Introduction
How to sell a car with a lien? The seller's name is listed on the title certificate as a lien holder when you purchase a car with a loan. A lien is a legal title on property that is given to a creditor. It ensures an underlying obligation like the payment of a mortgage on a house or car. The creditor can seize the lien-subject asset if the agreement is not fulfilled.
The lien owner is eradicated from the title when the motor vehicle's loan is fully paid. After that, the lawful owner can sell the vehicle or complete a few documents. The owner can remove the lien owner from the title and move ownership to the buyer if they decide to sell the car before the lien owner has been paid in full. Please continue reading to learn about lien holders and how to remove them from your title.
Contact Your Lender
Before you do anything else, knowing how much you owe for your car loan is crucial. This amount could be different from the balance on the very last billing statement. Many lenders will charge a penalty for borrowers who pay their loans early. You can only find this information by calling your lender to request your payment amount. This information might be accessible online through the lender's portal.
Options for Selling a Car with a Lien
Lending through an Auto Dealer
An auto dealer seems to be the best way to sell your car if you plan on trading it in for something else. This is how it works: When you buy a new motor vehicle from the seller, they will either pay off your debt or add the charge to the debt for the new motor vehicle. Your lender will work with the dealership to transfer the ownership from the lienholder to the dealership.
You don't have to do anything. The dealer will do all the calculations and coordinate ownership transfer with your seller. This option has a downside. You'll usually get less money selling your car to a private buyer than trading it in. Make sure you have adequate car insurance if you plan to trade in your old car. Before you sell your car, it is a good idea to talk to your insurance provider about whether or not you need additional coverage.
Selling to a Private Buyer
A car with a lien is not possible to sell to a person is a different method. If you plan to lend your car to someone other than a dealer, you will need to pay off the remaining debt. Find someone willing to take over your auto loan if the lienholder permits it. The lienholder will be released from the lienholder's state transportation agency once the loan is paid off. The sale process can be made more accessible if there are no legal claims against your vehicle. Although lending your car privately can take longer, you will likely receive more money than if it is sold to a dealer or traded.
Pay Out the Lien Yourself
Dealing with a private purchaser is more advantageous than selling to a buyer. However, in this case, you will need the funds to pay the lien off before you can sell. You will need to either pay the entire loan or find a buyer willing to repay the loan. If you have other ways, it's more accessible to pay the loan off yourself. The process is quite simple in this case. Call your lienholder to arrange payment. After your payment is processed, your seller will contact the motor vehicle agency in your state to issue you a clean car title. Once you have a clean title, you could lend your car.
Conclusion
The lien will be released only when your loan is paid in full, including any interest payments. You can sell the car to a dealer to trade for a new vehicle or to a private purchaser. You can either work with the dealer to help you sell and move the title or work with your lender to repay the loan, eradicate the lien from the title, and transfer it to the new holder.
