How Do I Sell A Car That Has A Lien On It?

The best scenario if you want to sell a car would be to have full ownership of it, but you should know that you still can sell it although it has a lien against it. How do I sell a car that has a lien on it you ask? This article will tell you what you should do.

First, for those of you that don’t know, a vehicle lien is in place when the person that finances the car does not have the title as it is being held by the lending institution. Taking into consideration the fact that these car loans can last for years and years, some of us may want to sell the vehicle and get a brand new one before the loan term ends.

The very first thing you must do if you have made up your mind would be to get in touch with your car lender and ask about the buyout amount of your loan. If you have the necessary funds to make the full payment, you will no longer have any obligations to the lender, which means that you can sell the car without any legal ramifications involved. Before receiving the title of the car, you must request a copy of the lien release from your lender which you will later on show to the potential clients in order to assure them that you own the car.

It is recommended to use escrow for selling a vehicle with a lien. If history thought us something, most of the sellers do not have the entire amount of money to pay off the loan in full. By escrow, you will be able to close out the car loan and transfer the vehicle to its new rightful owner. You can complete this escrow transaction through a secure online payment site. Of course, you will have to pay some fees in order to use these services and you will also have to agree with the buyer of the car as far as the terms of the transaction are concerned. If all things go according to the plan, the ownership of the vehicle will be transferred to the buyer and after that he/she will be fully responsible for paying off the lien.

At the time of the sale, you will have to sign over the title of the car. We recommend that you talk to your lender once again and ask him if you have the possibility to transfer the vehicle’s title to the client by using the funds you got from the transaction. Your lender will most likely set up a meeting where you and the buyer will come and sort things out.

Lastly, make a visit to your local DMV. If the person that bought the car is not from the same state, you can take the bill of sale and show it to the DMV and provide the buyer with a temporary operating permit which will be valid until you get the title of the car from the bank.

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