I Want to Sell My Car But I Still Owe Money

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CARS.COM — Caught in between the rock of owning a vehicle and the hard place of wanting to sell it to a buyer even though you still owe money and haven’t paid it off yet? You’re not the first. It is possible to sell a car even if you still owe money on the loan. This merely adds a step to the sales transaction: closing the loan with your lender.

Related: How to Transfer Ownership When You Sell Your Car

If you’re wondering where to start with selling your vehicle and getting your payments squared away, here’s what to do.

  • Call your lending institution to determine the best way to close out the car loan. At the same time, ask about obtaining a lien release, which states that there are no outstanding loan obligations on your car.
  • If you owe more on your loan than you can readily pay prior to a sale, it’s possible to close the loan and transfer ownership at the same time.
  • If neither of these options is satisfactory, conduct the sale at the lien-holding institution. The seller can pay off the loan balance with the sale proceeds and immediately sign over the title to the new owner. Call the lending institution beforehand to facilitate this transaction. If the lien holder is out of state, obtain a temporary operating permit from your state’s Department of Motor Vehicles. Once the loan is paid off, you can then send the signed title to the new owner. While this option may involve more faith by the buyer, remind them that it’s also in your best interest to transfer the title as soon as possible to eliminate personal liability.
  • Leased cars represent a different situation. If you want to transfer your current lease to a new owner, we recommend using a lease-transfer service.’s Editorial department is your source for automotive news and reviews. In line with’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of’s advertising, sales and sponsored content departments.

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