How to Sell a Car With a Lien on It

If you are in the market for a different vehicle or want to get rid of the car you are currently driving, you’re in great company. Millions of Americans share the same desire. Typically, it is easy to sell a vehicle, unless you owe money on the car. With an active lien in play, there are some steps you’ll need to take first before you can relinquish your car to a new owner.

bank building
A visit to your bank or credit union can resolve a car lien.

Removing a Lien

Check out our four-step method for removing a lien. Naturally, not every step applies, but each one offers guidance on how to get the job done.

Step No. 1 — Contact Your Lender

You need to find out what the loan payoff amount is for your vehicle. Therefore, the first thing to do is to reach out to your lender to request that information. Specifically, ask the bank representative to find out what it takes to satisfy the loan. After that, you may be able to visit a local bank branch, make your final payment, and await a new title, a process that can take weeks to complete.

Step No. 2 — Determine Your Car’s Worth

If you were to sell your car today, would you know what it is worth? That information is readily available online through sites such as Kelley Blue Book and Visit either site to get the current value of your car and use that amount as the basis for your sale price. If your sale price is $6,700 and your loan pay-off amount is $2,500, then you will net $4,200.

Step No. 3 — Advertise Your Car, Mention Conditions

You can still attempt to sell your car with a lien on it, provided that the buyer knows that you need to pay it off. You may not have the funds available to pay off the loan and secure the title, desiring to use the funds derived from the sale of the vehicle to pay off your debt. A buyer can either choose to wait for the paperwork to clear or take possession of your vehicle now with the title arriving later. This step, though, is fraught with challenges. The buyer may demand a sworn and notarized statement from you guaranteeing that the state will send you the title once the lien is satisfied. Your banker may be available to notarize that statement.

Step No. 4 — Transfer the Loan

You may be able to hasten the transfer of your car to a new buyer by signing over the loan to this person. With this arrangement, the buyer assumes your loan payments and pays you the difference for what the car is worth. You’ll need to involve the lender in this step to assure that the note can be transferred. The new owner can either make monthly payments or pay off the loan immediately to obtain the title. Provided all parties sign off on this (i.e., buyer, lender, and seller), this is a viable alternative for some.

Lien Considerations

Be honest with the buyer if your car has a lien that still needs to be resolved. If he or she wants the car badly enough, then they’ll work with you. If not, then pay down your loan and take the title before attempting to sell it. With this last option, you’ll avoid the hassles and worries that come with a lien that remains outstanding.

Photo Attribution

Image by pasja1000 from Pixabay

Image by Qubes Pictures from Pixabay

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Johnny Orion
Author: Johnny Orion
Johnny Orion is a weekend mechanic and a Cars & Coffee hound who dabbles in writing, mostly about cars. His goal is to retrace the famous Route 66 highway in a restored 1972 Pontiac Firebird hardtop with a four-barrel carburetor and a 3-speed manual gearbox. But first, he must convince his friend to sell...

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