Red car and keys in hand

How to Sell a Car With a Loan

Can you sell a car with a loan? Absolutely. You can also trade it in or transfer the loan and title to another driver. While the math may seem complicated, it’s pretty straightforward. If you sell or trade your used car for less than you owe, you have to pay the remainder to fulfill the loan requirements. But. With a little homework and legwork, you can sell your car with a loan for a price above or close to what you owe.

Some car owners want to know how to sell a financed car without paying it off, but technically that’s not how it works. Regardless of what you get for your car, the title won’t be released until you pay off the loan. The usual process for selling a car privately or to a dealership is to sell the car, pay off the loan, and get the title.

How to Sell a Car With a Loan in Four Steps

At a minimum, you’ll need to know the details of your loan and your car’s value. The more you know about how much you owe and how much you should get for your car, the better you’ll come out in the end. Here are some pointers that will make selling a car with a loan simple. Keep in mind that you won’t get the title until the loan is paid.

Get Your Loan Information
You can find much of the information you’ll need on your lender’s website if you have an account set up. You can always call or email, too. Don’t rely on your latest statement or bill because the payoff may differ from what is reported on those documents. There could be prepayment fees and other expenses, so you don’t want any surprises. Your lender can also tell you the forms and other things you need for a smooth transaction.

Find Out Your Car’s Value
Research your car’s value on sites like Kelly Blue Book or Edmunds and browse local listings to get a good idea of how much your car is worth. You may find your car value to be higher than you expected, thanks to the scarcity of new and used cars on the market.

You’ll need the year, make, and model of your car, along with your zip code and the car’s mileage. Typically, if your car is less than three years old, it should have a pretty decent resale value. But even older vehicles can bring a premium price in the right circumstances.

Know Your Equity
Learning how to sell a car with a loan is much like learning how to sell a house with a mortgage—it’s all about the equity. Equity is the difference between what you owe and what your collateral is worth—or what you can get for it! If your car is worth more, or you sell it for more than your loan balance, you have positive equity. Congratulations! If you owe more on the loan than your car can sell for, you have negative equity.

Commonly called being upside down on a loan, the math for negative equity is simple. If your car sells for $18,000 and you still owe $22,000 on a car loan, you must pay the difference of $4,000 when you sell. Knowing exactly where you stand can help motivate you to push for a better sale price.

Be Prepared for the Transaction
Equity aside, every car sale follows a common scenario. You work out a deal with the buyer and figure out the details of completing the sale and title transfer. Because the lender won’t release the title to your car until you pay off the loan, selling a car with a loan often takes place at the lender’s office.

To ensure the transaction goes off without a hitch, contact your lender and find out exactly what you and the buyer will need for the meeting. If all goes according to plan, the buyer pays you, you pay the lender, and the lender signs over the title.

Can you transfer a car loan to someone else? In addition to selling your used car outright, you can also transfer the car loan. To transfer your car loan to another driver, they must fill out a loan application with your lender. Once they are approved, the lender will assist you with transferring the loan and the car title.

Can You Trade In a Car With a Loan?

Yes, you can, and you’ll get the fairest trade-in value for your car at Car Time Supercenter, no matter your credit. We want your car buying experience to be simple and stress-free. We’ll help you find the right car for your budget and help you handle the transaction with your lender.

Since 1984, our family-owned business has helped Tucson drivers afford reliable used cars they love. With competitive financing and guaranteed fair prices, you’ll find it easy to get behind the wheel of your next car. Stop by for a test drive or give us a call to see how we can help.

Shane Vossough

There are good reasons people will buy their next used car in Tucson from Car Time Supercenter. But I think we are one of the most trusted used car dealerships mainly because we treat everyone like family. My family has provided quality, dependable local used cars to Tucson customers since 1984, and I'm proud to be a part of our continued success. Like many family-owned businesses, I grew up going to work with my dad. Falling in love with cars was natural because of my father's passion, and eventually, I came to love the car business just like him. I officially joined the Car Time Supercenter team in 2012, starting in the finance department. Over the past decade, I've learned the used car business and how to treat customers from my family and industry resources. Today, I oversee marketing, social media, inventory, and reconditioning, so I play an essential role in delivering local Tucson used car buyers the best experience possible. I also help our family business keep up with the times while providing old-fashioned customer service. From attending NADA classes to becoming Allstate certified for back-end products, I continue to learn and add skills to serve our customers better.