To sell a car that still has a loan on it, you need to follow these key steps:

1. Determine Your Car’s Value

Use online tools like Kelley Blue Book or Edmunds to estimate your car’s current market value. This helps you set a realistic sale price and understand if you have positive or negative equity in the car

2. Contact Your Lender and Get the Payoff Amount

Reach out to your lender to find out the exact payoff amount—the total sum needed to fully pay off your loan and release the lien on the vehicle. This amount can differ from your remaining loan balance and may include prepayment penalties

3. Calculate Your Equity

Subtract the payoff amount from your car’s value:

• Positive equity: Your car is worth more than you owe. You can use the buyer’s payment to pay off the loan and keep any leftover money.
• Negative equity: You owe more than the car’s worth. You’ll need to pay the difference out of pocket to clear the loan

4. Find a Buyer and Negotiate the Sale

List your car for sale, being transparent about the loan. Negotiate a fair price with the buyer, considering your payoff amount and equity situation

5. Pay Off the Loan and Transfer the Title

• If selling privately with positive equity, use the buyer’s payment to pay off the loan. Once the lender releases the title, you can transfer it to the buyer.
• If you have negative equity, pay the difference to the lender to clear the loan before transferring the title.
• If trading in at a dealership, the dealer usually handles paying off the loan and rolling any remaining balance into your new loan if applicable

Additional Tips

• Be sure to check your state’s specific requirements for title transfer and lien release.
• Prepare all necessary documents such as the loan payoff statement, bill of sale, and maintenance records.
• Consider meeting the buyer and lender at the bank or lender’s office to complete the transaction securely

By following these steps, you can successfully sell a car even if you still owe money on it. The key is to coordinate closely with your lender and ensure the loan is fully paid off before ownership is transferred