. But, the only issue is that I haven’t paid off my car loan yet. Can I sell a car I owe money on?
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, it is possible to sell your vehicle with an existing loan! It will require a few extra steps, but read on for the step-by-step guide to selling a car with a loan.
Step 1: Contact your lender and ask for the payoff amount for your loan. Paying off the loan is the only way to sell the car since the lender is technically the owner of the vehicle until you do so.
Step 2: Figure out the market value of your vehicle. You can use resources like
Kelley Blue Book
or Edmunds.Step 3: Determine your equity. To calculate this, subtract the payoff amount from the estimated value of your car.
If this number is negative, it means you owe more than the car is worth and your loan is
upside-down
. You will need to give the lender all of the money from the car’s sale, and you will pay the remaining balance out of pocket.If this number is positive, you will sell the car, pay off the loan balance, and bank the remaining amount as a nice little profit!
Step 4: Transfer the
title
to the buyer, and provide them with a bill of sale to complete the transaction.If you are interested in purchasing a vehicle again someday, check out how you can save money on car insurance with Jerry.
The
Jerry
app can collect quotes from 50+ top insurance companies, like Travelers, Nationwide, and Progressive, in seconds! They even help cancel your old policy once you’ve made your pick. The average Jerry user saves $879 a year on car insurance.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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