If the price is more than the pay-off amount, the buyer will make two payments, one to the lending institution that pays off your loan, and one to you for the difference they still owe you.
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).
Reposession and/or late/missed loan payments affect your credit score and credit history. Selling a vehicle and paying off the existing loan, to anyone, doesn't harm credit scores or credit history.
Classically you either have to pay off the loan, which is not your option or surrender the car back as a voluntary repo. The last option is to try to find someone to sell the car to for the loan balance which is usually higher than the car's worth. Good luck. Just focus on the future not the past.
Losing your car can hurt your credit quite a bit unfortunately. Having your car repossessed or surrendering it voluntarily is seen as a major negative event by lenders. They'll view you as high-risk. Expect your credit score to take a big hit, maybe over 100 points or more.
You will need the title before selling the vehicle to a junkyard. Once you have your title, make sure you can sell the vehicle. If it has a lien placed on it, you'll need to pay off the loan before you can sell your car.
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.
Most loan contracts typically don't allow for transfers, and mainstream lenders generally refuse such a request.
Yes. The tickets you have are made out to you, not your car. The car is not expected to pay the fines, you are.
When your car is financed with a loan, the lender will typically keep the title until the loan is paid off. Only at that point do you become the legal owner of the vehicle. Because your lender technically owns the car until the loan is paid, you usually don't get the title until the loan has cleared.
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.
If you default on your auto loan, your lender will likely repossess the vehicle unless you surrender it voluntarily. A repossession can compound the damage done to your credit by your late payments and make it difficult to get approved for another auto loan for a while—or other types of financing like a home loan.
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.
Selling 100% Online
Companies like CarMax, Carvana, Edmunds, Kelley Blue Book, and CarGurus now provide the option for individuals to sell vehicles 100% online. In terms of private sales, this is arguably the fastest and easiest way to do so—and you can still get a great deal for your car, too.
Once you're in default, the lender may be able to repossess your car anytime, without notice, and come onto your property to take it. If your car is repossessed, your lender will try to sell it at an auction or in a private sale to recover their money. If they sell it at an auction, you may be able to buy it back.
Can you sell a car with a loan? You can sell a car with a loan but you'll need to give the full payoff amount to your lender before they'll release the car title. You can do this with your funds after you complete the sale, or you can refinance your car loan or apply for a personal loan.
The lender, or lienholder, will keep the car's title until it's paid off. In that case, you'd contact the lender about your options. You might need to pay off the loan before selling the car, although the lender might allow a buyer to take over your loan balance.
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.
If your car is worth more than you owe, the buyer will pay the total amount to the lender and the lender will then pay the difference to you. Or, the buyer will pay your remaining loan balance to the lender and make a separate payment to you.
One way to get out of a car loan is to sell the vehicle privately. If you're not upside down on the loan, meaning the car is more valuable than what you currently owe on it, you can use the proceeds of the sale to pay off the current loan in full. Another term for an upside-down car loan is negative equity.
In the U.S., it is illegal to sell a vehicle without informing the new owner there is a lien. This information must be disclosed prior to finalizing the sale. However, the seller will not go to jail.
Unfortunately, if you still have outstanding finance on the car when you scrap it then the company that lent you money will reclaim their money back. Scrapping a vehicle that still has finance means you're scrapping someone else's car. If this happens, you will have to pay a fee and might be prosecuted.