How to Sell a Truck With a Payoff
If you currently own a truck that was financed and still has a balance outstanding on the loan, you can still sell the truck. The outstanding balance on the loan will need to be paid off in full prior to you transferring title to the new owner. Payment will need to be made to the financing company by a set payoff date. The payment will include the remaining principal balance plus interest accrued up to the point of payoff.
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Instructions
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Payoff the Loan
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Review your current loan statement. Make sure the last payment you made on the loan is reflected on the statement. The statement may indicate a loan payoff amount. This payoff amount will give you an idea of the amount outstanding on the loan.
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Call the financing company. Inquire about the payoff amount. Verify the date the payoff is valid through. The financing company will compute interest through a specific payoff date. Once this payoff date passes, additional interest will begin to accrue. Request a loan history and statement of loan payoff when speaking with the financing company. When received, verify that all payments you made have been credited, late fees assessed are accurate and the payoff is what was discussed.
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Research the resale value of your truck prior to paying off the existing loan. If your truck is worth less than the payoff amount and you do not have sufficient funds from the sale of the truck and other resources, you should rethink your decision to sell the truck and payoff the loan. If your truck is worth more than the payoff amount, the sale of the truck should cover the payoff. You will also have extra money to put towards a new car or truck.
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Sell your truck to the buyer. Using the proceeds from the sale, payoff the loan balance before the payoff date discussed with the financing company passes. If your financing company is local, consider arranging for the payoff of the truck at the same time you sell it. You will need to arrange to meet the seller at the financing company and meet with a loan officer. A copy of a statement from the financing company can then be provided directly to the seller so title can transfer without the lien listed. If your financing company is not local, the lien will be listed on the title when you transfer the truck's title to the buyer. The buyer will not be responsible for the lien, since the debt originated with you. Obtain a statement from the financing company that your loan has been paid in full and the truck is owned free of any liens. Provide this document to the buyer so the Department of Motor Vehicles will release the lien on the truck's title.
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Tips & Warnings
Some financing companies impose pre-payment penalties on their loans. Review your financing documents and verify you do not have a pre-payment penalty. It is not advisable to payoff a loan if such a penalty exists.
