How to Sell a Vehicle When the Bank Has the Title

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Selling a vehicle privately can be a headache. However, doing it yourself can help you receive a higher price than a typical dealership trade-in. If you owe money on the vehicle, you can still sell it, but you'll have to take a few extra steps to pay off the loan and get the title transferred to the buyer.

Things You'll Need

  • State forms
  • Lienholder forms
  • Contact your lienholder to determine your loan balance. Since interest charges are added daily, request a payoff quote good for 30 days to allow ample time for processing. If the payoff is even a few dollars short, the lienholder will not release the title.

  • Determine the approximate value of your vehicle and set an asking price. If the vehicle is worth less than your loan balance, you'll likely have to supply the difference yourself--unless you can command a price higher than its value, which is very unlikely.

  • Find a buyer for the vehicle and agree upon a selling price. In most cases, you'll need to advertise your vehicle to garner attention. Newspaper classified ads and Internet ads are both excellent choices for attracting potential buyers.

  • Contact your nearby motor vehicle department to obtain the correct forms for an automotive private sale. Generic purchase orders are a bad idea. Each state has specific guidelines and regulations regarding the sale of a vehicle. Obtaining state-approved forms is the best option, and it's free.

  • Contact your lienholder again and let them know the vehicle is being sold. They will provide you with specific instructions (they may require additional forms, but they should be able to provide you with them) and guide you through the process of transferring the title to the new owner.

Tips & Warnings

  • Be patient when trying to sell a vehicle privately. The process can take awhile, depending on economic conditions and the popularity of the vehicle you are selling.
  • Always remove your license plate when you sell a vehicle. Escort the buyer to the motor vehicle department to obtain a temporary permit.

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