Final Thought. Depending on the lender and the situation, it is possible to transfer an auto loan to another person, provided a new borrower is willing to work with your lender and has a great credit score. But the process can be complex.
Because good payment history is the most important part of building good credit, damaging your payment history in this way will hurt your credit a lot. A car loan transfer also means you won't have monthly payments to make in the future, thus making it harder to rebuild your credit with consistent payments.
Yes! You do have the option to title and/or register your vehicle in someone else's name. In order to do this, the new owner must sign a Security Agreement form, acknowledging that the credit union has a lien against their property.
If you have a loan on your car, you will most likely need to pay it off in full before transferring the title to a new owner.
Does selling a financed car hurt your credit? Selling a financed car to a private buyer or dealership likely won't hurt your credit. However, if you have negative equity, you might need to refinance your auto loan or take out a personal loan to cover the difference between your car's value and what's left on your loan.
If you have the cash ready to pay off the loan and then sell your car, you can do that. Otherwise ask the buyer to provide the money to the lender and have the title mailed directly to them. If you have a close relationship with the buyer (like a neighbor or friend) this will work.
Most personal loans cannot be transferred to someone else. There are rare exceptions to this rule, such as mortgages and car loans, but even then, it is easier to qualify for a new mortgage or car loan to pay off the existing loan. If considering a personal loan, make sure you can repay the loan in full.
The vehicle owner, as shown on the vehicle title, can register a vehicle. In the case of a leased car, a dealership can own the car's title and then register it in the name of the person paying the lease. Often a state requires proof of ownership — or a contract with the owner — to register a vehicle.
If you're making payments, either on a loan or a lease, the first thing you should do is check your loan documents to make sure there is no prohibition against moving the vehicle to another state. Most loan contracts do not include such a prohibition.
Does voluntary repossession hurt your credit? Voluntary surrender counts as a derogatory or negative mark and will stay on your credit reports for up to seven years. This stain on your credit reports might prevent you from being approved for new credit and your terms, like interest rates, will likely be higher.
You're unable to transfer the title to the buyer until the loan is paid off. In a private transaction, you might want to complete the sale at the location of the current lienholder (such as the bank or credit union where you got your car loan).
Unfortunately, once you sign an auto loan agreement, you can't add someone to that loan without refinancing. If you think you might want someone else to be on your loan, plan carefully, and put them on the contract right away. Otherwise, you'll have to refinance to add their name to your car loan.
Inform Your Lender
Notify your lender about the ownership change and provide the new title. If there's a mortgage on the vehicle, you'll get a release from the lienholder after the payoff. You must be careful, though, as this does not apply to vehicles that the dealership is financing.
The new owner will complete the new loan paperwork and transfer ownership at the DMV. Some lenders have assumable loans, which allow you to transfer your loan to another person. If your lender doesn't have loan assumption written into your loan paperwork, you won't be able to transfer your loan to another person.
The simplest way to get an auto loan into someone else's name is to sell the vehicle to them. But be aware that selling a car when you still have a loan has its drawbacks. Unless the interested buyer has cash for the purchase, they'll need a new loan to pay off what you owe.
Regardless of how close your relationship is, if you do take out a loan for someone else, the only person legally responsible for repaying that money is you. As far as your agreement with your lender goes, you're taking the money out in your name for you, so you – and only you – are legally responsible for repaying it.
You'll need to pay the loan in full before the lender will release the lien and title—allowing you to resell the vehicle to another party. If you're planning to sell a vehicle that you still owe money on, talk to your lender first to find out how to proceed.
Note: If you're selling a car with an active loan, you're still the one responsible for paying it off, so the remaining balance on the loan will likely be subtracted from the price the dealer offers you. So if you owe more than what the dealer offers, you'll need to pay the difference to the lienholder.
CarMax buys vehicles that are not paid off. To sell a car you still owe money on to the retailer, you must provide loan information so CarMax can pay off the lender. If you owe more than your offer, you will need to cover the difference.
In this case, there are two ways to sell a car with a loan, Gordon says. One method is to have the buyer give you two checks: one to pay off the loan balance to the lender and one for the remaining equity in the car. Alternatively, the buyer could give the lender a check for the full value of the car.
Trading in a car generally helps you reduce how much you'll need to borrow when buying another vehicle, but if you have a balance on your current auto loan, you may be encouraged to roll your existing balance into a new loan, which will increase your total loan costs and the interest you'll pay over the life of your ...
Your car's registration: This shows that you've registered your vehicle with the state. Loan payoff information (if you still owe money on the car): You'll need to provide this so Carvana can pay off the loan when you sell the vehicle.