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Can I sell my car to pay off the loan?
Can I sell my financed vehicle? I want to clear my car loan so I can put money aside to pay off other debt.
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Juggling payments for several different debts can be tricky! Fortunately, if you want to sell your car to pay off the loan in full, it is possible.
To sell your vehicle to a private buyer, follow this step-by-step guide.
Step 1: Contact your lender and ask for the payoff amount for your loan. Paying off the loan is the only way you can transfer ownership to the new buyer since the lender technically owns the vehicle if you have an outstanding loan balance.
Step 2: Research the value of your vehicle. You can use resources like
Kelley Blue Book
or Edmunds to do so.Step 3: Evaluate your equity. To calculate this, subtract the payoff amount from the estimated current value of your car.
If this number is positive, you can sell the car, pay off the loan balance, and keep the remaining amount.
If this number is negative, you will need to collect the money from the buyer, pass it along to your lender, and pay the remaining balance of your loan out of pocket to clear the debt.
- Step 4: Transfer thetitleto the buyer once you’ve paid off the loan in full. Finally, all that’s left to do is provide them a bill of sale.
If you’d rather keep your vehicle and find another way to save money on car expenses, check out the
Jerry
app. Jerry can collect competitive quotes from 50+ top car insurance companies, like Travelers, Nationwide, and Progressive, in seconds. They even help cancel your old policy once you’ve made your pick. And 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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